Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that a recent survey of independent advisors by Charles Schwab finds that firms are targeting growth in Assets Under Management (AUM) in the coming years and are frequently looking to technology (including artificial intelligence) to help them scale efficiently (though some might be overlooking the potential value of investments in additional support staff). Amidst this backdrop, advisors surveyed struck an optimistic tone when it comes to future profitability, with more than 60% expecting annual profit growth of more than 11% in the coming three years (with the primary uses of these profits being increasing compensation to owners and staff).
Also in industry news this week:
- The Investment Adviser Association is pushing legislators to expand the accredited investor definition to include investors who work with a fiduciary financial advisor, which could allow a broader range of clients to access private investments (and perhaps expand business opportunities for advisors interested in this area)
- The IRS released final rules this week regarding “SECURE Act 2.0” provisions that will require ‘catch-up’ contributions for higher-income individuals in workplace retirement plans to be made as Roth, rather than as pre-tax contributions, starting in 2027
From there, we have several articles on investment planning:
- An analysis finds that ‘hot’ mutual funds and ETFs that experience strong performance and related heavy inflows tend to subsequently underperform their benchmark (with particularly poor performances for many these funds in recent years)
- How financial advisors can support clients who might be nervous that the strong market performance of the past few years could be followed by an extended downturn
- How advisors can incorporate capital markets assumptions into the planning process and why client circumstances and preferences can change how they are used
We also have a number of articles on retirement planning:
- Why financial advisors can play a valuable role in helping clients understand the financial (and lifestyle) ramifications of moving to a continuing care retirement community and in analyzing the different up-front and ongoing costs of different contract types
- How advisors can frame long-term care conversations in a way that avoids putting clients on the defensive, encourages them to think through the many available options, and ultimately follow through on planning decisions that are made
- Key considerations for where and how clients might invest assets in their long-term care “bucket”
We wrap up with three final articles, all about leadership:
- Why effective leaders often encourage “spacious thinking” among their team members (as opposed to solely focusing on day-to-day tasks and results)
- Four tools financial advisors can use to practice “sturdy leadership” with their clients to help them have the best possible planning experience
- Six skills and behaviors leaders demonstrate to drive employee engagement, from setting “Big, Hairy, Audacious Goals” to proactively seeking opportunities to help develop team members’ skillsets
Enjoy the ‘light’ reading!
