Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that a report from Cerulli Associates found that, amidst an industry-wide trend towards comprehensive financial planning and away from pure transaction-based investment management, asset-based fees currently represent 72.4% of advisor compensation, while commission-based revenues have declined to 23% of an average advisor’s revenue. Which reflects similar results from recently released Kitces Research on Advisor Productivity, which found that asset-based fees are used by 92% of surveyed advisory teams (and are the primary revenue source for 86% of respondents), with 42% using hourly or project fees, 37% offering retainer or subscription fees, and 34% receiving commissions (with some firms offering more than one fee model to attract different client segments).
Also in industry news this week:
- While inter-channel advisor moves often make headlines, a recent study from Diamond Consultants found that most advisor transitions occur between firms in the same channel
- The number of disciplinary cases and restitution orders from FINRA increased in 2024 (the total amount of fines declined) as the self-regulatory organization focused on violations in areas including trade reporting, options trading, and Regulation Best Interest
From there, we have several articles on investment planning:
- A review of historical market crashes shows that the ‘pain’ for investors is felt not only in the depth of each drawdown, but also in their duration
- While investors might view investment success as the product of active decisions they make, it is often the mistakes they avoid that lead to meeting their long-term goals
- Why making political bets with investments can be a risky, and challenging, proposition
We also have a number of articles on client communication:
- How applying the “ABC model of stress” can better allow advisors to support clients facing stressful situations and also demonstrate their value to prospects
- While the constant barrage of news headlines can give clients plenty of reasons to panic, advisors can add value for their clients not only by serving as a steadying voice, but also by being opportunistic when downturns do occur
- The key differences between client stress and anxiety and the communication approaches advisors can use to best respond to each
We wrap up with three final articles, all about leadership:
- How a “Constant Gentle Pressure” approach can lead to more consistent levels of client service and better relationships between managers and employees
- While operating remotely allows firms to access a broader pool of managers (and staff), doing so effectively can require more proactive methods of employee engagement on the part of leaders
- How leaders can get better at delegating, from regularly searching for tasks that they don’t necessarily have to complete themselves to identifying next-generation leaders whose development could be accelerated by taking on new responsibilities
Enjoy the ‘light’ reading!
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