More on Related Themes
2015-07-28 00:00:00 Are Managed-Payout Funds Better than Annuities? by Joe Tomlinson (Article)
Managed-payout funds promise to meet retirees’ need for sustainable lifetime income without relying on annuities. To see whether this promise can be fulfilled, I’ll answer three questions: What’s the best design for such funds? How do they compare to annuities? Can retirees do even better by combining managed-payout funds and annuities?
2015-07-21 00:00:00 Intergenerational Wealth Transfer – How to Preserve Your Family’s Hard Work by Cary Williams (Article)
Money, religion and politics – the trifecta of inappropriate discussion topics that destroy dinner party conversations. But what about family issues? When client families discuss what they want to achieve with their wealth, equally unsettling themes may arise.
2015-07-17 00:00:00 ProVise Bullets by Team of ProVise Management Group
In just a few short days, the comment period will close on a controversial proposal proffered by the Department of Labor (DOL) which would require virtually all financial advisors to adhere to a fiduciary standard of care when giving clients or prospective clients advice on their retirement plans, including IRAs. Ironically, most Americans believe that the advice that their financial advisor provides is already held to this high standard.
2015-07-14 00:00:00 Fees vs. Commissions: Why An Old Debate Is New Again by Bob Veres (Article)
Robo-advisors are forcing us to revisit the ancient fees versus commissions debate. New data and new circumstances have changed the debate in powerful ways.
2015-07-08 00:00:00 APViewpoint Presents: Generating Tax Alpha with Effective Asset Location by Doug Short (Article)
A live, CFP/IMCA CE-eligible webinar presented by Michael Kitces on Wednesday, July 8, at 4:15 pm ET. While asset allocation and diversification are standard practices among advisors, the question of how to identify and optimize asset class locations to address each client’s time horizons, and the expected return and tax efficiency of the underlying investments, is far more challenging.
2015-07-07 00:00:00 Numbers Needed for the Prime U.S. Workforce to Recover by Doug Short (Article)
At last year's Jackson Hole Symposium, Fed Chair Janet Yellen delivered an extended analysis of "Labor Market Dynamics and Monetary Policy". Her speech essentially reviewed the ongoing debate over the mix of cyclical versus structural factors in employment since the Great Recession.
Here is an updated series of charts illustrating some structural changes in the workforce that are far more significant than the cyclical impact of the Great Recession.
2015-07-01 00:00:00 ProVise Bullets by Team of ProVise Management Group
Okay, so where did the last six months go? Hard to believe that half of 2015 is gone and even harder to believe that we have a presidential election coming up in “only” 16 months. Of course, with all the candidates coming out, especially on the Republican side, it is going to be an interesting 10-12 months while the primaries play out.
2015-06-23 00:00:00 Richard Thaler’s “Misbehaving” and Implications for Investors and Advisors by Joe Tomlinson (Article)
Richard Thaler is out with a new book, Misbehaving, tracing his career in behavioral economics. It offers an appealing combination of entertaining writing and serious discussion of the many areas he has researched. The book is a natural complement to Daniel Kahneman’s classic, Thinking, Fast and Slow. I’ll briefly compare these two books and then address what Thaler’s work says about two issues particularly important to financial advisors.
2015-06-22 00:00:00 Why It’s Time to Stop Reading About Robo Advisors by Patty Quinn McAuley of Clark Capital Management Group
Rather than just reading about the robos from third party sources, it’s important to do some first-hand research for yourself to truly understand the value proposition of online automated financial advice platforms.
2015-06-10 00:00:00 5 Investing Myths by Lance Roberts of Streettalk Live
One of the biggest myths perpetrated by Wall Street on investors is showing individuals the following chart and telling them over the “long-term” the stock market has generated a 10% annualized total return. The statement is not entirely false.
2015-06-09 00:00:00 The Importance of Knowing Your Ideal Client by Teresa Riccobuono (Article)
When I start working with a client, one of the first things they want me to do is help them develop a personalized marketing plan. To set the foundation for that plan, we first must determine their ideal client.
2015-06-08 00:00:00 Why Stocks are Not "Cheap Relative to Bonds" by John Hussman of Hussman Funds
One of the constant refrains we hear at present is that while stocks may be richly valued on an absolute basis, they are “cheap relative to bonds.” At least one professor recently told students that valuations are meaningless because the P/E on cash is 100. Technically, with T-bill yields at just 0.01%, the P/E on cash is more like 10,000, but let’s not quibble. Using simple P/E ratios or inverted interest rates as a standard of value only makes sense if you have no appreciation for how securities are valued.
2015-05-31 00:00:00 When Paper Wealth Vanishes by John Hussman of Hussman Funds
As in equal or lesser speculative bubbles across history, there’s a common delusion that elevated stock prices represent wealth to their holders. That is a fallacy, and we can hardly believe that given the collapses that followed the 2000 and 2007 extremes, investors (and even Fed policymakers) would again fall for that fallacy so readily. The actual wealth is in the cash flows that are ultimately delivered into the hands of shareholders over time.
2015-05-29 00:00:00 Capital Sigma: The Sum of the Various Sources of Advisor-Created Value by Jianan Du, Yinsi Qi, Brandon Thomas, Janis Zvingelis of Envestnet
An ongoing debate among investment advisors and their clients centers on value: creating it, preserving it, and perpetuating it. Each faces a different challenge: Advisors are tasked with delivering worth to their clients, and clients need to understand what they can expect for the dollars they spend.
2015-05-26 00:00:00 The Most Important Step to Convert Prospects by Dan Richards (Article)
Most advisors using traditional mass-marketing methods without building early credibility will see heightened struggles to get a return on their effort. Fortunately, once the will and priority is in place, there are some proven models to successfully build credibility.
2015-05-12 00:00:00 The Best Approach to Adjustable Retirement Withdrawals by Joe Tomlinson (Article)
A great deal of recent research has focused on strategies that adjust withdrawals in retirement depending on investment experience. But such strategies disrupt retirement plans by causing withdrawals to vary a lot from year to year. I'll examine the prominent approaches for determining what will work best for clients.
2015-05-12 00:00:00 How to Make Your Message Persuasive by Daniel Solin (Article)
We all want to make our message persuasive, but few advisors pay attention to the peer-reviewed studies identifying the most efficient methods for doing so.
2015-05-11 00:00:00 Taming Longevity Risk by Patrick Drum of Saturna Capital
"In spite of the cost of living, it's still popular." - Kathleen Norris. These words offered by Kathleen Norris decades ago carry more weight than ever before, particularly within the realm of financial planning and saving for retirement.
2015-04-28 00:00:00 Build Your Business by Being Charitable by Teresa Riccobuono (Article)
One of the unintended benefits of being charitable is being exposed to new business opportunities. Let's discuss a few ways to become involved.
2015-04-24 00:00:00 Attractively Valued Ameriprise Financial: a Long-Term Total Return Opportunity Raises Dividend 16% by Chuck Carnevale of F.A.S.T. Graphs
Ameriprise slightly missed their earnings estimates for the first quarter of fiscal 2015, and the stock has dropped over 3%. However, their return on equity increased to a record high 23.1 % and operating earnings were up 7%. Management appears to remain confident about the future as evidenced by the raising of their quarterly dividend 16% to $0.67 per share. Consequently, I consider the recent weakness an excellent opportunity for long-term oriented investors desirous of earning an above-average total return.
2015-04-22 00:00:00 How Organization Promotes Successful Outcomes by Patty Quinn McAuley of Clark Capital Management Group
By delivering a realistic road map to clients, illustrating their financial future, you can help them remain confident and on course toward successful outcomes.
2015-04-21 00:00:00 The Best Asset Allocation for Retirees by David Blanchett (Article)
In this article, I determine the optimal glide path for retirees using varying initial bond yields and stock market valuations.
2015-04-21 00:00:00 Closing the Retirement Gender Gap by Jeff Briskin (Article)
New research shows how a lack of "retirement readiness" puts many women at risk of financial hardship during their retirement years, especially since most will outlive their spouses.
2015-04-14 00:00:00 New Research: Reverse Mortgages, SPIAs and Retirement Income by Joe Tomlinson (Article)
Retirees need longevity protection and additional funds. Annuities and reverse mortgages can meet those needs. While annuities have been researched extensively, reverse mortgages haven't received as much attention. We need research on how to fit these two products together in overall retirement plans. I'll launch that effort here.
2015-04-09 00:00:00 It’s Time to Make Taxes Less Taxing by Michael Allison, Peter Crowley, Jim Evans, Tom Metzold, Rey Santodomingo of Eaton Vance
Can a strategy based on asset allocation, asset location and asset management increase the tax efficiency of your portfolio?
2015-03-31 00:00:00 The Final Say on Spending Rules by Laurence B. Siegel (Article)
After decades of focused research, why can't finance experts decide on a safe withdrawal rate for retirement? It is time to refocus this debate by asking a slightly different question: Is there a spending rule that retirees can use over a fixed time horizon? There is and I call it "the only spending rule you will ever need."
2015-03-31 00:00:00 Why 2015 Will Be the Year of the Roth: Meet the “Freight Entrance” Roth 401(k) Conversion by John H. Robinson (Article)
Two new tax rules will affect the treatment of 401(k) monies. Taken individually, the rules were not particularly far-reaching or noteworthy, but together they will reshape the retirement-planning landscape. Roth IRA conversions that previously trickled through the cumbersome "backdoor" will be supplanted by a new wave moving through the "freight entrance."
2015-03-31 00:00:00 Two Routes to Compelling Value by Dan Richards (Article)
Low-cost alternatives for financial advice and investing are forcing advisors to articulate why clients should pay a premium to do business with them. This week's article features two different approaches that could help you communicate your value to prospective and existing clients.
2015-03-31 00:00:00 Are You Building a Harley Davidson Practice? by Teresa Riccobuono (Article)
Harley Davidson is the only company I know of whose customers permanently tattoo its name on their body. What is it that makes Harley Davidson customers want to show their support in this way? Bad-boy image, reputation, quality products, exceptional service?
2015-03-24 00:00:00 How do Deferred-Income Annuities Stack Up Against Rival Products? by Joe Tomlinson (Article)
Deferred-income annuities (DIAs) have received a lot of attention with new Treasury Department regulations encouraging their use. Many tout them as providing the most cost-effective way to generate retirement income. But retirement products are not one-size-fits-all. I'll show where DIAs fit among the products and investment solutions available to advisors.
2015-03-17 00:00:00 The Art of Pension Hopping by Antolin Du Bois, CFP® (Article)
Clients who are unlikely to complete a traditional 30-year defined-benefit pension and are willing to pursue an un-orthodox strategy of switching work locations, continually re-purchasing prior service completed in another location will increase their work options, their retirement security and their overall pension income.
2015-03-10 00:00:00 Use "Self-Distancing" to Make Better Decisions by Daniel Solin (Article)
Before I became a consultant and coach to a number of financial planning firms, I used to run my own investment advisory firm. I believe the advice I give today is far superior to the actions I took when I managed my own firm. Now I understand why.
2015-03-10 00:00:00 President Obama's 2016 Federal Budget Proposal by Tim Steffen (Article)
Both parties are focused on passing some type of tax reform this year, and in order to do that Republicans will likely have to concede on at least some of the president's wishes. Which of those may survive remains to be seen, but it's now up to the Republicans in Congress to respond with a proposal of their own.
2015-03-04 00:00:00 The Millennial Obsession by Jerry Wagner of Flexible Plan Investments
You cannot pick up a business publication, tune into a financial news program, or glance at any news website without confronting yet another story on Millennials.
2015-02-24 00:00:00 A Fresh Look at Life Settlements in 2015 by Stephen Terrell (Article)
Rather than let unneeded term policies expire, clients may be able to sell them to a life insurance settlement provider. Life settlements were historically limited to whole-life policies, but new developments offer advisors greater flexibility to access cash for a variety of insurance products.
2015-02-17 00:00:00 Robo-Advisors Are Not New But They Foretell the Future of Financial Advice by Joe Tomlinson (Article)
So-called robo-advisors have been heralded as the next generation of technology that will transform the financial advice industry. Underneath the considerable debate that has emerged over their potential impact, an obvious fact has been overlooked: Much of what they offer is distinctively "old school."
2015-02-10 00:00:00 Harold Evensky - Nine Key Communication Points by Robert Huebscher (Article)
Advisors should put their mouths where their money is, according to Harold Evensky. Educating and preparing clients for what advisors will ultimately deliver must be a core principle of every practice. In a recent presentation, Evensky described nine key ways that advisors should interact with clients, the media and their peers.
2015-02-06 00:00:00 Global Opportunities: The Next Leap Forward for Defined Contribution Investment Menus by Charles Roth of Thornburg Investment Management
Under ERISA, fiduciaries are obligated to ensure plan menus provide diverse investment options to help minimize the risk of long-term losses in account values. Global, non-traditional equity and fixed income options are sorely lacking in Defined Contribution (DC) plan menus. These op-tions can offer both lower correlation to U.S. markets and potentially strong returns, which par-ticipants increasingly need given the uncertainty surrounding Social Security’s future benefit levels.
2015-02-04 00:00:00 Is It Time for Our Industry To Embrace Mass Personalization? by Patty Quinn McAuley of Clark Capital Management Group
Nike. Coca-Cola. Oakley. They are all top brands in the global marketplace and they have all led the charge towards mass customization and personalization. You can build a custom pair of Nike Free Run sneakers online, incorporating your favorite designs and colors. You can put your name on a virtual Coke bottle and “share” it on social media. You can even custom-build your own shades on Oakley.com, creating your own unique pair of sunglasses.
2015-02-03 00:00:00 Doing Business Through the Know, Like, and Trust Process by Teresa Riccobuono (Article)
We have all heard the phrase, "People like doing business with people they know, like and trust." But how does one get to the point of trust in a relationship?
2015-01-27 00:00:00 11 Investing and Personal Finance Hacks by Roger Nusbaum of AdvisorShares
You?ve probably seen one or two of the listy articles about life hacks which are little tricks that can make the day to day routine a little easier. Some are for very mundane aspects of life like using a paper clip to mark the spot where the roll of tape starts or laying a wooden spoon across a pot of boiling water to prevent it from boiling over. I saw one of these lists a few days go where one of the hacks was a little off the beaten track, suggesting you always carry bolt cutters with you.
2015-01-20 00:00:00 Retiring in a Low-Return Environment by David Blanchett, Michael Finke and Wade Pfau (Article)
Low bond yields and high equity valuations suggest lower spending for retirees. Prior research forecasted the impact on safe-withdrawal rates (SWRs), but a more sophisticated model can improve the accuracy of those predictions. We show just how low the SWRs should be for today's retirees.
2015-01-20 00:00:00 Are You Considering a Client Advisory Board? Here's What You Need To Know. by Teresa Riccobuono (Article)
As part of your 2015 marketing calendar, consider including a client-advisory board.
2015-01-13 00:00:00 The Advantages of a Dynamic Retirement Income Strategy by Joe Tomlinson (Article)
Retirees will adjust their spending depending on investment experience. But most research uses withdrawal strategies that are fixed at inception, such as the 4% rule. I'll show that when spending can adjust each year, retirement outcomes will improve. I'll also show the gains that can be achieved by adding annuities.
2014-12-30 00:00:00 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)
Great articles don't always get the readership they deserve. Here are 10 that you might have missed, but I believe merit reading
2014-12-30 00:00:00 Qualified Charitable Distributions by Tim Steffen (Article)
The Qualified Charitable Distribution rules allow taxpayers to make IRA distributions payable directly to a qualified charity without treating the distribution as taxable income. The QCD rules have expired and then extended periodically over the years, and were recently extended again through 2014 with the passage of the Tax Increase Prevention Act of 2014. These rules do expire again after 2014, meaning taxpayers will enter 2015 with the same uncertainty they had throughout the prior year.
2014-12-23 00:00:00 Tax Increase Prevention Act of 2014 by Tim Steffen (Article)
In the waning days of the Congressional year, the House and Senate gave new life to more than 50 tax provisions that had expired at the end of 2013, giving them all a one-year extension through 2014. Included in this extension were popular individual tax breaks, including the ability to make charitable gifts directly from an IRA, an option to deduct state sales tax rather than income tax and an above-the-line deduction for tuition costs. The bill also created a new tax-favored savings account for those with disabilities.
2014-12-23 00:00:00 Three Reasons why Robo-Advisors are a Huge Benefit to the Advisory Profession by Bob Veres (Article)
It's time to change our thinking about the so-called robo-advisory firms that are moving into the financial planning landscape. They are going to be far more beneficial to the planning/investment advisory profession than any innovation in recent decades. Let's explore three ways these firms are changing the planning ecology, and note that all of them are not just positive, but significantly positive.
2014-12-16 00:00:00 How Much Risk Should Clients Take? by Joe Tomlinson (Article)
Determining the degree of risk that is appropriate and tolerable in clients' financial plans is central to an advisor's role. I will show how advisors should deconstruct risk into six components and then integrate them using a framework to provide the best recommendations for clients.
2014-12-16 00:00:00 Financial Planning for an Uncertain Energy Future by Richard E. Vodra (Article)
Advisors hearing optimistic forecasts of plentiful new supplies of oil that may last for decades may be encouraged to make aggressive projections for their clients. It is critical to understand the role oil plays in the economy and the factors that will affect future supplies. Advisors should "drill down" beneath the slogans to see both risks and opportunities upon which to base their recommendations.
2014-12-16 00:00:00 Why I'm Concerned about Stock Market Valuation Levels by Ron A. Rhoades, J.D., CFP® (Article)
Looking at a range of valuation metrics, long-term investors have good reason to worry about the U.S. equity market. They can take comfort, however, in the fact that certain asset sub-classes are less overvalued that others.
2014-12-16 00:00:00 Increase the Emotional Connection with Your Prospects by Daniel Solin (Article)
To convert prospects into clients, you need to make an emotional connection. Lecturing, educating, presenting data or otherwise demonstrating your superior expertise in financial planning and investments will not achieve that goal.
2014-12-09 00:00:00 The Hidden Value of a Reverse Mortgage Standby Line of Credit by Wade Pfau (Article)
Recent research has investigated how opening a standby line of credit through a reverse mortgage and strategically spending from this line of credit can help improve the sustainability of retirement income strategies. In this article, I show that the benefits of opening a home-equity conversion mortgage (HECM) line of credit extend beyond meeting spending needs.
2014-12-09 00:00:00 Capital Gains and Losses - Timing Is Everything! by Glenn Frank (Article)
This article will lend insight into one of the few areas that investors actually can control in our new American Taxpayer "Relief" Act environment.
2014-12-09 00:00:00 How to Deal with Unresponsive Clients by Teresa Riccobuono (Article)
We all have clients who, for whatever reason, become unresponsive to our calls and emails. Here's a process that will address those unfortunate situations.
2014-11-18 00:00:00 Why the Risk-Reduction Benefits of Bond Ladders Have Been Overstated by Joe Tomlinson (Article)
Proponents of bond ladders argue that they will significantly improve the security of financial plans. Others contend that the risk reduction benefits are merely a mirage. I side with the latter view and will explain why.
2014-11-17 00:00:00 The Hypocritical Assertions of CFP Lobbyists CFP Lobbying Organization Calls Out RIAs by John H. Robinson (Article)
Recently released research from the Financial Planning Coalition is likely generating the desired attention its media-savvy crafters intended, but an informed reading of the materials reveals a campaign that is at odds with the ethical preaching of its three member organizations.
2014-11-04 00:00:00 Identifying and Communicating Your Key Differentiators by Kristen Luke (Article)
Let's look at how advisors can communicate the ways in which they are different - a common struggle for many firms.
2014-11-04 00:00:00 It's Time to Shift from Pink to Purple by Sponsored Content from Transamerica (Article)
With the end of National Breast Cancer Awareness Month in October, we turn our attention to National Alzheimer's Disease Awareness Month and National Caregiver Month in November. Throughout the month, the New Age of Advice will feature blog posts with insights about Alzheimer's designed to help advisors gain a better understanding of this devastating disease.
2014-11-04 00:00:00 Outrunning the Bear: An Active Managers Survival Guide by William Smead of Smead Capital Management
Two long-time friends go up in the mountains on a hunting trip. At 4:30 A.M. of the second day, one of the men wakes up at one end of the tent to find his buddy dressing and putting on his running shoes at the other end. He asks him what he is doing. His friend says, There is a bear outside our tent. The other guy exclaims, You cant outrun a bear! His friend replies, I dont have to outrun the bear, I just have to outrun you.
2014-10-30 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
Harold Evensky presents his quarterly newsletter.
2014-10-28 00:00:00 Five Holiday Marketing Tips by Megan Elliott (Article)
The holiday season is an ideal time to reach out and remind people what you do in a more personal, less sales-focused way than you might at other times of the year.
2014-10-22 00:00:00 Retirement: How To Avoid Outliving Your Savings by Gary Halbert of Halbert Wealth Management
With over 10,000 Baby Boomers retiring every day, a pattern that will continue for the next 20 years, retirement savings continues to be one of the most important issues of our day. With 76 million Americans born between 1946 and 1964 the Baby Boom Generation saving enough for retirement is critically important.
2014-10-21 00:00:00 The Wrong Question to Ask About Marketing by Mandy Fisher (Article)
When confronted with a marketing decision, the first thing most advisors ask how much it will cost. But that's the wrong question.
2014-10-21 00:00:00 The Tool that Will Transform Firmwide Financial Planning by Bob Veres (Article)
Alex Murguia, founder and CEO of InStream Solutions, may be the most creative visionary in today's advisor software ecosystem. And like all people who think outside the box, sometimes he discovers that his best ideas have far better uses than he intended.
2014-10-21 00:00:00 Advising Clients about When to Retire by Joe Tomlinson (Article)
Clients are often surprised to learn that delaying retirement can increase retirement income by a lot. Although each case will be different, I'll present an example to provide some general insights.
2014-10-14 00:00:00 How to Promote Your Case Studies by Elizabeth Snyder (Article)
If you don't promote your case studies effectively, they won't help you achieve your marketing goals.
2014-10-08 00:00:00 Why Do Investors Really Underperform Over Time? by Lance Roberts of Streettalk Live
There have been numerous articles written as of late that have chastised individuals for "missing out on the bull market" which was only slightly worse than "not beating it." The reasons were chalked up to bad investment advice and paying "too much" in fees which caused the underperformance. While both of those reasons may be contributors to the problem, they are in reality on very small components of the problem when compared to the three single largest contributors to investor underperformance over time.
2014-10-07 00:00:00 The Five Biggest Ways Your Practice Needs to Change by Bob Veres (Article)
Telling you to brace for change, over and over again, isn't exactly helping you make concrete plans. With the constant demands on your time, it would be helpful to know: What are the new realities to which you must adapt? Where are the transitions going to impact your practice? What old ways are you going to have to abandon, and what new ones will you have to adopt? Here's my list, including five that are either urgent or high-priority changes.
2014-09-30 00:00:00 Why You Should Stop Blogging About Investing by Megan Elliott (Article)
Now that virtually every advisor is a blogger, it's harder to stand out. There's no shortage of people expounding on financial planning and investing online. Here's what to write about instead.
2014-09-24 00:00:00 Open Sesame by Brian Andrew of Cleary Gull
Often times, investors are interested in pursuing investments in the hottest asset class. The hype surrounding the Alibaba IPO is an example of how a sector gets a boost from a hot new stock. The fact that the stock traded up almost 40% in the first day of trading is an indication that the sector is hot. It is difficult not to want to add more capital to that portion of your portfolio that is performing best while ignoring the portion that isnt performing as well. Of course that is exactly what you are supposed to do and what rebalancing is all about.
2014-09-23 00:00:00 Jeremy Siegel vs. Zvi Bodie: Does Equity Risk Decrease Over Time? by David Blanchett, Michael Finke and Wade Pfau (Article)
Stocks should be the asset class of choice for the long run, according to Wharton Professor Jeremy Siegel - and he has provided the data to prove it. But that paradigm has been challenged by Boston University Professor Zvi Bodie and others, who have shown that stocks become riskier the longer one owns them. Either view has profound implications for whether equity allocations should increase or decrease over time. Using Monte Carlo simulations, we provide guidance for the advisory profession.
2014-09-16 00:00:00 The Key Problem with Monte Carlo Software - The Need for Better Performance Metrics by Joe Tomlinson (Article)
Popular financial-planning software packages have shortcomings in the metrics they use to evaluate the outputs from Monte Carlo simulations; other metrics provide more useful information. I will address how to measure the performance of financial plans when variable investment returns and longevity are introduced and demonstrate that the most-commonly used measures have weaknesses.
2014-09-16 00:00:00 Now is the Time to Build Your 2015 Marketing Plan by Mandy Fisher (Article)
There are four building blocks that create a well-balanced marketing plan for financial advisors: infrastructure, awareness, lead generation and conversion. I will walk you through each block so that you have a clear understanding of what they are and how you can build your 2015 marketing plan.
2014-09-09 00:00:00 What is "Fee-Only?" Is the CFP Board Taking the Right Approach to Defining it? by Bob Veres (Article)
Which is more important to your advisory practice - your CFP designation or your fee-only status? Before you answer, consider this: Your CFP mark says very little about whether you adhere to a fiduciary standard, and less about your mode of compensation. Those issues are at the forefront of an ongoing controversy pitting the CFP Board against a prominent advisor, and there is little sign that its outcome will resolve the ongoing debate about how to define a fee-only professional engagement. If anything, it raises more questions than answers.
2014-09-09 00:00:00 The #1 Hot-Button Topic for Wealthy Families by Dan Richards (Article)
The financial and emotional cost when important topics go undiscussed is so great that in many cases, facilitating that conversation is the No. 1 way that advisors can make a positive impact in the lives of wealthy clients.
2014-09-08 00:00:00 Correlation Convergence is Hurting Your Investment Performance by Vern Sumnicht of iSectors
Correlation is a statistical term that helps describe the relationship between two investments, enabling an investor to determine how similar two investments are to each other. By understanding the correlation between the investments in a portfolio, an investor can understand how likely it is, for example, for two or more of those investments to gain or lose money at the same time.
2014-09-02 00:00:00 Ranking the Top 10 "Differentiators" for Advisory Firms by Bob Veres (Article)
If we have a clear idea of what foregrounds one advisory firm ahead of others, then we can deliberately cultivate those characteristics. The problem is, nobody has ever compiled a comprehensive list of differentiators, much less ranked them according to importance. So, to fill that obvious void, I've ranked the top 10 differentiators that I've personally seen advisors use in their positioning and marketing.
2014-09-02 00:00:00 Can Retirees Still Use a 4% Withdrawal Rate? Practical Applications of Monte Carlo Analysis by Wade Pfau and David Blanchett (Article)
Some advisors remain critical of Monte Carlo simulations, instead preferring to use analysis based on rolling historical periods or specific pre-defined scenarios. We believe Monte Carlo is a superior tool for measuring the uncertainties in long-term financial planning. As an example, we use it to predict the likelihood of a successful 4% withdrawal rate under today's market conditions.
2014-09-02 00:00:00 Your Clients Don't Care About You by Megan Elliott (Article)
Conversations with clients should be about them, not you.
2014-08-26 00:00:00 Successful Succession Planning - Building Your Legacy and Keeping It by Alan Rosenfield (Article)
RIAs need a succession plan. But what does that mean, and how can you get one?
2014-08-26 00:00:00 These Four Mistakes Will Shipwreck Your Email Marketing Campaign by Alan Del Rosario (Article)
Here are four common mistakes that will shipwreck your email marketing campaign.
2014-08-19 00:00:00 How to Choose the Right Fixed-Income Strategy by Joe Tomlinson (Article)
The fixed-income portion of retirement portfolios is just as important as the equity allocation, yet far less research has been devoted to it. Advisors must decide whether to pursue active or passive strategies and which types of bonds to recommend. I'll address those strategic choices and argue that the best approach is the simplest, lowest-cost one.
2014-08-05 00:00:00 Ten Reasons the Advisory Business is Unlike Any Other by Bob Veres (Article)
The business dynamics that an advisory firm faces are so fundamentally different that any small business owner, dropped into your executive chair, would feel like she had been transported to another planet. To see how exceptional your business climate really is, let's take a quick tour of some of the differences between an investment advisory firm and a typical member of the business landscape.
2014-08-05 00:00:00 The Toughest Conversation with Clients by Dan Richards (Article)
Good advisors are used to challenging conversations with clients about unrealistic expectations and sticking to plans in tough markets. But going forward, no conversation will be more difficult than the one about how much you charge - especially when we enter the next market downturn. You need to do three things to handle those conversations effectively.
2014-08-02 00:00:00 Index funds beat active 90% of the time. Really? by Robert Isbitts of Sungarden Investment Research
My last article suggested six ways in which retired and retiring investors may be lulling themselves into a false sense of comfort. They do this by adhering to ideals that were originally postulated many years ago, and which today still have some merit. But theyve become clichs to a point where their foundation is no longer questioned when it needs to be. They are myths which need to be busted
2014-07-29 00:00:00 20 Predictions for 2039 by Dan Richards (Article)
The shifts in the next 25 years will be just as substantial as those in the previous 25 years, and the most successful advisors will be those who are able to anticipate and adapt to these changes. Here are 20 predictions for what the financial-advising business will look like in 2039.
2014-07-22 00:00:00 How to Choose the Best Retirement Income Strategy by Joe Tomlinson (Article)
In the competition among retirement-planning methodologies, systematic withdrawals have been winning the battle against the essential-discretionary approach. But given today's low interest rates, the essential-discretionary approach may work better for many clients, especially if SPIAs are used.
2014-07-16 00:00:00 Danger of Increased Risk Taking as Markets Boom by Geoff Davey of FinaMetrica
While some investors (and their advisors) believe risk tolerance changes with major events such as a stock market correction, typically it is an investors perception of risk that changes, which results in a change in their behavior. At the moment, many investors are buying stocks with elevated P/E ratios. Prices are going up a lot faster than corporate earnings and the risks are getting bigger. Yet people are still buying stocks.
2014-07-15 00:00:00 Retirement Planning with Annual Available Spend by John Craig (Article)
Sound financial planning requires neither the determination of safe withdrawal rates nor the use of Monte Carlo simulations. Relying on the past to predict the future is unnecessary. Instead, one must focus on how much can be spent each year, given expected returns and inflation, and then consider how negative and worst-case scenarios would affect retirement planning. That is the basis for the annual available spend methodology I describe here.
2014-07-15 00:00:00 Survey Best Practices, Part 2: Question Intent and Types by Elizabeth Snyder (Article)
Here are some tips that will increase your chances of gathering meaningful survey results.
2014-07-08 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
Hi! I hope you had a great 4th and youre having a great summer. Its been a busy one at E&K as youll see from my closing note and a fun one for Deena and me as we recently returned from a cruise to Reykjavik, Iceland, a most charming city but a bit off-putting with over 20 hours of sunlight.
2014-07-01 00:00:00 What an Elite Group of Younger Advisors Has to Say by Bob Veres (Article)
I recently served as a facilitator for the annual NexGen conference, this year held on the campus of Augustana University in Moline, IL. I was able to gain insight into the very different way that the financial planning landscape looks through the eyes of younger advisors just starting their careers - and in many cases, from the bottom end of a planning firm's organizational chart.
2014-07-01 00:00:00 Five Social-Media Timesavers by Sarah Scorgie (Article)
Save time on your social-media efforts by planning ahead and using online tools.
2014-06-17 00:00:00 Retirement Income Strategies: How to Improve on the 4% Rule by Joe Tomlinson (Article)
In the past few years, the 4% rule has been challenged by those who claim its premise of 4% inflation-adjusted withdrawals is too optimistic under today's market conditions. Others assert that more sophisticated approaches will yield better-than-4% results. I'll evaluate two alternatives - economic utility maximization and required minimum distributions - and also discuss the practical implications for advisors.
2014-06-17 00:00:00 Seven Tips for Delivering Bad News by Megan Elliot (Article)
You can better communicate bad news to clients by keeping the following seven tips in mind.
2014-06-10 00:00:00 Six Questions for the Future of the Planning Profession by Bob Veres (Article)
A few weeks ago, I asked for your help as we created the scenario learning session for the Insider's Forum conference in September. We're going to map out some possible futures that you can prepare for, using as raw material the crowdsourced thoughts and ideas that you provide to us. Here are six questions that have been raised and addressed about the future in the first round of our exercise.
2014-06-10 00:00:00 Survey Best Practices, Part 1: Designing Your Survey by Elizabeth Snyder (Article)
If you are not accustomed to regularly surveying your clients, here are some basic guidelines to consider when it comes to survey design, layout and structure.
2014-06-05 00:00:00 Q2 2014 Investment Letter by Sean Butson of DC Capital Management
The S&P 500 is now more than 5 years into the bull market that started on March 9, 2009 Historically, buying the S&P 500 at high valuations and low dividend yields has resulted in sub-par investment returns on average The S&P 500 is currently overvalued based on 7 different metrics, implying that future long-term returns are likely to be disappointing Overvaluation is not limited to the S&P 500, as a number of recent technology valuations are reminiscent of the late 1990s tech bubble We believe a bear market within the next few years is likely
2014-06-03 00:00:00 The Value of a Secondary Call to Action by Sarah Scorgie (Article)
In today's technological world, email has become the easiest way to connect with potential clients. With Web-based email marketing services, it's easier than ever to communicate with leads - but are your calls to action making the most of your campaigns?
2014-05-27 00:00:00 Defensive Position Rotation: Achieving Financial Goals with Less Volatility by Dale W. Van Metre, Ph.D., CRPC®, APMASM (Article)
Defensive position rotation is an alternative to MPT. It is a portfolio-construction philosophy that adapts to changing market conditions and can increase risk-adjusted returns over time.
2014-05-21 00:00:00 Interest Rates Have To Go Up. The "Bond King" Says No by Gary Halbert of Halbert Wealth Management
The prevailing view on Wall Street and Main Street is that medium and long-term interest rates have to go higher in the months and years ahead. Interest rates have to get back to normal at some point, so were told. Yet in the last several months, yields on 10-year Treasury notes and 30-year Treasury bonds have fallen rather significantly. Whats up with that?
2014-05-20 00:00:00 Creating Error-Free Marketing Materials by Megan Elliot (Article)
Here's how to avoid marketing mistakes that will negatively affect your firm's credibility.
2014-05-13 00:00:00 Why SPIAs are a Good Deal Despite Low Rates by Joe Tomlinson (Article)
SPIAs have been out of favor in the current low-interest-rate environment. But my new research indicates that they still offer especially attractive opportunities for retirees. One of the key reasons is that typical advisor clients will, on average, live longer than the overall population.
2014-05-13 00:00:00 The Virtues of Rebalancing by Craig L. Israelsen, Ph.D. (Article)
Does rebalancing improve portfolio performance? Yes - but it takes time for the benefits of rebalancing to be fully manifested, at least in the case of a broadly diversified 12-asset portfolio.
2014-05-13 00:00:00 Revisiting the Research on SPIAs in Retirement Portfolios by James Shambo, CPA/PFS (Article)
The conclusions drawn by Michael Kitces and Wade Pfau in their paper, The True Impact of Immediate Annuities on Retirement Sustainability, are flawed.
2014-05-06 00:00:00 Ten Ways the Next Generation of Financial Planners Will Change the Profession by Bob Veres (Article)
I have distilled ten key themes that illustrate how the next generation of advisors will change the profession when they take the reins.
2014-05-06 00:00:00 A Simple Technique to Convert More Prospects into Clients by Dan Solin (Article)
To become great at converting prospects into clients, remember these two words
2014-05-06 00:00:00 Fighting Financial Advisor Anxiety: Part Two by Sarah Scorgie (Article)
Last month, I discussed how to calm clients’ nerves with educational marketing strategies. Now, I’ll discuss strategies for making your practice more relatable.
2014-05-02 00:00:00 Views of the Insane on Diversification by Kendall Anderson of Anderson Griggs
I recently read this quote from Craig L. Israelsen, a Financial Planning contributing writer in Springville, Utah. Granted, I have never met, nor have I had any conversations with Mr. Israelsen, but he seems to be a competent professional. According to his bio, he is an executive in residence in the personal financial planning program in the Woodbury School of Business at Utah Valley University. However, his statement still bothers me a bit, as he is saying that any other investment approach must be insane.
2014-04-29 00:00:00 How to Help Business Clients Unlock Wealth by Bob Veres (Article)
Is there a way to help your business clients diversify their holdings, take some risk off the table and create a side investment portfolio that will sustain them if their business runs into trouble? Is there a way you can help your clients find capital when they need it most?
2014-04-29 00:00:00 Content Marketing: The Long and Short of It by Meghan Elliot (Article)
While capsulated content - tweets, Facebook posts, 30-second videos and snappy emails - has an important place in your marketing strategy, you have to make room for longer content that educates and informs on more complex issues.
2014-04-22 00:00:00 Why Annuities HATE Ken Fisher. And you should too. by John H. Robinson (Article)
Before we commend Ken Fisher for his vitriolic antipathy toward variable annuities, there is one little problem we need to recognize. Fisher’s claims are at odds with a growing body of empirical research published in peer-reviewed academic and professional journals.
2014-04-22 00:00:00 The Surprising Number One Driver of New Clients by Dan Richards (Article)
Among sophisticated clients, referrals arent the most important determinant in deciding on an advisor. Heres what is.
2014-04-22 00:00:00 What SEC Social Media Guidance Means for You by Kristen Luke (Article)
Recently, the SEC published new testimonial and social media guidelines that cleared the way for advisors to use social media review sites like Yelp and Angie’s List. Such sites were previously restricted because they provided content that was generally seen as testimonials. While the new guidance may seem like a big leap forward for financial advisors who use social media, there are still many restrictions, so it is important to understand what you can and cannot do.
2014-04-22 00:00:00 The State of the CFP Board Registered Financial Planning Programs? by Caleb Brown (Article)
Each year I spend several days visiting various Certified Financial Planner Board-registered programs throughout the country to ensure that as an industry, we are continuing to source, screen and integrate the best available talent for the financial planning firms we represent. On the plus side, I found many students are ready and eager to enter the financial-planning world. But there were also ominous signs for the future of our profession.
2014-04-22 00:00:00 Letters to the Editor by Various (Article)
Readers respond to three recently published articles, and the authors of those articles respond to those letters.
2014-04-15 00:00:00 Our Most Read Article from Last Week: Do Small Cap-Value Stocks add Value in Retirement Portfolios? by Joe Tomlinson (Article)
Research going back to Fama and French in the early 1990s has shown that small-value stocks have produced superior returns. Subsequent debate has centered on whether this superior performance will continue and if investors should tilt portfolios to capture those returns. Ill examine the historical evidence, incorporate it in retirement examples and discuss the future prospects for small-cap value.
2014-04-08 00:00:00 Do Small Cap-Value Stocks add Value in Retirement Portfolios? by Joe Tomlinson (Article)
Research going back to Fama and French in the early 1990s has shown that small-value stocks have produced superior returns. Subsequent debate has centered on whether this superior performance will continue and if investors should tilt portfolios to capture those returns. Ill examine the historical evidence, incorporate it in retirement examples and discuss the future prospects for small-cap value.
2014-04-08 00:00:00 How to Get Chatty Clients off the Phone by Beverly Flaxington (Article)
My clients are very happy - I know because they call me with every little question and I respond. Some just call to talk about Obamacare or the market trends. Its not that I dont enjoy the conversations, but it gets very difficult to plan my day with this much chatting.
2014-04-08 00:00:00 Adding Direct Mail Advertising to Your Marketing Mix by Elizabeth Snyder (Article)
Advisors rarely generate the positive activity necessary to make direct mail worthwhile and cost effective. But they have an opportunity to capitalize on direct mail as a marketing strategy, especially since it offers advantages over electronic marketing (such as email): Direct mail reaches people directly in their homes and provides physical documents that recipients can save and refer to later.
2014-04-03 00:00:00 Fiduciary vs. Suitability Standards-Your Need to Know the Difference by H. William Wolfson of American Financial Advisors
Beth Banker, a successful business woman, has been having ongoing neck and back issues. She decided to access web based information as to obtain self treatment options. Upon her reading, she realized that her condition, although appearing musculoskeletal in nature may be more involved with underlying pathologies. Although her intent was to heal herself, in reality she became more concerned and stressed as to the amount of research and data that existed?which she didn?t understand.
2014-04-03 00:00:00 ProVise Bullets by Team of ProVise Management Group
During the Great Recession, America laid off two million factory workers and factory output fell 20 percent. Before the Great Recession, of course, manufacturing jobs were headed overseas. As we have slowly emerged from the Great Recession, its a little surprising to some that manufacturing has led the way, outpacing overall GDP growth. This year it looks like manufacturing could add 3.5 percent in growth. Is this just a replacement of jobs that were lost during the Great Recession?
2014-04-01 00:00:00 The Alpha Strike Zone by Michael Finke (Article)
Investors have known about mutual-fund style boxes for a long time, but few understand their purpose. Should an advisor identify the best fund in each of the boxes? Should they attempt to capture equal exposure to all styles?
2014-04-01 00:00:00 Fighting Financial Advisor Anxiety by Sarah Scorgie (Article)
Here’s how to help prospective clients educate themselves before walking into a meeting with you.
2014-03-25 00:00:00 Rethinking your Newsletter by Megan Elliot (Article)
Newsletters, once a cornerstone of advisor marketing, now look a bit old-fashioned. Compared to Facebook, Twitter, videos, blogging and other flashier marketing strategies, many simple newsletters look boring and dated. But newsletters can still have a place in your marketing repertoire, provided you approach them in the right way.
2014-03-18 00:00:00 How Reverse Mortgages Improve Sustainable Withdrawal Rates by Joe Tomlinson (Article)
Standby reverse mortgages (SRMs) have been viewed as a product only to be utilized late in life, after other retirement funds have been depleted. But new research shows that SRMs are a useful tool during retirement to increase sustainable withdrawal rates. I’ll describe how the SRM works and highlight key findings from the research.
2014-03-18 00:00:00 The Misconceptions About Selling that Impede Success by Dan Solin (Article)
RIAs who generate meaningful assets under management can significantly increase their earnings. Every RIA appreciates this. Many believe superior knowledge and expertise is key to capturing more business, but they often overlook other factors. There are also some misconceptions about selling that actually impede success. Here are some examples.
2014-03-18 00:00:00 How to Help Clients Prepare for End-of-Life Decisions by Emir Phillips (Article)
End-of-life decisions should be addressed by all financial planners. People are dying more from chronic illnesses, and deaths are increasingly occurring in institutions, where individuals and their families may incur significant expenses. Those costs could be substantially mitigated with proper advance-directive planning initiated and guided by a caring financial planner.
2014-03-15 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
Harold Evensky's quarterly letter to his readers.
2014-03-13 00:00:00 Investment Portfolios Need Someone to Take Fiduciary Responsibility by William Wolfson of American Financial Advisors
There is a protocol to follow after a new patient enters your office. Staff is expected to meet, greet, welcome and have a patient fill out forms. This allows the Doctor of Chiropractic (D.C.) to ascertain demographics, responsibility of payment, the patient?s primary complaint and reason for visiting the office. Similar to that of a Doctor of Chiropractic who cares for a patient and follows the oath to do no harm, a Certified Financial Planner (CFP), parallels the doctor?s fiduciary responsibility.
2014-03-11 00:00:00 Why You Should Stop Asking For Referrals by Elizabeth Snyder (Article)
I hear it all the time: I ask my clients and centers-of-influence (COIs) to think of me if they know anyone who many benefit from my services, yet I never receive any referrals. What am I doing wrong? What should you do if you find yourself in this position?
2014-02-25 00:00:00 Five Technology Trends that are Reshaping the Industry by Bob Veres (Article)
Recently, I spent a couple of days at the annual T3 conference - the financial planning professions version of the Consumer Electronics Show. The conference brings together tech vendors offering planning software, CRM, portfolio tracking, rebalancing and trading, outsourcing, hosting and screening. Here are five trends that will help all of us put the new technology into perspective.
2014-02-25 00:00:00 The Stereotypes to Avoid When Marketing to Women by Kristen Luke (Article)
Many financial advisors dont have marketing materials that appropriately address todays affluent female market. To make a genuine connection with women, choose images for your marketing materials that show you understand who they really are.
2014-02-18 00:00:00 Five Tips for Telling Your Marketing Story by Megan Elliott (Article)
A great story makes your firm stand out. Many financial advisors struggle with storytelling, which can seem vague or touchy-feely, especially if they’re more comfortable focusing on the technical side of wealth management. But telling great stories is easier than it seems. Here are five tips to you get started.
2014-02-18 00:00:00 Building a $250 Million Practice from Scratch by Dan Richards (Article)
We can learn from rookie advisors who, despite all the obstacles, are building large practices from scratch. To achieve a peak level of success entering the financial advisory space today, you have to get a lot of things right. I’ll cover four foundational decisions today and wrap up with some others in next week’s column.
2014-02-11 00:00:00 Providing Better Social Security Advice for Clients by Joe Tomlinson (Article)
Delayed claiming of Social Security benefits makes overwhelming sense, as do strategies that coordinate claiming by couples. But such strategies are unpopular, despite numerous consumer-finance articles highlighting their advantages. Advisors can add significant value for clients by explaining the benefits of these strategies.
2014-02-04 00:00:00 The Actions that Lead to Top Performance by Dan Richards (Article)
In my 30 years of experience dealing with successful advisors, I’ve seen as many paths to success as there are successful advisors. And for those advisors with a well-established practice, that’s actually a good thing - if there was a simple formula for success, the barriers to entry for new advisors would go way down and the flood of successful competitors would put downward pressure on pricing and compensation. Despite the lack of a universal route to success, I have found that successful advisors engage in nine key activities.
2014-02-04 00:00:00 Want to Achieve Marketing Success? Assign Responsibility by Kristen Luke (Article)
Develop a marketing strategy that works for you and your business. Once you find a strategy that works, implement it consistently. But with numerous other responsibilities and distractions, many financial advisors stumble when it comes to implementing their marketing plans. As a result, they do not see the results they anticipated.
2014-01-28 00:00:00 Looking Back at the Advisory Profession 20 Years from Now by Bob Veres (Article)
Ive powered up my time-travel hardware to take a clear look at the year 2034. Ive received budgetary approval to make a long-distance phone call into the future, and conduct a real interview with a successful advisor in that time period. Yes, it was expensive. But nothing is too good for our readers.
2014-01-25 00:00:00 Wealth Services at Banks Come Under Central Bank's Scanner by Rajat Dhar of Cogent Advisory
RBI, the central bank of India, made critical observations of way in which wealth services were being practised at banks. Also, the clear note was made with respect to the rising cases of misselling at banks. This market commentary covers the draft guidelines issued by RBi and tries to uncover the reason for the same and the way forward for the clients. This has been the first time ever that separate guidelines have come for banks and independent financial advisors or advisory firms in India; and this article covers the wealth services being offered by banks in India.
2014-01-21 00:00:00 Superstition Ain't the Way by John Hussman of Hussman Funds
When you believe in things that you dont understand, then you suffer.
2014-01-21 00:00:00 Turning Asset Allocation Upside Down by Roger Nusbaum of AdvisorShares
After the second 50% drawdown of the US equity market in one decade, the investment industry began to reassess the idea of what asset allocation should look like. Unlike the 1980s and 1990s, financial professionals can no longer rely on an almost static 60/40 or 70/30, watch the equity portion triple in 15 or 20 years and then flip the whole thing to fixed income for a safe 6%.
2014-01-14 00:00:00 Five Opportunities for Advisors to Add Value by Joe Tomlinson (Article)
Advisors need to determine where they can add the most value in helping clients achieve their financial goals. Surmounting this challenge is central to a successful business strategy.
2014-01-14 00:00:00 Should Advisors Write a Book? by Megan Elliott (Article)
Not every book becomes a best seller, especially those written by financial advisors. Before you sit down to pound out your opus, step back and evaluate whether writing a book makes sense for you and your financial advisory business.
2014-01-14 00:00:00 Letters to the Editor by Various (Article)
Several readers respond to Wade Pfaus article, How to Use Bond Ladders in Retirement Portfolios, which appeared last week. Readers also respond to two recent market commentaries.
2014-01-07 00:00:00 Ten Predictions for Advisors in 2014 by Bob Veres (Article)
Nobody can predict the markets. But it is possible to forecast the challenges that financial advisors and planners will face in the next 12 months, or at least provide a warning system for impending threats. Here are my top 10 issues to think about as we enter 2014 - offered with humility and respect for the world’s ability to surprise us.
2014-01-07 00:00:00 How to Use Bond Ladders in Retirement Portfolios by Wade Pfau (Article)
Should bonds be kept in mutual funds or purchased as individual securities and held to their maturity dates? The former option receives much far more attention, as managers compete in a performance-driven marketplace. But investing, especially for retirement, shouldnt be driven by maximizing risk-adjusted returns. Advisors must focus on securing a clients future spending needs. I will investigate the role of bond ladders in retirement and which ladder length is best for clients.
2014-01-06 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
To say that 2013 was an interesting year would be a bit of an understatement. We learned a long time ago not to make predictions about the stock market because no matter what is predicted, it is likely to be wrong. Even if we get lucky one year, we are not likely to even get close the following year. We do try to give guidance, however. Last year we suggested that, given the late run in the market in 2012 and its 15% return, investors should be happy with a return of 8 to 10% in 2013. Obviously, investors enjoyed much better returns.
2013-12-26 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
I admit it, I do occasionally pick on Money Magazine and other consumer financial publications, but as Ive written in the past, for the most part, Money does a great job of educating consumers. Its story on Lessons from the Crash "Lehman Brothers collapse in September 2008 sent stocks on a terrifying ride. A year-by-year look back reveals five key takeaways you need to heed today" is an excellent example. Here are Moneys "Lessons."
2013-12-24 00:00:00 The Key to Creating Better Marketing Materials by Elizabeth Snyder (Article)
For your New Year’s resolution this year, consider updating or creating new marketing materials for your firm. Do you know how to communicate your preferences to your creative team?
2013-12-17 00:00:00 Optimizing Asset Location: Is It Worth the Effort? by Joe Tomlinson (Article)
Asset location - the choice of whether to hold stocks and bonds in taxable or sheltered accounts - is receiving increased attention as advisors seek more ways to add value. New research has challenged long-held beliefs. I’ll examine that research and answer a question that should concern every advisor and client: Does the value provided by asset-location advice justify the fees for the work involved?
2013-12-10 00:00:00 How Much Can Clients Spend in Retirement? A Test of the Two Most Prominent Approaches by Wade Pfau (Article)
In my last article, I described research-based innovations for variable withdrawal strategies from retirement portfolios. In this article, I put Guyton’s and Blanchett’s strategies to the test. My results provide planners with a better understanding about the potential spending paths generated by these different approaches.
2013-12-10 00:00:00 Six Things Every Advisor Must Have on Their LinkedIn Profile by Megan Elliott (Article)
An optimized LinkedIn profile is an essential part of any financial advisors marketing efforts. But putting together a great LinkedIn profile involves more than just copying and pasting information from your resume. To get the most out of this professional social networking site, here are six things you need in your LinkedIn profile.
2013-11-29 00:00:00 From the Taj Mahal to Westminster Abbey: Notes from a Global Investor by Frank Holmes of U.S. Global Investors
I recently returned from India, a nation where an incredible 600 million people are under the age of 25. That?s nearly double the entire population of the U.S.
2013-11-26 00:00:00 How to Develop a Fee Schedule by Teresa Riccobuono (Article)
Too many advisors share a reluctance to charge what they are worth. That fear is both a philosophical and a business issue. To overcome it, here are several factors to consider when designing your fee schedule.
2013-11-19 00:00:00 Thoughts from Top Advisors on Building a Physician Niche by Greg Stokes (Article)
Since most doctors are smart and wealthy, they are ideal candidates for a lifetime client-advisor relationship. Three prominent advisors told me how they built and grew a successful practice that catered to physicians.
2013-11-19 00:00:00 New Research on How Much Clients can Spend in Retirement by Wade Pfau (Article)
A major problem remains unsolved in the discipline of financial planning: How should clients adjust their spending patterns in response to changes in the value of their retirement portfolios? The original research on this topic was based on a fixed percentage of assets, adjusted for inflation. Numerous refinements to that model have been proposed, and I will look at how the updated models can help clients maintain their desired standard of living without depleting their assets.
2013-11-12 00:00:00 Beware of Financial Plannings Misguided Rules-of-Thumb by Joe Tomlinson (Article)
Lacking better insights, financial planners cling to rules of thumb, such as allocating a percentage of assets to fixed income based on a clients age. More recently, those rules have been institutionalized through products like target-date funds, which maintain a fixed glide path for all investors. But new research has led to the development of software products that allow advisors to easily improve on the suboptimal outcomes to which clients were previously destined.
2013-11-05 00:00:00 Three Trends That Will Change the Game for Advisors by Steve Lockshin (Article)
This article is excerpted from Steve Lockshins new book, Get Wise to Your Advisor. This book makes an impassioned argument as to why clients should choose independent advisors who adhere to a fiduciary standard.
2013-10-29 00:00:00 Why Deficits Don?t Matter by Bob Veres (Article)
Stephanie Kelton, Associate Professor of Economics at the University of Missouri/Kansas City, believes that the root of our deficit problems can be found in a fundamental misunderstanding ? shared by Democrats, Republicans and mainstream voters alike ? about the government?s balance sheet. She argues, plausibly, that the whole idea that we should control the deficit at all is costing our nation trillions of dollars in lost output. The result is lost income, savings, wealth and prosperity.
2013-10-29 00:00:00 Seven Resources to Make You a Better Writer by Megan Elliott (Article)
Whether youre crafting client emails, blog posts or market commentaries, you want your writing to be read, understood and (if youre lucky) enjoyed by your intended audience. If youre looking for inspiration, encouragement or just some basic writing tips, check out these resources.
2013-10-22 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors expectations about the future.
2013-10-22 00:00:00 Recession-Proof Your Marketing by Kristen Luke (Article)
The choices you make and actions you take today will influence how your business fares following the next market crash. Here are two marketing strategies you can implement now to prepare for the future.
2013-10-17 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
Last month, a Wells Fargo/Gallup survey of non-retired investors showed just how lingering the hangover is from the financial crisis five years ago. Much like the Great Depression financially scared their great grandparents and grandparents, the Great Recession is impacting investors expectations about the future. 41% indicated they were concerned about another global crisis during their retirement years, and 28% were convinced they would have a lower standard of living during retirement.
2013-10-15 00:00:00 A Better Way to Measure Risk Tolerance by Joe Tomlinson (Article)
In building financial plans, asset-allocation recommendations must recognize the clients ability to absorb risk. To aid in this assessment, advisors often use risk-tolerance questionnaires, but these tools have shortcomings. The evolving field of brain science can help to design better questionnaires.
2013-10-08 00:00:00 When Your Succession Plan Is Derailed by Beverly Flaxington (Article)
I hired a young guy in three years ago with the expectation I would give him ownership and have him eventually take over the business. I want to wind down and have been giving him a large percentage of my clients to manage. Lately he has been talking about moving back to where his wifes parents live. He said he isnt sure if this business is right for him. How do I get him to make a decision?
2013-10-02 00:00:00 Handing Down Your Legacy - A Special Gift For Readers by Gary Halbert of Halbert Wealth Management
No one likes to talk about death. Many people put off planning for this contingency because its just not pleasant to think about. Additionally, most young people think that death is a long way off, so they have plenty of time to plan for it. But as we all know, accidents happen and no one knows exactly when their time will come.
2013-09-27 00:00:00 Achievement Awards Announced at the 2013 Insiders Forum Conference and Leadership Forum by Bob Veres (Article)
The first annual Insiders Forum conference attracted more than its share of industry leaders. But two of its more prominent attendees received special recognition for their contributions to the financial planning/investment advisory profession.
2013-09-24 00:00:00 Why Retirees Should Choose DIAs over SPIAs by Wade Pfau (Article)
Retirement portfolios can be constructed from a mix of asset classes, including stocks, bonds and annuities. In the past, I’ve shown that retirees achieve some of the best outcomes by allocating a portion of those assets to SPIAs. In this column, I extend my analysis to show that DIAs work even better than SPIAs, by providing more liquidity and better longevity protection at a lower cost.
2013-09-23 00:00:00 Enhanced Dividend for Income by Jim O'Shaugnessy of O'Shaughnessy Asset Management
It is axiomatic in the financial planning canon that investors searching for a steady source of income should rely heavily on bonds. Stocks are for capital appreciation and bonds for income. The practice is so ingrained, that I have not heard of many investors who would make the case for using an equity portfolio to generate income. Bonds also appeal to advisors because of their inherent principal protection advantage. As a bond owner, you are a creditor, not an owner.
2013-09-18 00:00:00 Newsletter September 2013 by Harold Evensky of Evensky & Katz
SAY IT ISNT SO... Investment News headline Ex-J.P. Morgan broker: Firm pushed house funds. The story went on to report: Claims reps didnt get commission on trades of outside funds. A former J.P. Morgan broker has filed an arbitration claim alleging that the banks securities unit encouraged sales of proprietary funds by withholding commissions from brokers on trades of outside funds.
2013-09-17 00:00:00 How One Advisor Attracts HNW Clients by Dan Richards (Article)
Recently, a California-based advisor explained how she shifted her practice to focus on affluent clients. Her success was the result of a simple but thoughtful five-step plan.
2013-09-10 00:00:00 A New Tool to Calculate Long-Term Care Needs by Joe Tomlinson (Article)
Health-care crises can destroy retirement plans, yet advisors and clients often avoid discussing long-term care (LTC) insurance. Part of the reason ? aside from a natural reluctance to contemplate such tragedies ? is the lack of data needed to evaluate the LTC risk. That data deficiency can now be overcome, thanks to a pioneering product that provides customized projections for clients.
2013-09-03 00:00:00 How a Menu of Services Generates Revenue by Teresa Riccobuono (Article)
Very few advisors do as good a job as possible articulating their value proposition and the ways they can be of service to their clients. If clients purchase products or services from competitors, it may be because they are unaware of the full range of your offerings.
2013-08-20 00:00:00 Target-Date Funds: Why Higher Equity Allocations Work by Joe Tomlinson (Article)
Following the 2008 financial crisis, target-date funds (TDFs) were criticized for exposing investors nearing retirement to excessive equity allocations. Were those criticisms justified? How well do TDFs stack up against the venerable strategy of matching one’s bond allocation to one’s age? My research has yielded surprising answers to those questions and to the proper role of single-premium immediate annuities (SPIAs) alongside TDFs.
2013-08-20 00:00:00 How to Evaluate Event Marketing by Kristen Luke (Article)
If your firm uses event marketing, then it is critical to evaluate the success of your efforts. I recommend asking attendees to fill out an evaluation form at the conclusion of each event. This feedback will help you make necessary tweaks to improve future events and collect valuable contact information from attendees. The following tips will help you create a useful event evaluation form.
2013-08-20 00:00:00 Letters to the Editor by Various (Article)
A reader responds to Bob Veres article, Envisioning the Planning Firm of the Future, which appeared last week. A reader responds to Dan Richards article, How to Fix the Flaws in Financial Planning, which appeared on July 30, and a reader responds to Bob Veres article, The Price You Pay for Poor Management, which appeared on July 23.
2013-08-13 00:00:00 Envisioning the Planning Firm of the Future by Bob Veres (Article)
Virtually all advisors operate with a value proposition built on bettering their clients financial future through management of their assets. But trends in the workforce and capital markets will force advisors to rethink those assumptions and, if Richie Lee is right, the planning firm of the future will adapt a four-factor service model that places much greater emphasis on helping clients maximize their human capital.
2013-07-30 00:00:00 The Power of Diversification and Safe Withdrawal Rates by Geoff Considine (Article)
When Bill Bengen published his seminal research in 1994, a 4% safe withdrawal rate (SWR) was clearly attainable with a variety of asset allocations. But bond yields are lower now than they were then, and equity returns for the next 20 years are unlikely to exceed those of the prior two decades. Indeed, a new paper by three highly respected researchers showed that SWRs for stock-bond portfolios are well below 4%. But as I will demonstrate, a 4% SWR is still possible with a more diversified portfolio ? and without subjecting clients to additional risk.
2013-07-30 00:00:00 How to Fix the Flaws in Financial Planning by Dan Richards (Article)
Four-in-five financial planning recommendations dont lead to action, according to a Forbes column. Our industry needs a fundamental reappraisal of how to create plans that translate into action and positive outcomes.
2013-07-30 00:00:00 Five Web Metrics Advisors Should Be Tracking by Kristen Luke (Article)
Do you look at your website analytics report and have no idea what it means? Don’t worry. Unless you are a professional web marketer, most of the data you see on those reports won’t impact your business in any significant way. But that doesn’t mean you should ignore your website statistics all together.
2013-07-23 00:00:00 The Price You Pay for Poor Management by Bob Veres (Article)
If you have 100 client meetings a year and could net an additional $65,000 to $70,000 out of them, how much effort would you be willing to put into achieving that?
2013-07-23 00:00:00 If Only Clients Came With Instruction Manuals by Teresa Riccobuono (Article)
If you never have had a client relationship start off strong and then fizzle out, congratulations. For those of you who have, read on. I am going to help you put together a client instruction manual.
2013-07-09 00:00:00 Retirement Portfolios: Fears over Rising Rates are Overblown by Joe Tomlinson (Article)
The second quarter saw increases in interest rates, losses in every category of bonds and investors abandoning fixed-income markets. The distress has been particularly acute among retirement investors who considered bond funds to be safe. But are fears of bond losses overblown? I will make the case that the rise in interest rates is actually good for retirement portfolios. To see this, one has to look beyond the quarterly statement losses and focus on overall retirement outcomes.
2013-07-09 00:00:00 Assessing Healthcare Expenses in Retirement by Dan McGrath, Paul Seidel and Josh Jackson, CAS, ALMI (Article)
In the wake of the Affordable Care Act and its accompanying deluge of regulation, advisors are helping baby boomers prepare for retirement in more ways than ever before. But our industry continues to overlook a significant threat to clients continued comfortable lifestyles: out-of-pocket healthcare costs.
2013-07-02 00:00:00 Insiders Forum Conference Names Advisor Perspectives Exclusive Media Partner by Advisor Perspectives (Article)
The Insiders Forum conference, to be held this year in Dallas, TX, September 17-19, has announced an exclusive media partnership with Advisor Perspectives.
2013-06-25 00:00:00 Strategies for the Retirement Red Zone by Joe Tomlinson (Article)
The retirement red zone is the critical years immediately before and after retirement, when financial plans are highly vulnerable to adverse market movements. In many previous articles, I have examined strategies to reduce risk after retirement, but here I will focus on the decade before retirement. Ill compare strategies that rely on traditional stock-bond portfolios with those using various types of annuity products.
2013-06-25 00:00:00 The Price Your Clients Pay for Using Safe Withdrawal Rates by David B. Loeper (Article)
Safe-withdrawal rates (SWRs) are perhaps the most extensively studied topic in financial planning literature. But applying a single SWR-driven methodology to all clients neglects their unique and individual needs. A better approach is for advisors to assist clients in defining their ideal and acceptable goals and the relative priorities among them. Then they can demonstrate through Monte Carlo simulation the likelihood of the recommended plan becoming over- or under-funded relative to those goals.
2013-06-25 00:00:00 Letters to the Editor by Various (Article)
Adam Apt responds in the latest exchange of letters on the topic of socially responsible investing. A reader responds to Geoff Considines article, A Better Alternative to Cap-Weighted Bond Indices, which appeared June 11. A reader responds to Wade Pfaus article, Retirement Income Designations ? Which Should You Choose?, which appeared last week.
2013-06-18 00:00:00 Retirement Income Designations ? Which Should You Choose? by Wade Pfau (Article)
With more than 50 certification programs based on the withdrawal phase of the planning lifecycle, advisors are faced with a paralyzing choice about which designation provides the most valuable curriculum. Here’s some guidance on choosing the right program for advisors.
2013-06-18 00:00:00 What Advisors Need to Know about Health-Care Planning by Dinesh Sharma (Article)
Guiding clients through the maze of the health-care choices retirees face is a way advisors can provide meaningful value. Here’s an overview of the Medicare and Medicaid programs to help advisors understand the key economic considerations that will impact their clients.
2013-06-18 00:00:00 Newsletter June 2013 by Harold Evensky of Evensky & Katz
Do you remember hiding under the sheets listening to radio when your parents thought you were asleep? If so, I have an unbelievable collection of all the old-time radio shows we listened to when we were kids, if you have about six months? spare time. Find your favorite, click on it, and it lists literally hundreds of episodes you can re-live.
2013-06-04 00:00:00 Your Value Proposition: A Precursor to the Elevator Pitch by Teresa Riccobuono (Article)
Every business should stand on four legs: values, a mission statement, a vision statement and a value proposition. This fourth item, a value proposition, must provide concrete data about your organization, why it exists and who you serve.
2013-05-21 00:00:00 Do Annuities Reduce Bequest Values? by Joe Tomlinson (Article)
The widely held view that annuities reduce bequest values is too narrow. Adjustments can be made in retirement portfolios to reduce retirement risk without sacrificing the value of ones bequest. Heres how retirees can purchase annuities, adjust allocations in remaining assets and achieve improved retirement outcomes.
2013-05-08 00:00:00 Is Your Investing One Dimensional? by Jerry Wagner of Flexible Plan Investments
At the National Association of Active Investment Managers (NAAIM) Uncommon Knowledge Conference in Denver last week, a reporter from Financial Planning magazine asked us, What is active investing? Many confuse the phrase with the simple act of running a mutual fund populated with stock picks within the strict guidelines of a prospectus, as opposed to running an index fund, where the manager simply buys and holds the shares making up a particular stock or bond index.
2013-05-07 00:00:00 Breakaway Brokers: What the Data Really Say by Bob Veres (Article)
For the past 15 years, and especially since 2008, few assumptions have been accepted as widely or confidently in the financial services world as the idea that brokers are leaving the wirehouse environment in increasing numbers ? and taking their clients with them. Underlying that assumption is another: that the trend is accelerating, and will continue to do so until the brokerage industrys retail footprint has been severely diminished. The more extreme projections see the entire brokerage asset gatherer/sales model following Lehman, E. F. Hutton and Bear Stearns into extinction.
2013-04-30 00:00:00 The Best Solution for Protecting Retirement Portfolios: Put and Call Options versus GLWBs by Joe Tomlinson (Article)
Retirees cannot be exposed to severe ? or even modest ? market losses. They need to protect their savings in a cost-effective manner. I will compare the projected outcomes for two types of strategies: options, which can reduce volatility, and products that guarantee lifetime income, such as variable annuities with guaranteed lifetime withdrawal benefits.
2013-04-30 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
With the passage of the American Taxpayer Relief Act of 2012, a lot of people felt that things were set as it related to estate taxes. Apparently everyone believed that except the President, who has proposed several changes to estate tax law in his fiscal 2014 budget.
2013-04-23 00:00:00 Create Mission and Vision Statements That Drive Your Business by Teresa Riccobuono (Article)
We often hear that advisors should create mission and vision statements for their businesses. I agree, but with one caveat.
2013-04-09 00:00:00 Four Bold Innovations that will Revolutionize Financial Planning by Bob Veres (Article)
What it would be like for an advisor in the 1980s to be magically transported to our 21st century? The changes would be dazzling: the Internet and social media, exchange-traded funds and Morningstar data, Skype conferences and the virtual cloud, plus a few million mobile device apps that do everything but vacuum your house.
2013-04-09 00:00:00 Tips for Building a Compelling Web Site by Wendy Cook (Article)
Is your current website still living in the “online brochure” days or even non-existent? Don’t dwell on what’s been holding you up. Let’s move your site ? and you along with it ? into the 21st century.
2013-04-09 00:00:00 The Big Lie of COI Referrals by Beverly Flaxington (Article)
Several weeks ago I responded to an advisors question about increasing center-of-influence (COI) referrals. The advisor was frustrated that seemingly good relationships with COIs were not translating into more referrals. I received a response to that column from Scott Johnson, director of sales and marketing for My Perfect Client, a provider of training programs for financial advisors. Scott shared some interesting insights about his approach to COI referrals and I thought readers could benefit from these ideas.
2013-04-01 00:00:00 Plan Sponsors and Participants Need HELP by Jon Vogler of Invesco
The Senate Committee on Health, Education, Labor & Pensions (HELP Committee) held a hearing titled Pension Savings: Are Workers Saving Enough for Retirement? on Jan. 31, 2013. Witnesses shared successful initiatives and highlighted areas that need improvement to help workers achieve a financially secure retirement.
2013-03-27 00:00:00 RISE Survey Reveals Some Somber Retirement Realities by Team of Franklin Templeton Investments
As numbers go, 1% and 99% have gotten more than their fair share of media attention, but if youre one of the millions who hope to retire someday, you may want to pay attention to another figure: 21%. According to the 2013 Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey, thats the percentage of retirees who have no savings to speak of. So how do you avoid falling into this statistical group? Thats the $64,000 question thats worth much more than thatits the price of your future.
2013-03-26 00:00:00 How to Invest Like Buffett by Robert Huebscher (Article)
Listen to Jim Cramer or his cohorts on CNBC and you’ll hear statements like, “Don’t settle for the mediocre returns of a market index!” and “It’s not that hard for investors to pick stocks that will beat the market!” Unless you possess the skills of Warren Buffett, that’s not true. But in the book Think, Act and Invest Like Warren Buffett, Larry Swedroe says you indeed can invest like Buffett ? just not by stock-picking.
2013-03-22 00:00:00 Happy Clients; Terrified Prospects by David Edwards of Heron Financial Group
Four years ago, on March 9th, 2009, US stocks collapsed to a 12 year low. A financial crisis rooted in overleveraged purchases of junk (or even fraudulent) securities claimed, in quick succession, Bear Stearns, Lehman Brother, Merrill Lynch (forced into a shotgun marriage with Bank of America) and AIG. Investors panicked, selling good securities at deep discounts to fair value.
2013-03-19 00:00:00 How My Firm Hires Great Employees by Teresa Riccobuono (Article)
Adding a team member is a big decision. If you are thinking the time is right to add to your roster, here are a few things to consider.
2013-03-14 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
In the latest edition of his client newsletter, Harold Evensky highlights a number of interesting bits of news, including a must-see destination for your friends, your kids and your grandkids, some advice from Warren Buffett, a tip from Albert Einstein and the latest data on hedge fund performance.
2013-03-12 00:00:00 Client Communication beyond the Newsletter by Beverly Flaxington (Article)
You have written about the importance of communicating with clients in a variety of ways. What are some examples of things that work best, other than the standard newsletter?
2013-03-05 00:00:00 Breaking Free from the Safe Withdrawal Rate Paradigm: Extending the Efficient Frontier for Retiremen by Wade Pfau (Article)
The traditional safe withdrawal rate approach that relies on a portfolio of only stocks and bonds produces among the worst possible outcomes for meeting spending needs and preserving financial assets for other uses. My research demonstrates there is a better approach.
2013-03-05 00:00:00 You?re The Cream of the Crop: Key Findings from the 2012 Advisor Perspectives Reader Survey by Jeff Briskin (Article)
Experienced. Results oriented. Focused on serving the needs of individuals and families. Confident in your abilities. Eager to expand your knowledge. If this sounds like you, you're not alone. These are the traits that stand out among Advisor Perspectives readers, based on the findings of our 2012 Reader Survey.
2013-02-26 00:00:00 Can Advisors Add Value Through Fund Selection? by Joe Tomlinson (Article)
Low-cost index funds will beat the average actively managed fund after expenses. But can advisors identify superior active funds to overcome this disadvantage? Advisors who believe they can choose those funds will be challenged by the results of two studies from the defined-contribution industry.
2013-02-12 00:00:00 Staying Active on Social Media: Ten Ways to Generate Relevant Content on a Frequent Basis by Kristen Luke (Article)
One of the most difficult aspects of social media marketing for financial advisors is staying active. For advisors who already have a hectic schedule, how do you generate relevant content and maintain an active presence? Here are 10 tips to help you get started.
2013-02-12 00:00:00 Manage Your Time More Effectively with a Model Week by Teresa Riccobuono (Article)
We cannot manage time. The clock keeps ticking whether we want it to or not. What we can manage is our activity. Instead of time management, think activity management.
2013-02-12 00:00:00 Can a Salesperson Help ? or Hurt? by Beverly Flaxington (Article)
I just hired a successful sales guy. He has been in the industry for 15 years and knows what to do. Our advisors will not allow him access to their clients; they prevent him from attending meetings and are generally usurping his role. How do I get him integrated into our practice?
2013-02-05 00:00:00 Comparing Advisors to Jim Cramer: Measuring your Professional Alpha by Bob Veres (Article)
Jim Cramer, Suze Orman and other so-called investment pundits and gurus are constantly telling consumers that they can do a great job of managing their portfolios on their own. Let's look at what the research has to say about the various investment performance benefits that advisors should be able to give their clients during the accumulation phase of their lives ? excess returns above what do-it-yourself investors could obtain on their own. I call those excess returns 'professional alpha.'
2013-01-29 00:00:00 Predicting Asset Class Returns: Recommendations for Financial Planners by Joe Tomlinson (Article)
Developing reasonable estimates for stock and bond returns requires more than just historical data or the assumptions provided in financial software packages. Inappropriate assumptions can doom retirees to outliving their savings or forgoing a life style they could otherwise afford. There are better ways to forecast, and in this article I'll suggest a few of them.
2013-01-29 00:00:00 Are Planners Worth the Fees they Charge? by Wade Pfau (Article)
Could financial advisors who offer comprehensive services be doing a better job? Two recent studies shed a positive light on the potential of the financial planning profession to do right by their clients.
2013-01-15 00:00:00 Demographics and the Decline of Equity Mutual Funds by Paul Franchi (Article)
Until the last few years, mutual fund flows followed performance. Recently, however, money has flowed disproportionately into bond funds and out of US equity funds despite a strong rally in the equity markets. Changing demographics explain this shift, which has important implications for advisors and the mutual fund industry.
2013-01-15 00:00:00 Five Key Marketing Trends for Advisors in 2013 by Kristen Luke (Article)
It is a new year and time to experiment with fresh marketing ideas. Keeping up with trends isn't just a way to tell your colleagues you are on the cutting edge of marketing. You need to understand how consumers are changing and how you can keep your message delivery relevant. If your marketing is getting stale, here are five marketing trends for 2013.
2013-01-04 00:00:00 Newsletter by Harold Evensky of Evensky & Katz
As always I hope you will enjoy this issue, as much as I have enjoyed putting it together. Most important though I wish one and all a very happy, prosperous and healthy new year!
2013-01-02 00:00:00 Getting the Most from Your Investment Committee by Bob Veres (Article)
Investment committees are a little bit like fingerprints: they come in all shapes and sizes, and no two are exactly alike in form or function. So advisory firms that have investment committees ? or are considering creating one ? can learn a lot from one another. My research has identified some best practices for this flexible management tool, by comparing notes among advisors on how they are managing their IC teams.
2012-12-26 00:00:00 The Ten Key Benefits of Investment Committees by Bob Veres (Article)
In this first part of a two-part report, I'll identify ten core purposes that investment committees serve in different types of firms, ranking them in order of the number of responses I received. If your investment committee is serving all ten purposes, based on the survey, you're among a select minority - which means that many advisors may find new ways to use this versatile new tool in their RIA practices.
2012-12-18 00:00:00 Comparing Long-Term Care Alternatives by Joe Tomlinson (Article)
Should clients buy expensive long-term care insurance they might never need, or go without insurance and risk a big hit to their life savings? For advisors whose clients face this critical dilemma, there's now a third option: life insurance and annuity products that also incorporate long-term care insurance.
2012-11-21 00:00:00 Meet Cliff by Rob Isbitts of Sungarden Investment Research
Oh, we had heard about Cliff. We were warned about this nefarious character many months ago. We knew he was lurking and we knew he was not going to just go away. Cliff had invited himself into our lives, and unless we dealt with him, he was not going anywhere. You, the hard-working financial advisor, have probably been wondering when everyone else would notice him. That time came when the sun came up Wednesday after the election. There he was, casting his extraordinarily long and potentially costly shadow. Fiscal Cliff finally entered the national spotlight. It is time to meet him.
2012-11-20 00:00:00 Are Inflation-Adjusted Annuities Right for Clients? The Product and Its Prospects by Joe Tomlinson (Article)
Many economists and retirement experts favor inflation-adjusted SPIAs, but advisors and the investing public have never shared their enthusiasm. Detractors contend that the product is fundamentally flawed and will never gain broad acceptance. My own view is more optimistic, but significant obstacles will, nonetheless, continue to impede wider adoption.
2012-11-20 00:00:00 Letters to the Editor by Various (Article)
Readers respond to our articles, The Downside to Socially Responsible Investing, which appeared last week, and, Lacy Hunt on Our Economic Future, which appeared on November 6.
2012-11-20 00:00:00 The Fallacies in Today?s Retirement Plan Assumptions: Putting the Hedonic Pleasure Index to Work by Bob Veres (Article)
Are you dramatically underestimating your clients' retirement lifestyle expenditures when you use Monte Carlo software? If you stop and look at a number of important assumptions hidden in the current models, you'll suddenly have a lot less confidence in the retirement plans you?re mapping out for your clients.
2012-11-07 00:00:00 Tax Implications of the Election by Timothy Steffen of Robert W. Baird & Co.
While the re-election of President Obama gives us a sense of what direction the country may head regarding tax policies, addressing the deficit and how to respond to the looming fiscal cliff, there is still a lot of work to be done before any of those issues can be considered "resolved".
2012-11-06 00:00:00 Asset Location: Nine Tips to Create ?Tax Alpha? by Glenn Frank (Article)
With campaign season finally over, taxes are going to dominate the debate in Washington in the months ahead ? however things shake out at the polls today. It's going to be confusing; it's going to be uncertain. But many of the most critical questions advisors will ask can be answered with an analytical approach to deciding where to 'house' assets ? in taxable or tax-sheltered accounts.
2012-10-30 00:00:00 Letter to the Editor by Various (Article)
A reader responds to a discussion from last week, which was in response to Joe Tomlinson's article, We Need a Bold Solution to Fix the Retirement System, which appeared on October 9.
2012-10-25 00:00:00 October 2012 Newsletter by Harold Evensky of Evensky & Katz Wealth Management
Oh the joys of driving to a baseball game; sitting in endless traffic four miles from the stadium, inching past full lot after full lot, or not finding your car when it's time to go home (was it D-4 or 404 Green?). Now you can streamline your parking experience with ParkWhiz, a Chicago-based company that's recently gone national. This and other missives from Harold Evensky.
2012-10-23 00:00:00 How to Change the Regulatory Debate - Before it's Too Late by Bob Veres (Article)
After almost a decade of lobbying, arguing, and posturing, the long fight on Capitol Hill over who will regulate RIAs and how to define 'fiduciary' is approaching a close. Within the next six months, there will no longer be any real excuse to put off a decision, and new players, both in Congress and at the SEC, will be eager to start fresh.
2012-10-23 00:00:00 Letter to the Editor by Various (Article)
A reader responds to Joe Tomlinson's article, We Need a Bold Solution to Fix the Retirement System, which appeared on October 9.
2012-10-09 00:00:00 We Need a Bold Solution to Fix the Retirement System by Joe Tomlinson (Article)
Our retirement system is broken. The average American isn't saving enough to comfortably retire, and the fault lies in our reliance on defined-contribution (DC) plans, such as 401(k)s. Tinkering with DC plans won't solve the problem, and the other extreme - a federally mandated guarantee - isn't likely to gain support. But a number of compromises that lie between those approaches offer a better way forward for future generations.
2012-09-28 00:00:00 Commodity Stocks: Improving Returns With No Extra Volatility by Frank Holmes of U.S. Global Investors
Not every investment is the same. Even within the commodities space, when looking at measures such as correlation, performance and risk, two indexes can have very different effects on a portfolios results.
2012-09-04 00:00:00 New Research - How to Help Clients Make Better Decisions by Joe Tomlinson (Article)
Making decisions is not something human beings are very good at. We do a poor job of predicting what will make us happy in the future, we often misjudge our ability to handle risk, and our decisions are plagued by subtle biases that throw us unwittingly off course. Because the essence of financial planning is making decisions about the future, it's critical that clients and advisors understand how decision-making biases can be identified and overcome.
2012-08-28 00:00:00 Why Don't Your Female Clients Like You? by Kathleen Burns Kingsbury (Article)
Over the next 40 years, women will inherit 70% of the $41 trillion in intergenerational wealth transfers, and the first thing they will probably do after receiving the money is fire you. The reasons are not what you think: not poor investment performance, not lack of expertise.
2012-08-21 00:00:00 The Profession's Faulty Assumptions: A Top Ten List by Bob Veres (Article)
In the financial planning profession, we make a lot of assumptions about the world in order to run spreadsheet models, retirement projections and sufficiency analyses, and generally determine how much a client should save and invest for the future. But many of the industry-standard inputs into our models are (how can I say this delicately?) garbage. Here are my top ten garbage inputs, with an explanation of how we might possibly improve on them.
2012-08-14 00:00:00 How Safe are Annuities? by Joe Tomlinson (Article)
For many advisors, the possibility that insurance companies will run into financial difficulties makes recommending annuities a nonstarter. But annuities are the best way to mitigate longevity risk, which may pose a greater danger, and advisors can take steps to help protect clients from insurers' financial problems.
2012-08-07 00:00:00 Letter to the Editor by Various (Article)
A reader responds to Bob Veres' article, The Alternative to AUM-Based Fees: The Total Profitability Retainer Formula , which was published last week.
2012-07-31 00:00:00 The Alternative to AUM-Based Fees: The Total Profitability Retainer Formula by Bob Veres (Article)
Many - perhaps most - advisors are overcharging a few of their clients and undercharging the rest. In other words, a small number of investment advisor clients are subsidizing the services that the others are receiving. Here's a way to address that.
2012-07-24 00:00:00 Optimal Strategies for Secular Market Cycles by Michael Kitces (Article)
With alternative investments and active management strategies growing ever more popular, an advisor recently told me, 'It's just a fad and will end with heartache as all investment fads do. I've watched it play out over and over during my 30-year career.' But I am not persuaded. The secular market cycle today is different from the bear market 30 years ago, and not all market cycles favor the same investment strategies.
2012-07-22 00:00:00 How 5 Seriously Overworked Buzzwords Can Come Between You and Your Client by Rob Isbitts of Sungarden Investment Research
In my experience, several investing buzzwords have done more harm than good for investors. While they are important concepts, they have been so commoditized by the financial planning industry that their true meaning has been misinterpreted. All the while, Wall Street firms have reaped the benefits by mass-customizing portfolio management. What started as a concerted effort to help investors has been reduced to a marketing pitch and investors keep falling for it.
2012-07-17 00:00:00 Should You Wait to Buy a SPIA? by Joe Tomlinson (Article)
Advisors may be reluctant to recommend single-premium immediate annuities (SPIAs) with interest rates currently so low. It may be better to wait for rates to rise, which will bring more attractive SPIA pricing. But that leaves the question about how long we will wait for better pricing. In this article, I'll show how the decision to delay can turn out well or poorly, depending on the timing and size of rate increases.
2012-07-17 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
President Obamas Affordable Care Act was deemed constitutional by the Supreme Court. This means that unless something happens between now and the end of the year, on January 1st, taxes will go up for certain taxpayers: A 3.8% Medicare contribution tax for single taxpayers making more than $200,000, and married couples filing jointly making more than $250,000. Interest, dividends, rents, and capital gains on these groups will see an additional 0.9% Medicare tax applied to income.
2012-07-10 00:00:00 Why Are Advisory Fees Lower Than They Have To Be? by Bob Veres (Article)
How much should you charge for your services? Is there any way to objectively calculate a fair price? Doctors, lawyers and accountants all charge relatively similar prices for their services. Why does the financial planning profession have fees that are all over the map?
2012-07-03 00:00:00 The Value of Planning by Bob Veres (Article)
How much do you charge for your services? When you look hard at the value you provide, the answer may be: 'not enough.'
2012-06-29 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
Much has been said and written about the expiration of the Bush tax cuts at the end of 2012. The assumption is that capital gain rates will go back to 20% and that dividends will rise to 39.6% without consideration of the Obama Care surtaxes. Since tax law would revert to what it was before the Bush tax cuts, we would revert to a special provision in the Taxpayer Relief Act of 1997 that established a preferential 18% capital gains rate.
2012-06-19 00:00:00 Retirement Floors and Implications for Evensky's Cash-Reserve Strategy by Wade Pfau (Article)
Does sensible retirement planning call for funding basic needs with less volatile assets and investing more aggressively for aspirational goals? Or, with client goals clearly defined and prioritized, does sensible planning call for a total returns approach? Multiple schools of thought have emerged, but there is not yet any consensus about what constitutes a proper retirement income floor. These lingering unresolved disagreements reinforce the benefits of Harold Evensky?s and Deena Katz? popular strategy.
2012-06-12 00:00:00 Investing for Retirement: SPIAs, TIPS, Stocks and the 4% Rule by Joe Tomlinson (Article)
Relying only on stocks and bonds to fund a decumulation strategy may no longer be feasible, given today's low interest rate environment and the prospect of muted returns from the equities market. Investors should instead consider using single-premium immediate annuities (SPIAs) to fund at least a portion of retirement needs.
2012-06-12 00:00:00 The Problems with Trying to Benchmark Unconstrained Portfolios by Ken Solow (Article)
Benchmarking unconstrained, 'go-anywhere' managers is difficult. Common methods to determine an appropriate benchmark - such as an ex-post regression of how the fund was invested - can obscure the actions of the manager. Is the only solution to simply select an arbitrary benchmark and proceed accordingly?
2012-06-05 00:00:00 What Mark Zuckerberg Can (Still) Teach You by Dan Richards (Article)
As CEO, Mark Zuckerberg did many things right. But one particular aspect of his approach was critical to Facebook's success - and advisors can learn from it.
2012-05-08 00:00:00 Annuities versus Systematic Withdrawals: Understanding Tax Effects by Joe Tomlinson (Article)
Given the complexity of most annuities, analysis of them typically only considers pre-tax results. But taxes matter. As we will see, tax impacts vary by the specific type of annuity you're considering, and will make the difference between annuities being cost effective or a drain on cash flow.
2012-05-01 00:00:00 The Asymmetric Value of Delaying Social Security Benefits by Michael Kitces (Article)
Despite a compelling body of research arguing that most retirees would benefit by delaying the onset of Social Security payments, the majority who are eligible still elect to begin receiving them as early as possible. But delaying Social Security benefits is one of the best triple-hedges available to any retiree - simultaneously protecting against poor returns, high inflation, and longevity.
2012-04-27 00:00:00 ECRI Weekly Leading Indicator: The Growth Index Slips Again by Doug Short of Advisor Perspectives (dshort.com)
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) is now at 0.6 as reported in today's public release of the data through April 20. This is the second consecutive week-over-week decline since January 6th. However, the underlying WLI rose fractionally from an adjusted 123.8 to 124.1.
2012-04-20 00:00:00 ECRI Weekly Leading Indicator: The Growth Index Slip by Doug Short of Advisor Perspectives (dshort.com)
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) is now at 1.2 as reported in today's public release of the data through April 13. This is the first week-over-week decline since January 6th, over three months ago. The underlying WLI contracted more dramatically from an adjusted 125.9 to 123.9 (see the fourth chart below). This is the largest decline, in percentage terms, since August 19th of last year.
2012-04-17 00:00:00 Rethinking Safe Withdrawal Rates: The Meaning of Failure by Wade Pfau (Article)
Merely knowing the probability that an investor's wealth will be depleted at some point is not enough to build a retirement strategy. That is the traditional measure of failure in safe withdrawal studies, and it's time to move beyond it.
2012-04-12 00:00:00 Volatility Is Not Risk by Chuck Carnevale of F.A.S.T. Graphs
Rogers blog dealt with his feelings about a recurring theme in Barrons over the weekend referencing peoples complacency for risk. The first part of his writing dealt with the risks associated with the utilization of puts. On this subject, Roger and I are in agreement. However, the second part of his blog talked about what he felt was the great risk of using dividend paying equities as an alternative investment choice. The following analysis utilizing the F.A.S.T. Graphs earnings and price correlated research tool illuminates the important parts that I feel Roger left out.
2012-04-05 00:00:00 NewsLetter - April 2012 by Harold Evensky of Evensky & Katz
Although we continue to believe in the tenets of Modern Portfolio Theory, the concept is Buy-and-Manage not Buy-and-Forget. As a consequence, we made numerous adjustments to our strategic allocations over the years. And, consistent with our buy-and-manage philosophy, for the last few years weve been studying investment markets and have come to believe that long-term future returns are likely to be even lower then we estimated in 2002, market risk will be higher and the benefits from diversification less (i.e., correlations will be higher).
2012-03-22 00:00:00 Explaining the Stir over Recent Fed-Speak by Team of American Century Investments
The official statement from the Federal Reserves March 13 interest rate policy committee meeting was relatively ho-hum (no significant changes from Januarys statement), but other recent Fed communications have raised more of a stir. In particular, we explain what fiscal cliff and sterilized QE mean, and help put them into context. Its all part of a mixed, uncertain economic outlook in which slower mid-year growth, like last year, cant be ruled out, but higher inflation by next year is also a possibility.
2012-03-20 00:00:00 Hot Buttons that Motivate Prospects by Dan Richards (Article)
If you spend $12,000 to promote an event for prospects, you should expect results. That didn't happen for an advisor whose recent prospecting events failed. Here's how he could have created a successful event - by focusing on the hot buttons that motivate prospects.
2012-03-13 00:00:00 How Do Spending Needs Evolve During Retirement? by Wade Pfau (Article)
Most people's spending patterns change over the course of retirement - expenses look very different at 90 than they do at 65. Yet most research on retirement withdrawal rates relies on constant inflation-adjusted withdrawals to develop a client's forward-looking budget. Such an unrealistic, one-size-fits-all approach can be disastrous if a client inadvertently retires with insufficient savings. Is there a better way?
2012-03-13 00:00:00 Letter to the Editor - Tactical Asset Allocation v. Behavioral Finance by Various (Article)
Ken Solow, Michael Kitces and Sauro Locatelli respond to Christopher Sidoni's article, The Conflict between Tactical Asset Allocation and Behavioral Finance, which appeared on February 21.
2012-03-06 00:00:00 New Tools to Manage Longevity Risk by Joe Tomlinson (Article)
If you could guarantee yourself an inflation-protected stream of income for the rest of your life, would you take it? For many retirees, the answer is yes, and that is rightfully sparking new interest in deferred-income annuities (DIAs). By combining a DIA with a TIPS ladder or more aggressive equity-centric investments, retirees can obtain inflation-protected lifetime income. But they will face important tradeoffs, as I will explain.
2012-02-28 00:00:00 Letters to the Editor by Various (Article)
Readers respond to Christopher Sidoni's article, The Conflict between Tactical Asset Allocation and Behavioral Finance, which appeared last week, and to Simon Johnson's commentary, Too Big to Jail, which appeared on February 21.
2012-02-21 00:00:00 The Conflict between Tactical Asset Allocation and Behavioral Finance by Christopher J. Sidoni, CFA, CFP (Article)
How?s this for irony? Certain investor behavior creates the conditions for a tactical asset allocation strategy to succeed ? but the same behavior simultaneously Increases the likelihood that clients will not follow the strategy. Recent research by Ken Solow, Michael Kitces and Sauro Locatelli identified a promising approach to tactical portfolio strategy, but our firm?s experience indicates clients will be reluctant to follow this approach ?particularly when the expected payoff is highest.
2012-02-14 00:00:00 The Safety-first, Goals-based Approach to Financial Planning by Wade Pfau (Article)
Little of what is taught in traditional investment textbooks is of value in personal financial planning. Risk is not standard deviation; it is the probability and consequences of not meeting one's goals. That real-world perspective animates a new book by Zvi Bodie and Rachelle Taqqu that implores advisors and their clients to lock in the funding of their essential expenses before worrying about their discretionary goals.
2012-02-07 00:00:00 An Innovative Solution to Retirement Income by Joe Tomlinson (Article)
Generating lifetime income is the ultimate goal of retirement planning. Why is it, then, that two of the most compelling mechanisms for doing just that are shunned by the investing public, despite overwhelming support from experts? I'm talking about immediate annuities and delayed claiming of Social Security, both of which are remarkably effective at securing retirement needs.
2012-02-07 00:00:00 Jeremy Siegel, Rob Arnott and Other Experts Forecast Equity Returns by Laurence B. Siegel (Article)
A forecast of the equity risk premium (ERP) tells you how much to save, how to allocate assets between equities and fixed income, and how much you can consume. Given its great importance, the CFA Institute recently convened a group of top-level academics and practitioners to forecast future ERPs - and to reflect on similar predictions they had made a decade ago.
2012-02-01 00:00:00 Will I be able to retire ever? Answers to our clients #1 question! by David Edwards of Heron Financial Group
Our clients are divided between those who are at least 65 and already retired (30%) and those clients aged 35-65 for whom retirement seems like an ever receding mirage. In this commentary, we will concentrate on the mechanism that we use to implement a clients retirement income strategy, review how this strategy has performed since January 2000, and review the lessons learned.
2012-01-24 00:00:00 New Tools to Help Clients with Retirement Decisions by Joe Tomlinson (Article)
Our clients face a range of financial planning issues, and the arrival of retirement typically involves making numerous decisions. Here is a set of tools that provide useful information to professionals who work with clients on the verge of retirement - especially financial advisors, accountants and lawyers.
2012-01-17 00:00:00 Income Annuities versus GLWBs: A Product Comparison by Joe Tomlinson (Article)
The variable annuity with a guaranteed lifetime withdrawal benefit (VA/GLWB) has become the most popular form of annuity, as retirees seek income protection and equity-market participation. But VA/GLWBs are often costly, and the typical purchaser has few tools with which to assess the costs. Investors need a straightforward way to gauge the fees for VA/GLWBs versus other retirement income alternatives.
2012-01-10 00:00:00 Safe Withdrawal Rates: A Do-It-Yourself Approach by Wade Pfau (Article)
Reconciling the assumptions that underpin safe withdrawal rate studies with one's own capital market expectations and constraints is a daunting task, since those studies rarely reflect the practical realities of an advisory practice. But new research now provides a generalized framework for determining a safe withdrawal rate for a given retirement duration, acceptable failure probability, asset allocation and capital market expectations. Advisors no longer must be constrained by the assumptions and choices of others.
2012-01-04 00:00:00 ProVise Bullets by Team of ProVise Management Group
The year 2012 is upon us and looms large for a number of different reasons. Within the next few days, the first of the Presidential primaries will begin and by early November we will know who our next President is and who controls Congress, along with many State Houses. Some astrologists believe this is the Age of Aquarius and according to the Mayan calendar, December 21st will be the end of time, or as some prefer to think of it (ourselves included) the beginning of a new age. Maybe the astrologists and Mayans have something going.
2011-12-27 00:00:00 The Ten Best Articles You Probably Missed by Robert Huebscher (Article)
Great articles don't always get the readership they deserve. Here are 10 articles that you might have missed, but I believe merit reading.
2011-12-27 00:00:00 Letters to the Editor by Various (Article)
Readers respond to three recent articles and commentaries: Wade Pfau's article, GLWBs: Retiree Protection or Money Illusion?, which appeared on December 13; PIMCO's commentary, Hot Potato, which appeared on December 21; and Kay Conheady's commentary, Does the Trend Matter?, which appeared on December 20.
2011-12-20 00:00:00 Wall Street Journal: Three Words of Advice for Million-Dollar Producers by Dan Richards (Article)
The financial advisor careers section of Wall Street Journal asked 60 advisors from all over the U.S. for suggestions to new advisors starting in the business whose goals were to be million-dollar producers. Their advice came down to three words.
2011-12-20 00:00:00 Does the Trend Matter? by Kay Conheady of Apropos Financial Planning
More research into making asset allocation decisions based on the trend of the P/E10 ratio might prove worthwhile. Such future research might include statistical significance testing, calculating up and down trend Sortino ratios, measuring the Sharpe and Sortino ratios for tactically allocated stock+bond portfolios and studying how trend-sensitive asset allocation strategies would have fared in the past. Finally, Kitces recent JFP article also suggests that studying the P/E5 ratio may also have some value.
2011-12-13 00:00:00 Has Financial Planning Made Itself Appealing Only To Risk Takers? by Michael Kitces (Article)
Financial planning advice may be so equity-centric, that people who don't want equity-style investment risk forgo the use of a financial planner altogether, as a recent Journal of Personal Finance article revealed.
2011-11-22 00:00:00 A Bond-Based Financial Planning Framework by Stan and Hildy Richelson (Article)
Plain vanilla bonds have proven themselves to be the best investments available, and we wholeheartedly agree with Andrew Mellon's prescient late-1920s observation that 'gentlemen prefer bonds.' We believe that ladies should, too.
2011-11-15 00:00:00 Are TIPS Really Safe and Worry-Free? by Wade Pfau (Article)
The Fed's aggressive monetary easing has many investors considering TIPS as a cornerstone of their retirement strategy. While TIPS' unique ability to protect against CPI-based inflation is undeniable, many investors neglect to consider the risks they pose, particularly for those who have not yet reached retirement.
2011-11-08 00:00:00 An International Perspective on Safe Withdrawal Rates by Wade Pfau (Article)
Prospective retirees must consider whether they are comfortable basing retirement decisions on the impressive but perhaps anomalous numbers found in historical US data. What has been safe for US retirees in the past has been far less secure for their foreign counterparts.
2011-11-08 00:00:00 Is One Better than Three? by Dave Loeper, CIMA, CIMC (Article)
One way to 'juice' a portfolio is by increasing allocations to small- and mid-caps, as one recently published paper contends. But a careful analysis - properly adjusting for risk - shows how that seemingly appealing approach can destroy client wealth.
2011-11-01 00:00:00 A Better Way to do Financial Planning by Robert Huebscher (Article)
Simplicity is dangerous when it comes to financial planning. Easy-to-use tools that project your retirement savings based on minimal inputs such as your income and savings rate amount to a ?bait-and-switch,? according to Larry Kotlikoff, a Boston University professor of economics. To properly prepare for retirement, one should focus on maintaining a constant standard of living throughout their life ? what economists call consumption smoothing.
2011-11-01 00:00:00 Regulatory Armageddon by Bob Veres (Article)
Suppose you were somehow able to convince 40 advisors, who are all well-known thought leaders in the profession, to gather in the same room for a six-hour brainstorming session. The goal: to identify the single most important thing that the financial planning profession should be thinking about now. What do you think they'd come up with? Fasten your seat belts, because this may be the most important report you'll read all year.
2011-10-18 00:00:00 How to Fix Our Dysfunctional Tax Code by Robert Huebscher (Article)
Give an economist a clean slate, unencumbered by political ideology or allegiance, and charge him or her with designing an ideal tax system. What emerges will look nothing like the dysfunctional personal and corporate tax codes now administered by the IRS. Instead, it could resemble Larry Kotlikoff's 'purple tax plan,' one of five economic reform plans he designed to appeal to both Democrats and Republicans alike.
2011-10-14 00:00:00 ProVise Bullets by Team of ProVise Management Group
Low interest rates have certainly hurt savers, even more so those who live on a fixed income. The current bubble in bonds will eventually pop, and many people will be surprised. But this ProVise Bullet is not about the risk in bonds today. Its more about the fact there is some good news as it relates to interest rates. First, mortgage rates are near an all-time low. A 30 year mortgage loan is available at an interest rate slightly above 4% and 15 year mortgage loans have been quoted at just a little under 3.57%. Even the IRS is getting into the act.
2011-10-13 00:00:00 Boomer Demographics: The Shift Ahead by Doug Short of Advisor Perspectives (dshort.com)
I looked at developments in U.S. demographics from 1980 to the present with a focus on the Boomer bulge. Then I examined current day demographics for several major countries around the globe. I've developed a set of population pyramids for the U.S. that start with 1981 and span7 decades at 10-year intervals using the U.S. Census Bureau data. Let's look at some comparative numbers for these seven snapshots. I've calculated the Elderly Dependency Ratios for each. As this ratio shifts higher, the productive population is increasingly burdened by the cost of entitlement programs.
2011-10-07 00:00:00 Rewriting the 4% Rule by Kevin Feldman of iShares Blog
Is there a safer and simpler way to plan retirement distributions? If youve saved more than you need for retirement and can live on 3% plus an inflation adjustment each year, you have the past century of data on your side suggesting that your nest egg will not outlast you. For most of us though, this is an unrealistic drawdown rate, so you will likely need some professional financial planning help to map out a withdrawal plan that meets your retirement goals. Like all rules that try to simplify complex questions, 4% is just thata number, which may or may not be your number.
2011-09-27 00:00:00 Top 10 Websites for Financial Advisors by Various (Article)
In a recent survey conducted in partnership with Cerulli Associates, we asked our audience to list the sources they frequent for investment commentary and content on a regular basis. Here is a list of the top ten.
2011-09-06 00:00:00 Predictably Incorrect by Bob Veres (Article)
I had to read through this commentary by behavioral economics researcher Dan Ariely twice before I was willing to draw the obvious conclusion. It's the biggest bunch of hooey I've ever read in the financial planning press.
2011-09-01 00:00:00 ProVise Bullets by Team of ProVise Management Group
In the widely anticipated comments from Federal Reserve Chairman Ben Bernanke at Jackson Hole, WY, he acknowledged that, for a number of reasons, the recession was deeper than originally thought. The recovery has been more modest than he would like, notwithstanding the fact that we have had nine months of economic growth since the recession ended, albeit anemic growth. Unfortunately, the media focused on more of the negative parts of his comments. Fortunately, investors heard optimism. Why did investors see something different than the media?
2011-08-23 00:00:00 The Simplest, Safest Withdrawal Strategy by Robert Huebscher (Article)
Few financial planning topics have garnered as much attention as safe withdrawal rates, but a key question remains unanswered: Can retirees sustain a 4% withdrawal rate with minimal risk? With the recent introduction of 30-year TIPS, the answer is now yes.
2011-08-15 00:00:00 Are We There Yet? The Value Restoration Project Resumes by JJ Abodeely of Sitka Pacific Capital Management
The declines in the stock market over the last three weeks have done a lot of damage to most investors portfolios. This would merely be an inconvenience if it meant that future returns could be expected to be robust enough to compensate for the losses. Investors in the stock market may rightly be viewing this recent decline of about 12% over the last 16 trading days as a painful, but necessary, correction in prices which will once again bring value back to the market.
2011-08-09 00:00:00 America's Tarnished Credit Rating by Bob Veres (Article)
In this letter designed to be sent to clients, Bob Veres explains the impact of S&P's downgrade of the US sovereign debt rating.
2011-08-02 00:00:00 ProVise Bullets by Team of ProVise Management Group
Recently, the Tax Court affirmed a tax deduction a family had taken for the 24 hour supervision needed for an elderly family member. Caregivers were hired-even though they were not licensed healthcare providers-and the family took a tax deduction for the cost of these caregivers. The IRS denied the deduction, but the Tax Court affirmed it. The Court went further by stating that the costs of maintenance and personal care services could qualify as a medical expense if a healthcare professional certifies that at least two of the six activities of daily living cannot be done without assistance.
2011-07-19 00:00:00 Sorting Out the Annuity Puzzle by Joseph A. Tomlinson (Article)
Why do so few people buy annuities? Economic theory would predict robust demand for this financial product, especially as the workforce ages, but the reality is quite the reverse. Most efforts to explain this have focused on buyer behavior. But to better understand the annuity puzzle, we need to study the sellers.
2011-07-19 00:00:00 Retirement Planning and Worst-Case Scenarios by Wade Pfau (Article)
New research suggests that skepticism in a 4% safe withdrawal rate (SWR) is well justified. It is perhaps due to good luck that American retirees have not yet experienced a withdrawal rate below 4%. But a better approach than worrying about SWRs is to focus on the savings rate needed to meet your retirement spending goals, not on what the safe withdrawal rate is.
2011-07-12 00:00:00 Harold Evensky on the New Rules for Wealth Management by Robert Huebscher (Article)
If you don't have a copy of The New Wealth Management on your bookshelf, you should. From gauging the risk tolerance of your clients to measuring the performance of their portfolios, this book provides comprehensive guidance for virtually every aspect of a financial advisory practice. Harold Evensky, the lead author, spoke with me last week and highlighted some key themes in the newly released second edition.
2011-07-08 00:00:00 Golub Group Quarterly Commentary by Michael Golub of The Golub Group
What does it take to achieve a secure retirement? We all have many goals, financial and otherwise, but securing a comfortable retirement is one we all share. It doesn?t matter if we are in our twenties and just beginning our professional lives or if we have already been enjoying retirement for 20 years. What does matter is, have you defined what is important to you, what you will need, what you want it to look like? Have you done a thorough assessment of your current situation and what you?re doing to improve it? The time to start thinking, planning, and acting on this is NOW.
2011-06-28 00:00:00 How to Get in Front of High-net Worth Prospects by Dan Richards (Article)
Last week, I got a call from an advisor who used a simple idea to set up meetings with three $2 million prospects. This advisor used some research from one of my recent columns to jumpstart conversations about critical issues for the wealthy.
2011-06-07 00:00:00 Letters to the Editor - Equity-Indexed Annuities by Various (Article)
A number of readers responded to Robert Huebscher's article, Fantasy-world Returns for Equity Indexed Annuities, which appeared last week.
2011-05-31 00:00:00 Fantasy-world Returns for Equity Indexed Annuities by Robert Huebscher (Article)
When research fails to meet the basic standards of academic rigor, its conclusions should be questioned. One such case is a recent paper, Real-World Index Annuity Returns, whose conclusions you should trust at your own risk.
2011-05-25 00:00:00 Making Sense of Gold by Frank Wei of FundQuest
After being neglected, gold has been on a spectacular run since the beginning of the new century. As compared to the struggling stock market of the past decade, the run looks even more impressive. Meanwhile, with its popularity as an investment on the rise, many investment vehicles such as gold ETFs have been created and introduced to the investor public. Formerly dealt with by central banks and large institutional investors exclusively, gold is now more available as an investment for average retail investors. The following commentary will examine several key aspects of gold as an investment.
2011-04-26 00:00:00 How to Take Advantage of the CFP Awareness Campaign by Kristen Luke (Article)
If you are a CFP, you will be directly affected by the Let's Make a Plan campaign, even if you take a passive role. Those who take a more active role can use the toolkit provided by the CFP Board to promote themselves in local markets. Here's what's entailed and what you can personally do to take advantage of the campaign.
2011-04-20 00:00:00 Understanding Your Capital by Doug Short of Doug Short
For many years financial planners embraced the image of a three-legged stool to explain sources of retirement income: Social Security, Pensions, Personal Savings. Of course, as we all know, for most people the stool now has only two legs, making it a rather wobbly support. Over the past few decades, private pensions have essentially disappeared. They may still be available for government and some union employees, but pensions in the world of private business are generally available only to a shrinking number of older workers who were grandfathered into a now closed system.
2011-03-22 00:00:00 Japan Update by Bob Veres (Article)
This letter, suitable for sending to clients, explains the consequences of the tragedy in Japan and how investors should gauge its economic impact.
2011-03-18 00:00:00 The Southern Classic IRC, A Reason for Ben Graham to Smile & Can Share Prices Diverge from Value? by Kendall J. Anderson of Anderson Griggs
The belief that share prices can at times diverge from underlying business value is the driving force behind security analysis as practiced by active investment managers. My example is not to lay out a case to buy or sell shares of IBM. Instead, it is to look at the value the market has placed on IBM over many years and let you decide if the price has diverged from the value of IBM as a business. To be fair, and to honor the many professional investors and students of investing who do not believe in active management, I at least need to give you their beliefs.
2011-03-01 00:00:00 Understanding Variable Annuities with GMWBs by Robert Huebscher (Article)
It's very tempting: a variable annuity with minimum lifetime payout that can increase - but never decrease - based on market performance. That temptation comes in the form of an increasingly popular variable annuity rider known as a guaranteed minimum withdrawal benefit. We explain the flaws in a widely publicized study by Morningstar/Ibbotson, and provide our own analysis of the product.
2011-03-01 00:00:00 The Real Flaws ? A response to 'Understanding Variable Annuities with GMWBs' by Peng Chen (Article)
Peng Chen challenges our analysis of variable annuities with guaranteed minimum withdrawal benefits.
2011-02-22 00:00:00 Toward an Understanding of Risk - Part 2 by Robert Huebscher (Article)
How should clients think about risk in their portfolios? Advisor Perspectives put that question to a cross-section of prominent advisors and academics. Their answers encompassed diverse opinions and underscored how crucial that question is to the investment process. In part one of this series, which appeared last week, we heard from seven practitioners in the financial planning community. This week, we hear from seven well-known academics, including two Nobel Prize winners.
2011-02-15 00:00:00 Toward an Understanding of Risk by Robert Huebscher (Article)
How should clients think about risk in their portfolios? Advisor Perspectives put that question to a cross-section of prominent advisors and academics. Their answers encompassed diverse opinions and underscored how crucial that question is to the investment process.
2011-02-15 00:00:00 David Laibson on the Hidden Challenges of Aging Clients by Dan Richards (Article)
In this interview, Harvard economist David Laibson discusses his research into the challenges of helping elderly clients with their financial planning. He also discusses how to overcome the procrastination and laziness that often result in inferior investment decisions. This is a transcript of the interview.
2011-02-15 00:00:00 David Laibson on the Hidden Challenges of Aging Clients - Videos by Dan Richards (Article)
In this interview, Harvard economist David Laibson discusses his research into the challenges of helping elderly clients with their financial planning. He also discusses how to overcome the procrastination and laziness that often result in inferior investment decisions. This is a video of the interview.
2011-01-24 00:00:00 Weapons of Mass Poverty by Mark Elliott of Elliott Asset Management
Modern financial management dogmas may be fundamentally, terminally, and irreparably flawed ? and may be key ingredients in modern asset bubbles. I believe what could be the most serious catastrophe to face retirees and other investors since The Great Depression may be currently underway and, as in past recent financial catastrophes, most investors and financial ?professionals? will fail to act ? despite what appears to be clear writing on the wall.
2011-01-11 00:00:00 Tactical Asset Allocation and Market Timing: What's the Difference? by Nancy Opiela (Article)
Why is it that the industry dismisses significant changes to portfolio allocations as "market timing" transactions but embraces the subtler "tactical shifts" many advisors are making in the current, transitional market? As advisors debate the nuances of that question, the more relevant question may be: How would you respond if a client asked you to explain the difference between market timing and tactical asset allocation?
2010-12-14 00:00:00 What the Music Business Taught Me about Selling by Justin Locke (Article)
You provide a service to each of your clients, some of whom may have similar needs but all of whom are unique. Asking your clients what more you could be doing for them is the only way to make sure you're offering the advice they truly want.
2010-11-30 00:00:00 QE2: Beware the Perils of its Success by Vitaliy Katsenelson (Article)
QE2 is like a drug prescription that comes with a list of side effects that are often worse than the disease it was supposed to cure. It is difficult to know the unintended consequences of QE2, but it may result in a substantial decline in the dollar, stagflation, lower economic growth and much higher interest rates.
2010-11-16 00:00:00 A Reading List for 2010: Part 2 by Vitaliy Katsenelson (Article)
Updated for 2010 and in time for the holidays, here is the latest installment of my recommended books. I originally wrote this list in 2008 and again last year. I intend to keep adding to and revising it every year. It contains seven sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, Risk and Books for the Soul. The first three sections were presented last week and the remaining four are presented here.
2010-11-12 00:00:00 Analyzing China's Banking Sector Reform by Richard Gao of Matthews Asia
China's banking reform has effectively transformed its state-owned banks into commercial banks running under international practices.
2010-11-09 00:00:00 A Reading List for 2010 by Vitaliy Katsenelson (Article)
Updated for 2010 and in time for the holidays, here is the latest installment of my recommended books. I originally wrote this list in 2008 and again last year. I intend to keep adding to and revising it every year. It contains seven sections: Selling, Think Like an Investor, Behavioral Investing, Economics, Stock Market History, Risk and Books for the Soul. The first three sections are presented below and the remaining four will be presented next week.
2010-11-09 00:00:00 The Most Neglected Marketing Principle by Kristen Luke (Article)
Often, advisors lack a strategy for following up with prospects if they are not immediately interested in hiring your firm. As the authors of a recent book state, "81% of sales that close, close on or after the fifth contact." It is imperative that you integrate a follow-up strategy in your marketing plan.
2010-10-26 00:00:00 Hope is Not a Strategy by John West of Research Affiliates
Most pension funds and 401(k) calculators assume total returns in the 7-8 percent range. Is this assumption realistic, however, with a mature economy saddled with unprecedented debt levels and an aging workforce? This commentary examines retirement plan assumptions and calculates that we can reach this return level only if we assume top quartile results for stocks, bonds, and alternatives over the next 10 years. That's like expecting a decade of sunshine in the markets.
2010-10-19 00:00:00 Developed Markets and Capitalism in Crisis by Robert Huebscher (Article)
We are not in a globalized world today, according to Ian Bremmer. "The state is back," said the 40-year old president and founder of Eurasia Group, a political consulting firm. Both in the U.S. and throughout the world, governments are exerting their influence through regulation, trade restriction, subsidies, and bailouts, and are threatening the nature of free markets.
2010-10-19 00:00:00 Bernanke's Impossible Dilemma by Robert Huebscher (Article)
David Wessel, economics editor of the Wall Street Journal, examines the challenge Ben Bernanke faces. His goal is to provide full employment and price stability. Yet he faces a slowly growing economy, unemployment close to 10%, consumers deleveraging and spending frugally, renewed fears of banking system instability, and the threat of an asset bubble is growing somewhere in the markets. Monetary and fiscal policy options have been seemingly exhausted, and the public is losing confidence in all aspects of government.
2010-10-12 00:00:00 Does Your Marketing Match Your Business Structure? by Kristen Luke (Article)
Marketing strategies differ depending on the structure of a firm, writes Kristen Luke. Solos and silos focus on marketing the individual advisor while ensembles market the firm. Ensembles also tend to have more sophisticated marketing campaigns since they generally have larger marketing budgets and higher revenue streams.
2010-10-12 00:00:00 The Perfect Storm: Threat or Opportunity by Dinesh Sharma and Michelle Goldstein (Article)
Our primary client base, baby-boomers, is quickly sliding into retirement, leaving us to question where our growth will come from. And now we have the uncertainty surrounding the Dodd-Frank Wall Street Reform and Consumer Protection Act and the anxiety that comes with it. Financial advisors can choose to see the convergence of these factors as a threat to their well-being or as an opportunity to prosper.
2010-10-01 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
A variety of topics are discussed, including market performance during September, the competition to be recognized as the top-rated college, Larry Summers' resignation, and the reaction to France's proposed austerity plan.
2010-09-28 00:00:00 Unraveling the 12b-1 Debate by Robert Huebscher (Article)
The SEC has proposed sweeping changes to the way commission-based advisors will be compensated for the services they provide. Those changes will rename and modify the 12b-1 fees that many mutual funds now charge. To understand their impact, we spoke with Avi Nachmany of NY-based Strategic Insight, whose clients include the largest mutual funds.
2010-09-27 00:00:00 Want People to Save? Force Them by Dan Ariely of Predictably Irrational
Institutionally, Chile has cracked an age-old problem with annuities. By law, 11 percent of every Chilean employee's salary is automatically transferred into a retirement account. When employees retire, their savings are converted into annuities. By pooling risk, the Chilean government makes annuities an attractive business with more competition and better prices. And since everyone is forced to annuitize, the adverse selection problem that normally afflicts insurance providers simply disappears.
2010-09-14 00:00:00 What the Taylor Rule Says about Interest Rates by Charlie Curnow (Article)
The Taylor Rule, a widely cited forecasting tool, predicts that the current inflation rate of 1.2 percent and the unemployment rate of 9.6 percent will keep the target federal funds rate in the range of -3.5 to -4.5 percent. We report on a presentation last week by an official at the Boston Federal Reserve Bank.
2010-08-31 00:00:00 Double ?Bubble,? Toil and Trouble by Sam Bass (Article)
The latest economic prophecy, which has gripped investors' fears for the past three years and counting, is that a 'bubble' in US Treasury bonds is about to burst. Hyperinflation is just around the corner, the prediction goes, and US Treasury bonds, driven up in price to record levels by unprecedented policy measures, are about to crash. In this guest contribution, Sam Bass writes that advisors shouldn't follow the advice of these "seers."
2010-08-24 00:00:00 What Investors Really Want by Robert Huebscher (Article)
Using a mean-variance optimizer to construct a retirement portfolio that sits on the efficient frontier is tantamount to dining on a well-prepared meal that was pureed in a blender, believes Meir Statman, a professor of finance at Santa Clara University. Statman's research focuses on behavioral finance, and how advisors can help investors make smarter decisions.
2010-08-17 00:00:00 A Proven Path to Gaining Client Assets by Dan Richards (Article)
When Dan Richards talks to successful advisors about their business objectives, for most increasing assets is at the top of their list. Some advisors mistakenly believe, though, that winning a greater share of assets from existing clients is driven by performance.
2010-08-10 00:00:00 Zvi Bodie on Stocks and Annuities in Retirement by Dan Richards (Article)
In this interview, retirement expert Zvi Bodie discusses the role of stocks and annuities in a retirement portfolio, and how advisors and clients should think about risk. This is the transcript of the interview.
2010-07-30 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
The two most important aspects of the financial reform bill: (1) Congress told the SEC to come up with rules for a common version for a standard of care when providing personalized investment advice to individuals; making everyone (financial planners, stockbrokers, insurance agents, etc.) who provide these types of services do so with a fiduciary standard of care; (2) a mandate from Congress to the GAO to do a six month study about the regulation of financial planning as a distinct business. Recent data on retirement readiness is summarized and several other topics are covered.
2010-07-20 00:00:00 A Marketing Guide for RIAs: Part 5 ? Become an Expert by Kristen Luke (Article)
In her series on low-budget marketing for startup RIA firms, Kristen Luke discusses how to become an expert in your market niche.
2010-07-13 00:00:00 A Marketing Guide for RIAs: Part 3 ? Build a Website by Kristen Luke (Article)
Kristen Luke discusses the steps to take to build your website.
2010-07-09 00:00:00 July 2010 Newsletter by Harold Evensky of Evensky & Katz
Evensky & Katz president Harold Evensky doesn't know about you, but he's getting tired of living in interesting times. Unfortunately the market gods don't much care for his opinion. So, given the reality that the markets have been a tad exciting lately, in addition to his regular meandering tidbits, he's included a number of items that he thought might provide a little perspective on the ranting of the financial talking heads.
2010-06-29 00:00:00 Timber as an Asset Class: If a Tree Falls in the Forest, Should you Buy It? by Charlie Curnow (Article)
"If the sun shines and it rains, the trees grow about on schedule," wrote Jeremy Grantham, chairman of Boston-based investment firm GMO, in his quarterly newsletter in April 2007. Grantham's enthusiasm for timber, which remains true to this day, may be excessive, despite the fact that, on the surface, historical data seems to support his optimism. If a tree falls in the forest, should you buy it?
2010-06-22 00:00:00 Inexpensive Protection Against Rising Rates by Geoff Considine, Ph.D. (Article)
As is too often the case, the biggest risks are those that we discount. The possibility of a surge in interest rates appears to be today's ignored risk, despite the warnings of many experts, including David Einhorn, Bill Gross, and Seth Klarman. We discuss an inexpensive strategy to protect your portfolios from the tail risk of rising rates.
2010-05-11 00:00:00 Talking to Clients about Expected Returns by Dan Richards (Article)
Of all the assumptions that go into clients' retirement plans, none has a bigger impact than the expected return on their investments, says Dan Richards. That number determines how much investors need to save, when they can afford to retire and the kind of lifestyle they can anticipate. Richards provides a context for discussing expected returns with clients.
2010-04-28 00:00:00 Fiduciary Responsibility vs. Fiduciary Duty by Michael J. Schussele of Michael J. Schussele, CPA
While the campaign to establish a fiduciary standard is commendable in that it could establish fiduciary responsibility for advisors, the fiduciary standard is not the same as professional fiduciary duty. Fiduciary responsibility assumes unavoidable conflicts of interest, while professional fiduciary duty does not tolerate any conflicts of interest at all. It is time to clearly delineate who is who, to have salesmen and advisory salesmen regulated by the SEC and FINRA, and to have true fee-only professional advisors regulated by an independent Consumer Financial Protection Agency.
2010-04-27 00:00:00 The Four Horsemen of Growth: David Kelly?s Guide to Markets by Katie Southwick (Article)
With unprecedented volatility now largely behind us, J.P. Morgan's Chief Investment Strategist David Kelly believes that the economy is entering a period of recovery. To move forward, we must abandon our negative mindsets and focus on opportunities for expansion.
2010-03-23 00:00:00 The Best Books on Passive Investing by Indudeep Chhachhi & Edward R. Wolfe (Article)
Two finance professors, Edward Wolfe and Indu Chhachhi, survey the literature on passive investing and offer their recommendations for authors and books. Whichever side of the active-passive debate you take, these books should be required reading. The evolution through which the literature on passive investing has gone is striking. Early writers started out with a point to prove: that passive investing is the only way to invest that makes sense. Today, the writing in this area has moved beyond "proving a point" to expanding on what is a settled issue.
2010-03-16 00:00:00 The New Investment Paradigm: Graham Meets Markowitz by Bob Veres (Article)
Broadly speaking, the financial services industry has been divided into two competing paradigms since roughly 1950. One, articulated by Harry Markowitz, suggests advisors add value through diversified portfolios optimized along the efficient frontier. The other, advocated by Benjamin Graham, says advisors add value by purchasing assets at prices less than their fair value. Bob Veres reconciles those views and describes the New Paradigm that has emerged.
2010-02-09 00:00:00 6 Ways to Make the Most of your Web Site by Nancy Opiela (Article)
Whether your web site is an online brochure to attract prospects or tool to enhance client communication, small changes can generate big returns. Even if your site already has the right look and feel, here are six ways it can still be improved.
2010-02-09 00:00:00 Transforming Your Business with an Integrated Solution by Marie Swift (Article)
Marie Swift evaluates the various systems and processes that are kicked-off at a typical firm from one of the most common client interactions - an inbound call. Many firms work with disparate software systems and utilize far too many manual tasks - resulting in duplicate data entry and poor customer service. Conversely, Marie evaluates this same scenario utilizing an integrated software and services solution, Tamarac Advisor 9, and finds dramatic gains in efficiency, accuracy and overall firm profitability. We thank Tamarac for their sponsorship.
2010-02-09 00:00:00 China?s Quest for a Shortcut to Greatness by Vitaliy Katsenelson (Article)
The Chinese economy must be getting out of control, because the Chinese government is doing the unthinkable: It is desperately trying to put the brakes on its economy. Author and fund manager Vitaliy Katsenelson looks back at how China got into this trouble and looks forward to China's prospects.
2010-02-02 00:00:00 Return Distributions and the Shiller P/E Ratio by Keith C. Goddard, CFA (Article)
Keith Goddard expands on ideas developed by Joe Tomlinson in a series of recent articles on the topic of the Shiller P/E Ratio as a predictor of future returns in the stock market. Specifically, this article looks at the distribution of three-year returns in the stock market following different starting points for the Shiller P/E ratio to illustrate that the historical distribution of rolling three-year returns in the stock market is not random.
2010-02-02 00:00:00 Who will Pay for the Burlington Acquisition? by Vitaliy Katsenelson (Article)
According to investment manager Vitaliy Katsenelson, Warren Buffett overpaid in Berkshire's acquisition of Burlington Northern. He states, "Though I agree with Buffett's assessment of the Kraft-Cadbury deal, I fear that investors and media are completely ignoring Berkshire's own, $30-billion-plus acquisition of a very cyclical, capital-intensive, not terrifically high-return-on-capital business - Burlington Northern."
2010-01-30 00:00:00 ProVise Bullets by Ray Ferrara of ProVise Management Group
This client-oriented letter comments on a number of financial planning topics: the benefits of marriage (men now benefit more than women), the rise in scams due to low interest rates, the implications of volatility and how individual investors should view the market, new proposals for 401(k) plans, and a few others.
2010-01-05 00:00:00 Another Sample End-of-Year Letter by Bob Veres (Article)
Bob Veres provides another of his sample end-of-year letters as part of the new client service he is introducing.
2009-12-29 00:00:00 End-of-Year Letter Templates by Bob Veres (Article)
Bob Veres is the editor and publisher of Inside Information, a publication focused on practice management and related issues for the financial planning profession. He just introduced a new monthly service, Client Articles, which will contain articles (and cartoons) that can be sent to clients, for example as part of your quarterly newsletters. He provides two sample letters.
2009-12-22 00:00:00 Six Words that Open the Door to Accountant Referrals by Dan Richards (Article)
Put together a list of the things that frustrate advisors targeting high-end clients and roadblocks to referrals from accountants are sure to be close to the top. Successful advisors recognize the power of a recommendation from a HNW prospect's most trusted advisor, and Dan Richards reveals the six words that facilitate those referrals.
2009-12-08 00:00:00 The 529 Dilemma by Mary Ann Lambert (Article)
The recent market decline coupled with, tax, custodial, management fees and estate planning issues make the decision to use a 529 plan less than straightforward. In this guest contribution, advisor Mary Ann Lambert briefly reviews the history of college savings plans and shows how the current landscape favors 529s for some clients but not for others.
2009-12-01 00:00:00 Ten Ways to Connect with Your Clients? Children by Nancy Opiela (Article)
When you work with a top client throughout his or her life, you have an opportunity to ensure that the client's family stays with your firm beyond the current generation. Financial legacies are often lost when wealth passes from generation to generation, so building intergenerational connections can ensure both a successful transfer of assets - and an advisory relationship that endures after your original client passes on.
2009-11-24 00:00:00 Tapping into Today?s Number One Client Concern by Dan Richards (Article)
Larry Porcelli, the head of the private client group for US fund giant BlackRock said that their research shows that 70% of Americans are willing to move their accounts if another firm or advisor offered expertise on constructing portfolios to avoid running out of money. Dan Richards identifies two things advisors need to do to capitalize on this opportunity.
2009-11-17 00:00:00 Our Steroidally Challenged Economy by Vitaliy Katsenelson (Article)
Vitaliy Katsenelson writes that the US economy is like a marathon runner who, after suffering an injury, takes steroids in order to return to racing. His performance is fine, but what don't see are the risks, just as our economy is now "steroidally challenged."
2009-11-03 00:00:00 I am a Fiduciary Financial Advisor by Ron A. Rhoades, J.D., CFP (Article)
The fiduciary standard of conduct is necessary to properly align investors' interests with those of the advisors who serve them, says Ron Rhoades in this guest contribution. Moreover, the fiduciary standard of conduct is not onerous and should not be feared. Advisors who embrace a fiduciary standard of conduct must simply follow the guidelines he sets forth.
2009-11-03 00:00:00 Alpha or Wealth? by Sam Bass (Article)
It is widely accepted that ETFs offer significant advantages over mutual funds, especially lower costs and taxes. But, as advisor Sam Bass argues in this guest contribution, the mutual fund industry may be all the more concerned that increasing numbers of investors are accepting the view that ETFs, and passive strategies in general, are better for wealth accumulation than active management - even if one assumes active strategies can generate positive alpha over extended periods of time.
2009-10-20 00:00:00 Life in and after the NBA Financial Planning for Professional Athletes by Robert Huebscher (Article)
During a 13-year career that began in 1987, Chris Dudley was called on to defend some of the greatest centers in NBA history - among them Shaquille O'Neal, Robert Parish, and David Robinson. While developing a reputation as an exceptional shot-blocker and rebounder, Dudley also devoted time to preparing for his post-basketball career - as a financial advisor - and he shares with us his thoughts about financial planning for the professional athlete.
2009-09-29 00:00:00 A Tale of Two Investors by Brian Murphy (Article)
Just as Dickens contrasted the fortunes and misfortunes in England and France in his classic novel, A Tale of Two Cities, today the divergence is painfully apparent in those who plan to accumulate wealth for their retirement and those who seek excess returns in their portfolios. In this guest contribution, advisor Brian Murphy tells the tale of two clients - one who aggressively sought alpha and the other who passively built retirement wealth.
2009-09-22 00:00:00 Three Ways to Market Your Business Using Facebook by Kristen Luke (Article)
Kristen Luke explains three ways advisors can promote their practice through Facebook: utilizing a basic personal profile, creating a business page and creating a group page.
2009-09-08 00:00:00 Advisor Survey Shows Best Ways to Business Growth by Michael Slemmer, CFA (Article)
Many investment advisory and wealth management firms have struggled to increase assets in the recent difficult markets. In order to understand how advisors feel they are faring - and the keys, and obstacles, to success - we partnered with Advisors Trusted Advisor to survey advisors on the state of their business-building efforts.
2009-09-01 00:00:00 Shiller P/E's and Predicting Returns by Joseph A. Tomlinson, FSA, CFP (Article)
It becomes clearer every day that the stock market does not follow a random walk and that there may be some predictability in long-term returns. But there's little agreement on how best to make such predictions. In this guest contribution, advisor Joe Tomlinson takes a look at using price/earnings ratios to predict future stock market performance.
2009-09-01 00:00:00 The Levers to Financial Freedom by Russ Thornton (Article)
Virtually the entire financial services industry is built upon spending vast amounts of time, money and other resources on things over which we have absolutely no control - like attempting to manage investment returns. In this guest contribution, advisor Russ Thornton shows that, by focusing on those things you can control, you as a financial planner can build better, more resilient plans for your clients.
2009-08-25 00:00:00 Building a Practice in America?s Fastest Dying City by Robert Huebscher (Article)
While many - perhaps most - advisors use client appreciation programs as part of their marketing efforts, Mo Young has embraced this idea and made it his sole marketing focus. Young's practice is based in Youngstown, Ohio - which has the distinction of losing population more rapidly than any other city in the US - yet Young has added several hundred new clients over the last four years with his strategy.
2009-08-18 00:00:00 A Crash Course in Investing Six Lessons from the Market Meltdown by Dougal Williams, CFA (Article)
The market decline from October 2007 to early March 2009 was the worst since the late 1930's. Stocks dropped 60%, investor uncertainty skyrocketed, and trust and confidence were shattered. The age-old rules for personal investing are now being questioned: Is Buy-and-Hold dead? Has Asset Allocation outlived its usefulness? Does Diversification still work? In this guest contribution, Dougal Williams provides answers to these questions that can serve as a guide for long-term investment success.
2009-08-11 00:00:00 What the New Normal Means for Asset Allocation by Geoff Considine, Ph.D. (Article)
Bill Gross of PIMCO forecasts a New Normal - slow economic growth, higher inflation, and increasing correlations among asset classes. If this view is correct, what should investors do? Geoff Considine examines the implications for asset allocation and financial planning by stress-testing some well-known asset allocations to see how well they will serve investors in the forecast environment.
2009-07-28 00:00:00 Moving Average: Holy Grail or Fairy Tale - Part 3 by Theodore Wang (Article)
Buy-and-hold remains deeply entrenched in the financial planning community, despite many of the flaws Ted Wong's previous articles have illustrated. Although many financial advisors suffer dearly from their buy-and-hold practices, they are reluctant to change their approach. Who dares to challenge investment sages like Bogle, Siegel, and Malkiel who emphatically support this long-standing investment principle? Academic research studies overwhelmingly endorse buy-and-hold. How can they all be wrong?
2009-07-28 00:00:00 Which Social Media Tool is Right for You? by Kristen Luke (Article)
Kristen Luke's philosophy is that the best marketing activities are the ones that are in line with the advisor's preferences and interests. Social media offers a rich array of tools - all you have to do is choose the one that best fits your personality and preferences.
2009-07-21 00:00:00 SIFMA?s Proposed by Ron Rhoades (Article)
On July 17, 2009, the Securities Industry and Financial Markets Association ("SIFMA") announced that its Private Client Group Steering Committee unanimously supports a new federal fiduciary standard for broker-dealers and investment advisors, embracing a proposal advanced by the Obama administration a week earlier in a draft of the "Investor Protection Act of 2009." Ron Rhoades looks at whether this shift in direction by SIFMA poses a radical change in business models, or whether the "new federal fiduciary standard" is something else in disguise.
2009-06-16 00:00:00 What Separates Great from Ordinary CRM Systems by Gary Kinghorn (Article)
In this guest contribution, Gary Kinghorn of AdviceAmerica says that effective CRM system must be centralized applications where all team members can view, share and update information, such as client tasks, documents, data and portfolios. This ensures everyone has current and accurate information at a glance.