Weekend Reading for Financial Planners Dec 14-15

17 Dec    Investing News

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the 2019 edition of Financial Planning magazine’s annual Tech Survey, showing the adoption leaders in each of the key advisor tech categories… and that despite all the hype, advisor use of “robo” tools remains not only tepid (at barely 11% of the advisor marketplace) but is actually declining as advisors predictably appear to be abandoning offering clients robo-only approaches and reverting back to their core (and more sustainably-priced) human-based financial advice services instead.

Also in the news this week is the release of the Investor Choice Act in the House that would end mandatory arbitration clauses amongst broker-dealers and RIAs, and a look at the recent Wells Fargo Advisors succession plan rollout that will pay retiring advisors as much as 225% of their trailing 12-month revenue (akin to a 2.25X multiple in the RIA marketplace) and facilitate next-generation advisors to buy those advisors out (but in turn more deeply binding those young advisors to the firm for the long run).

From there, we have several investment-related articles, including the latest Morningstar study on the behavior gap that finds the trailing 10-year gap has narrowed to ‘just’ 45 basis points in the US and has actually turned positive in the U.K. and Australia (though the narrowing/improvement may be driven in large part by rolling off the volatile years of the financial crisis and a 10-year sustained bull market), recent approvals to another 4 asset managers to offer non-transparent actively-managed ETFs (though it’s not clear if advisors will actually adopt them), and an emerging trend that the push for lower-cost ETFs may finally be bottoming out as a series of recent zero- or even negative-expense ETFs have failed to garner market share since their launches earlier this year.

We also have a few articles on practice management, including a recent YCharts study on advisor communication (finding that most clients still don’t think their advisors communicate frequently enough, or with enough personalization), the importance of regularly re-assessing an advisory firm’s pricing and business model (and that the fear that clients will leave if the fee model changes are overblown), and a look at how the majority of advisors find the process of selling a firm to be very anxiety-inducing (as they try to figure out whether the acquirer really has the right culture and people to take the firm forward).

We wrap up with three interesting articles, all around the theme of managing (and improving the outlook of) your own career: the first explores how “sales skills” are often the top-ranked ability that successful people cite for their success (whether it’s selling their services, or themselves, or their ideas, in the company/marketplace); the second looks at how it is increasingly acceptable to have a “resume gap” (whether due to taking time off to start a family, or to pursue new skills, careers, or even hobbies for a period of time); and the last examines how the best way to sustain and lift your own career is to try to develop your own personal brand that can give you (career) “pricing power” in the marketplace of job opportunities!

Enjoy the ‘light’ reading!

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