Weekend Reading for Financial Planners Jan 11-12

15 Jan    Investing News

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the industry news that Envestnet is partnering with Dynasty Financial to create a new “Advisor Services Exchange” (ASx), and in the process is taking a small financial stake in Dynasty, raising questions of whether Envestnet is seeking to evolve beyond its technology core into a broader range of advisor services.

Also in the news this week was the announcement that former Congressman Chris Dodd and Barney Frank have filed an Amicus Brief against the SEC regarding Regulation Best Interest (Reg BI) claiming that as the ones who wrote the law itself the SEC misinterpreted the authority they were granted under Dodd-Frank to issue Reg BI (and that therefore the rule should be vacated), the governor of Massachusetts is advocating on behalf of the financial product manufacturers and broker-dealers that the state should consider walking back its fiduciary proposal, and a coalition of trade associations are coming together to make the case that Congress should allow financial advisors to claim the 20% Qualified Business Income (QBI) deduction in the future (though it’s not clear that Congress will take up any tax legislation this year!).

We also have several articles on practice management and succession planning, including: the benefits of deliberately hiring younger and less experienced (but potentially longer-tenured and more creative) advisors into a firm; the common reasons that Millennial advisors quit their advisory firms; how to better promote a culture of positive work/life balance to avoid burning out next-generation talent; the factors to consider (or not) when trying to select a future successor for the firm; and why the development of next-generation successor leaders in an advisory firm requires a fundamentally different set of talents than what the founder needed to learn to grow the business to that point in the first place.

We wrap up with three interesting articles, all around the theme of generalists versus specialists: the first explores how specialists have more opportunities to succeed but are also more prone to being disrupted and unable to adapt, such that it’s important to keep some ‘generalist’ interests as well; the second dives into research finding that generalists tend to be more successful in slow-moving environments while in an increasingly complex world it’s actually the specialists with the domain knowledge to spot opportunities in environments of rapid change; and the last introduces the concept of the ‘Generalized Specialist’, who develops a core competency of expertise but also tries to deliberately maintain a broader multi-disciplinary perspective as well (to be better able to both adapt and integrate new, disparate ideas).

Enjoy the ‘light’ reading!

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