Weekend Reading for Financial Planners Feb 22-23

25 Feb    Investing News

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the big industry news that wirehouse Morgan Stanley is acquiring E*Trade for $13B, in a major shift for the wirehouse to move (back) towards the mass affluent with a more online digital offering via E*Trade, which opens a new pathway to E*Trade’s significant business of administering employer stock plans (that can now be referred to Morgan Stanley’s own advisors)… and that raises significant questions about whether E*Trade will even remain in the RIA custody business (and/or whether independent RIAs would want a custodian owned by a wirehouse competitor), and in turn, whether the potential loss of E*Trade as an RIA custody option could put even more pressure on the Department of Justice’s view of the prospective Schwab-Ameritrade merger (which may have even been a factor in Morgan Stanley’s timing to announce the E*Trade deal in the first place?).

Also in the news this week is a new FINRA exam sweep of how brokerage firms (including the ones serving as RIA custodians) plan to make their money in a zero-commission future and whether the prospective conflicts of interest in their alternative revenue streams are being sufficiently disclosed to clients (and their advisors), and the emerging surge in a new kind of “Registered Index-Linked Annuity” (the “RILA”) that is becoming an increasingly popular risk-managed variable annuity alternative to the living benefit riders of old.

From there, we have several practice management articles, including a review of the big themes from the recent T3 advisor tech conference (from more mobile apps and integrations to an outright focus on advisor time efficiency), the ongoing rise of virtual firms (from young advisors to more senior, small firms to large), and a fresh look at other ways to measure what constitutes a “good” advisory firm (beyond just rankings of their AUM and recent growth).

We also have a few investment-related articles, from a look at the new SOFR rate that is expected to replace LIBOR in two years (and the complications that loom between now and the end of 2021 for that transition to happen), the concerns of a recent proposal from the mutual fund industry to shift more of their disclosures to be online (instead of mailed or emailed out directly), and a candid look at whether direct indexing is really a threat to the ETF industry (or “just” a kind of alternative product for certain client needs… albeit one that might still soon become a trillion-dollar AUM opportunity?).

We wrap up with three interesting articles, all around the theme of better communications with clients: the first looks at what it takes to finally see clients who are difficult to schedule for meetings (recognizing that the real problem may be that the advisor’s ‘check-in’ meetings aren’t really actually all that valuable to the client and that a better purpose is often necessary!); the ways that advisors sometimes unwittingly damage their empathy with clients in an attempt to prove or defend their own professionalism; and some tips on how to have and get through the sometimes-difficult conversations with clients that arise (and how best to introduce a difficult conversation where there’s never a ‘good’ time to bring it up)!

Enjoy the ‘light’ reading!

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