Outside voices and views for advisers

Jul 2, 2015, 2:15 PM EST

How to explain alternatives' place in portfolios to your clients

By Thomas Hoops

Product proliferation. Endless streams of “innovation.” Our clients have readily understood hopes, dreams and objectives — and our industry responds by pumping out increasingly complex products at a dizzying pace. I subscribe to a service that outlines the most recently registered investment products. The emails come relentlessly, day after day — and they are not short reads!Unfortunately, this product firehose leads to more than just a logjam at the SEC — it can distract clients and financial advisers as they attempt, usually in vain, to keep up. Confident discourses on long-agreed-on investment principles can devolve into nervous tactical discussions about Product X's merits, or the appropriate allocation to a mysterious yet touted new asset class.Perhaps, like me, you believe more is not always better.(Related read: Want more time? Trim client investment options)How are we — seasoned professionals,... Read full post

Jul 1, 2015, 6:55 AM EST

Market reaction to Greece doesn't signal end of bull market

By Paul Schatz

With Monday's blog and Street$marts being on the long side, I decided to wait a day to offer commentary on how the markets' reaction to the impending default, bank closure, referendum, etc., in Greece would impact the new month and quarter.To reiterate an important market tenet of mine that has been around for decades, it's not what the news is, but how the markets react. We are constantly reminded of that with economic news. Is good news bad news for stocks? Is bad news good news? I have written for years of my personal belief that Greece should leave the eurozone. If Greece were the size of Spain or France, the conversation would be very different as those countries are too big to fail and almost too big to save. Greece's economic output and contribution to the euro is barely noticeable. Their political system, while democratic, leans heavily socialistic and even more so than most of their European counterparts. Greece has a culture... Read full post

Jul 1, 2015, 3:10 PM EST

The tax, estate and retirement planning ramifications of the Supreme Court's ruling on same-sex marriage

By Andrew Samalin

The Supreme Court's ruling in Obergefell v. Hodges means it is now unconstitutional for states to ban same-sex marriage. This ruling affords advisers an opportunity to review and update clients' financial and tax plans. The details are still being implemented, and it is likely that more guidance will be provided by the IRS, Social Security Administration and Labor Department. But here's a quick overview of the tax, retirement, Social Security and estate planning ramifications of the ruling.TAXESOne of the primary benefits of the ruling is a simplification of the number of returns needed for a same-sex married couple. Prior to the decision, a same-sex couple could file a federal return as married filing jointly, but would file either a single or head of household return if the state didn't recognize their marriage.Today, filing statuses would match, and as such, there is a consistency of computation and strategy. It would be important... Read full post

Jul 1, 2015, 3:05 PM EST

Should the Financial Planning Coalition support the DOL's fiduciary proposal?

By Don Trone

The Financial Planning Coalition issued a statement on June 17 that it intends to support the Labor Department re-proposed fiduciary definition. If so, it will not be acting in the best interests of financial planners.(Click here to read the Financial Planning Coalition's response)Six months ago, the White House Council of Economic Advisers released the results of academic research showing that retirement savers are losing $17 billion a year as a result of conflicted advice. The research was based on samplings of industry bad practices that were then extrapolated across the entire industry. The DOL is using this research to justify its re-proposed fiduciary definition.The Financial Planning Coalition should be defending financial planners and insisting that researchers take a sampling of industry best practices — specifically the practices associated with financial planning — and calculate the benefits that a retirement... Read full post

Jun 29, 2015, 7:31 AM EST

Advisers' crucial role in constructing smarter portfolios to combat volatility

By John Feyerer

A strengthening economy helped propel U.S. markets in 2014, continuing a bull market run that is now among the longest and strongest since the Great Depression. Despite this, today's market environment is fraught with uncertainty. Various macroeconomic factors including the recent U.S. dollar rally, the impact of oil prices on economic growth, divergent global monetary policies and the expectation for a tighter Fed policy, have all contributed to increased investor apprehension about where the markets can go from here. Many investors have reaped the benefits as the market has reached some of its highest highs and are optimistic this can continue, while others are wary that a potential stock market correction could be on the horizon. Regardless of the specific numbers, investors have historically had a tendency to let anxiety and fear dictate their investment decisions during times of any significant market volatility and, as a result, ... Read full post

Jun 29, 2015, 3:29 PM EST

We're grexhausted … leave the euro already

By Paul Schatz

If you weren't already exhausted by the constant stream of headlines regarding Greece's inability to meet its financial obligations, you should be now. After more than five years of negotiations, deals, posturing and extensions, the situation in Greece seems to be coming to a head. I hesitate to use the word “crisis” because unless you're living there and feeling the depressionary pain, this is really a fringe story. What I find interesting is that we are finally seeing all parties involved dig their heels in to play tough.This isn't another Lehman Brothers. I am not worried about contagion as with subprime mortgages in 2007. I don't fear counterparty risk as with AIG. Greece's creditors are at the top of the food chain, where bailouts aren't needed.I won't rehash the past five years, but I have written many times that Greece has actually been in default more than it has been current with its obligations over its long... Read full post

Jun 25, 2015, 2:49 PM EST

7 traits all successful team leaders share

By Steve Branham

As a successful financial adviser, you soon may find yourself leading a team, or adding more staff. Such responsibility comes with expectations that you'll be a good leader and an effective decision maker. While increased responsibility can be daunting — even overwhelming — there are actions that you can take to prepare yourself to perform well in your new role. Here are seven things you need to prepare to be a leader: 1. A personal ethos: You need to define this for yourself. It's an ancient Greek word that means the continuum of your behavior, core values and decision-making process. Great financial advisers have a well-defined ethos; there is an alignment, consistency and balance in how they work with clients, staff and team members. 2. Simplicity: Simple is preferable to complex when operating in a dynamic environment. Work to reduce complicated practices and procedures to their essential elements so that issues... Read full post

Jun 23, 2015, 6:58 AM EST

Why investing in local, SEO-driven adviser websites is the new priority

By Gary Liu

For years, companies have focused on optimizing their corporate websites to show off their brands. Fortune 500 companies spend billions of dollars each year on brand marketing and a lot of their digital traffic is driven toward company websites. According to a recent eMarketer report, digital ad spending in the U.S. will be nearly $60 billion this year, over $7 billion of which will be spent by companies in the financial services industry. But how effective is this corporate strategy in an industry where companies and firms are nearly entirely built on local relationships between advisers and clients? Advisers in local communities gain trust as they build their client base, and in doing so, also enhance the firm's brand. Advisers are essential brand advocates for your company, and in trust-based businesses like financial services, marketing teams need to invest in their local advisers to compete in today's highly competitive market.... Read full post

Jun 23, 2015, 4:59 PM EST

How to meet robo-advisers head on

By Frank Muller

Let's face it: robo-adviser technology is here to stay. As full-service financial advisers, we will have to ramp up our communication strategies and combine them with first-class services and distinctive products to ensure that we will not only survive, but also thrive, as automated platforms amass a greater market share in the coming years. And in no uncertain terms, it means beating the robots at their own game.So how do we accomplish that?Overcoming Behavioral EconomicsAccording to Daniel Kahneman, who won the Nobel Prize in 2002 for his work in behavioral economics, the fear of losing is more motivating than the pleasure of gaining, especially when it comes to investment decisions. So how does an advisory algorithm respond when market volatility rocks an investor's portfolio? The standard robo-adviser algorithm has been back tested through stressful periods of inevitable market volatility, such as the period from 2008–2009,... Read full post

Jun 23, 2015, 2:56 PM EST

Don't overlook your male clients

By Kathleen Burns Kingsbury

As an expert in women and wealth, I have grown tired of hearing how men are financial savvy and women are not. While some research supports the notion that some female clients are less confident when making financial decisions than their male counterparts, it cannot be inferred from the data that this makes men wiser. According to the 2014 report Harnessing the Power of the Purse, women in the United States are as financially literate as men. What happens to male clients when advisers assume based on their gender that they are knowledgeable and skilled in money management and investing? They get overlooked. That is ironic, as I usually use that word to describe how the industry treats female clients. However, men have their own challenges when it comes to money, and it is time to pay attention to them, too. Here are a few things to consider when working with men:'AS IF'1. Men are socialized to act “as if.” They ask fewer... Read full post

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