Outside voices and views for advisers

Oct 21, 2016, 1:44 PM EST

Knut Rostad: Trump adviser Anthony Scaramucci should apologize for DOL fiduciary rule remarks

By Knut Rostad

We reached out to Anthony Scaramucci on Wednesday and invited him to discuss his recent remarks regarding the DOL fiduciary rule in a webinar. At the time of this writing, we have not heard from him or his office, so can only conclude he has chosen to decline the invitation. The remarks of the Donald Trump adviser and SkyBridge Capital executive on the Labor Department's fiduciary rule are so at odds with the DOL rule, law, logic and basic human decency, they demand a rebuke. Equating established notions of fiduciary restraint with the deplorable institution of human bondage — suggesting that serving clients' best interest amounts to slavery — is beyond the pale.   The remarks were reported in InvestmentNews on Tuesday. Mr. Scaramucci asserted that the DOL “has made a decision to discriminate against a class of people who they deem to be adding no value … judging what should happen in a free market and... Read full post

Oct 20, 2016, 4:30 PM EST

Top reasons for independent advisers to consider a merger instead of an acquisition

By David Grau Sr.

Among the independent financial adviser community, merger and acquisition discussions tend to revolve purely around acquisitions. But mergers also represent a very useful strategic path.By merger, I am referring to the joining together of two or more previously separate entities into a single surviving company. The owner of the merged entity becomes part owner of the surviving entity and remains fully active in it for some years afterwards.We've found that there are four key questions advisers should ask themselves to determine whether pursuing a merger versus a standard buy-sell transaction makes the most sense:1) Can you truly build your succession plan around the younger advisers already in your practice? Sometimes the path to an internal succession plan is clear when a practice already contains one or more younger advisers with good business sense and a strong work ethic. But what happens if you don't have that option?(More:... Read full post

Oct 20, 2016, 4:28 PM EST

The DOL fiduciary rule: Deal catalyst or deal killer?

By Dan Seivert

As the wealth management industry slowly comes to terms with the pending implementation of the Department of Labor's best-interest rule, the industry conversation is now turning to the impact the rule will have on M&A activity.According to Echelon Partners' research and analysis, approximately $3.1 trillion of client assets representing $18.5 billion in revenue will be impacted at national and regional independent and full-service brokerage firms, bank broker-dealers, insurance broker-dealers and dually registered firms. The prohibited transaction revenue from these segments is estimated to be approximately 10% to 14% of current revenues, or roughly $2 billion to $2.5 billion.(More: In the wake of the DOL fiduciary rule, will adviser M&A surge?)While discount brokerages, robo-advisers and independent RIAs likely will benefit from this rule, the older, incumbent brokerage firms will be hurt in five ways:• Elimination of revenues... Read full post

Oct 19, 2016, 6:32 PM EST

Stars aligning for use of annuities in 401(k) plans

By Blaine F. Aikin

In recent years, policymakers have increasingly paid attention to annuities as one way to help investors solve the retirement puzzle. A recently released government report reviews the current barriers to annuities on the 401(k) plan menu and suggests that the Department of Labor could do more to make these oftentimes controversial lifetime income products available to plan participants.The report by the Government Accountability Office, which is the nonpartisan, auditing arm of Congress, was requested by Senator Elizabeth Warren (D-Mass.) and Rep. Bobby Scott (D-Virginia), the ranking member of the House committee that oversees pension regulation. It was completed in August and released publicly on Sept. 8.The thrust of the report is that only a quarter of all defined-contribution plans offer some form of annuity option for workers and that more plan sponsors would probably offer them except for concerns over fiduciary liability. In... Read full post

Oct 19, 2016, 2:55 PM EST

5 tips for winning debates with your clients

By Kol Birke

Most of us imagine that great communicators are born that way or that it would take a ton of work to improve. The truth is, since most people don't consciously work at getting better, we can quickly surpass our competition by simply practicing one or two new techniques. At the same time, we just might improve client outcomes and make our own lives easier. With that, and in the spirit of debate season, here are five tips for winning debates with your clients. 1) Never play defense. Playing defense often makes one look guilty and erodes trust. If you're a parent who has ever refused your kid candy, you can attest that, in that moment, your child is not in the mood to hear that you're doing this for his or her own good. In that moment, your kid mostly wants to continue having the feelings he or she is having and to know that you will stand by his or her side through those feelings. Similarly, trust is formed when clients learn they can... Read full post

Oct 12, 2016, 3:37 PM EST

As Finra's mutual fund waiver sweep continues, medium and small broker-dealers are targets

By Kamran Fotouhi

Since Finra began its investigation of mutual fund waivers in 2014, most of the industry's largest broker-dealers have engaged in negotiations with the agency to address whether correct sales charges were applied to certain types of mutual fund clients. The agency has also been reviewing process and supervisory procedures at those firms to ensure that fee waivers are properly assigned in the future.The reviews center largely on Class A mutual fund share classes, involving retirement accounts and charities, for which front-end load charges are often waived. To date, Finra has assessed millions of dollars in penalties and restitution for overcharges from a number of large broker-dealers. And last May, the agency announced that an unspecified number of broker-dealers had been asked to explain their practices, signaling a continuation of the targeted reviews, and serving as a shot over the bow for firms that have not yet self-reported the... Read full post

Oct 9, 2016, 10:26 AM EST

ETFs emerging as important part of alternative investment market

By Sam Masucci and Barney Karol

Exchange-traded products are becoming an important part of the alternative investment market. ETFs have and will continue to “democratize” the investment world by allowing investors low-cost access to asset classes previously available only to sophisticated institutional investors. At the same time they are an increasingly important tool for those institutional investors who use ETFs for both basic and custom exposures. Institutions that would never use a conventional mutual fund will use an ETF if it delivers a desired exposure more efficiently than a competing future, swap or separate account.Since the ETF wrapper does not have the embedded distribution costs and commissions of many traditional products, it will benefit from the Department of Labor's fiduciary rule as well. This is an important consideration, as the Securities and Exchange Commission is also considering extending fiduciary standards to retail brokerage... Read full post

Oct 9, 2016, 10:20 AM EST

Don't mistake achievement for passion and purpose

By Stephanie Bogan

When I relocated with my family to Costa Rica in April 2014, at the apex of a successful career, I walked away from it all. By age 35 I'd built a thriving firm, Quantuvis Consulting, and sold it in a seven-figure deal to Genworth Financial. After serving on the executive team for four years, I spent a year traveling with my family. I returned to join the executive team of United Capital. Along the way I wrote a monthly magazine column, was labeled an industry influential, made the cover of a magazine and published a book for Bloomberg Press. Success. Money. Prestige. I had it all. But something far more important was driving my move to uncharted waters: a deep search into my soul for what was missing. What had been holding me back? What keeps so many of us from reaching our full potential? I had a few clues to work with. I knew that behind my success, I was constantly beset by stress, anxiety, fear and doubt. I had every comfort and... Read full post

Oct 7, 2016, 3:05 PM EST

How I tackled tech when starting a new advisory firm

By Ryan Linenger

I left a great wealth management firm to start my own RIA over six years ago. This was a difficult decision, but I wanted to serve a slightly different market that I thought was underserved — the younger baby boomers and a lot more of my peers (Gen-Xers and some millennials) that fell under the radar of the top wealth management firms.I started with zero clients. Needless to say, I didn't have a lot of client work at the beginning and I had very limited financial resources. With that extra time, I spent many hours reviewing the available technology providers to decide which would be best to buy. Looking back, having that extra time was sort of a blessing in some ways, as I had time to build out a solid group of technology partners to help me run a very efficient business behind the scenes, while providing a nice web portal and client interface from the beginning.(More: Tech-tardy advisers, prepare for a late-adopter penalty)I... Read full post

Oct 3, 2016, 4:54 PM EST

Independent advisers are key to economic growth in their communities: Oxford Economics study

By Dale Brown

With America in the thick of election season, we hear one question asked repeatedly in regards to various candidates and policies: “Who is looking out for the middle class?” Political fortunes will rise and fall across the country this November as voters decide which candidates truly understand Main Street Americans' economic concerns and which do not.According to a comprehensive new study conducted by Oxford Economics on behalf of the Financial Services Institute (FSI), those candidates might do well to listen to the members of one industry in particular: the independent financial services industry.The results of the study were announced for the first time at the inaugural FSI Forum in Dallas, which was developed to help independent financial advisers and firm executives prepare for implementation of the Department of Labor's new fiduciary rule.While Americans may not be as familiar with independent firms as they are with... Read full post

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