Outside voices and views for advisers

May 4, 2016, 4:25 PM EST

The DOL fiduciary rule's effect on small broker-dealers

By Ross David Carmel

In the current regulatory landscape, small to midsize broker-dealers are subject to an ever-increasing regulatory burden. The new Department of Labor fiduciary rule simply adds fuel to that fire. Earlier this month, after five years in the making, the DOL finalized its new fiduciary rule to regulate investment advice in retirement accounts. Prior to this rule, which will take full effect in the next 12 to 18 months, registered representatives working at broker-dealers operated under the suitability standard when providing investment recommendations to owners of retirement accounts. The DOL fiduciary rule dramatically changes this standard and imposes fiduciary status on these registered representatives. Fiduciaries are obligated to act in the best interest of their clients, and the rule provides that registered representatives are only to receive reasonable compensation for their services. While this may sound like a no-brainer, the... Read full post

May 4, 2016, 2:45 PM EST

7 steps to crafting an effective marketing story

By Brad Johnson

Have you ever wondered whether you're telling your prospects the right marketing story about yourself and the service you provide?If you're like most financial professionals, you already understand the importance of a story in marketing, but you haven't taken much time (if any) to study how to tell the right story to resonate with your target audience.Recently, I interviewed Donald Miller, the CEO of StoryBrand. He's consulted with hundreds of companies to help them clarify their marketing messages, including Berkshire Hathaway Inc., Chick-fil-A, Charity Water and Intel Corp., to name a few. Mr. Miller has also published seven books.At StoryBrand, Mr. Miller and his team coach clients on a seven-step framework to successfully tell a story that clarifies their clients' messaging to create better websites, elevator pitches and marketing materials.Mr. Miller says every effective story follows the same seven steps. They are:1. Starts with... Read full post

May 2, 2016, 4:51 PM EST

Reinforcing the culture of compliance, industry-wide

By Dale Brown

While a company's culture may be intangible, there is no doubt it can be one of the most powerful determinants of a firm's long-term success or failure. How to foster a winning corporate culture has been the subject of innumerable books, articles and motivational speeches.The notion of building a strong culture across an entire industry is less widely understood, but is no less important to the ongoing health and success of the firms and individuals who make up a given market sector. With the engagement of a critical mass of industry players, it is certainly possible, as the Financial Services Institute (FSI) is seeing today.With Finra emphasizing the centrality of independent financial services firms' respective cultures as part of its 2016 examination and enforcement priorities, FSI is pleased to play a role in helping to further define and reinforce our industry's strong existing culture of compliance. FSI is working to facilitate... Read full post

Apr 27, 2016, 5:37 PM EST

BlackRock's Larry Fink says it's time to use fiscal policy to spur growth

By Michael P. Regan

Larry Fink, chairman and chief executive of mutual-fund behemoth BlackRock, uses his hands a lot when he talks. Nothing wrong with that; some of the world's best orators have a hard time keeping their mitts down when they speak. Heck, Bernie Sanders seems to have hypnotized half of the Democratic Party with his hand jive.However, Mr. Fink had one problem on Wednesday. He seemed to be trying to let his right hand do all the talking during an interview with Erik Schatzker on Bloomberg Television. But eventually, that left hand simply could not remain silent any longer and rose up proudly to be heard. What it had to say was loud and clear: "I am in a world of pain!" Visible on the middle finger nail (watch for it at 3:50 of this video) was the type of black-and-blue coloring familiar to any do-it-yourself home-improvement enthusiast who hammered aggressively at a nail &mdash: and missed terribly. At publication time, it was unknown if a... Read full post

Apr 25, 2016, 4:45 PM EST

Four signs you need to network more

By Grant Webster

As a financial adviser, you will likely find yourself in a balancing act between servicing your client base and developing new relationships and prospects. But how much time are you spending networking and marketing your personal brand? Are you effective and strategic in your efforts? Below are four signs you may not be networking to your full potential.1. You don't have specialists to refer clients to. Whether it's a complicated life insurance discussion, a real estate acquisition or a simple estate plan, you should aim to have several well-vetted specialists in each area of expertise available to help guide your clients. The benefit of surrounding yourself with a large network of specialists is that you will always feel comfortable sending your clients to professionals you trust and respect. If you send a client to a random specialist you have never met or haven't yet vetted, then what happens to your valuable client relationship... Read full post

Apr 25, 2016, 3:03 PM EST

The role of the broker-dealer in a post-DOL-fiduciary world

By Adam Antoniades

As our industry has waited with trepidation for the Department of Labor to finalize its fiduciary rulemaking process over the last several years, advisers and broker-dealer executives alike have come to feel like a patient awaiting a gloomy diagnosis from a doctor. While the doctor's news may be tough to hear, the wait — and the attendant anxiety — are almost worse.We and other members of our industry have always viewed serving clients' best interests as a bedrock principle of our business, and we support efforts to further this crucial goal. The DOL rule is expected to introduce significant changes to advisers' business processes, operations and portfolio management. While firms' assessments of the final rule are ongoing, it is already clear that the regulation's more stringent requirements for retirement account advisers will create significant changes to how we do business in the years ahead.It is time for firms that... Read full post

Apr 22, 2016, 2:32 PM EST

Should Fidelity make smart beta smarter?

By Nir Kaissar

This, I think, was inevitable: Fidelity Investments — the money management behemoth that turned fund managers into rock stars — is entering the smart beta exchange traded fund business with a large-cap, value ETF.Okay, so it's not exactly a trailblazing debut. Fidelity spokesman Charlie Keller acknowledged as much, saying that the move merely brings Fidelity “in line with the industry.”But Fidelity needn't settle for another me-too lineup of smart beta ETFs. It has the resources and the reach (and the active management cred) to realize the promise that smart beta holds but has yet to deliver to most investors: low cost active management across asset classes and styles. Fidelity should seize the opportunity, for itself and the industry it represents. “Smart beta” is shorthand for funds that, for example, might target companies that are cheaper or smaller or more stable than the overall market. Lots... Read full post

Apr 21, 2016, 5:29 PM EST

Ways advisers can successfully target new Gen X clients

By Bob Ireland

The Deloitte Center for Financial Services recently published a very compelling study, titled The Future of Wealth in America, which reveals some surprising data pertaining to trends in generational wealth. While most wealth managers primarily cater to the baby-boomer generation (and rightfully so, as they hold 50% of net household wealth) and worry about the burgeoning millennial group, Gen X (born between 1965-1980) becomes a forgotten generation. This despite the cohort appearing poised to have the biggest impact on wealth-management fees over the next 15 years. How, you ask?  Well, the numbers show that as of 2015 they — or should I say, we, represent 14% of total net wealth and by 2030 that number will double to 31% or $37 trillion in net worth and financial assets of $22 trillion, closing in on the baby boomers.   So in essence, what the research states is that you have 66 million adults in their peak earning years with... Read full post

Apr 20, 2016, 9:23 AM EST

How to ease clients' minds about ETF liquidity concerns

By Brandon Clark

We've come a long way from the early days of ETFs, when only a handful were on the market. Today, there are many options available to investors, and more compelling solutions to clients' needs.Yet even with all the advancements the industry has made, when it comes to understanding ETF liquidity and trading, we've had the same conversations for more than 10 years: “I like your product, but it isn't liquid enough to use,” investors say. “How do I know I can get out of it? “If it only had more volume.” “It's hard to trust something that isn't trading.”These are real concerns — and good old-fashioned bunk.It's entirely normal for clients to be concerned about liquidity in any of their investments, but all financial instruments do not work the same way. Sometimes they focus on the wrong things.Investment exposure should be the main priority. Making trade-offs between “low-volume”... Read full post

Apr 20, 2016, 3:26 PM EST

How to prepare clients for changes to their BDC and nontraded REIT investments

By Clive Slovin

While the Department of Labor's newly unveiled fiduciary rule has dominated industry headlines in recent months, another fresh regulatory shift also has the potential to cause significant upheaval for countless advisers. The Financial Industry Regulatory Authority Inc.'s Regulatory Notice 15-02 announced changes to NASD Rule 2340 and Finra Rule 2310. As a result of these changes, effective April 11, retail clients invested in direct participation programs — such as publicly registered business development companies and nontraded real estate investment trusts — will begin to see critical adjustments to their account statements this quarter.These adjustments ostensibly will offer a greater level of pricing transparency and better reflect the fact that the fees for these investments typically are paid upfront. The planned changes have been in the works for well over a year.A surprisingly large number of advisers have been slow ... Read full post

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