Outside voices and views for advisers

Feb 17, 2017, 3:02 PM EST

Financial technology companies embrace artificial intelligence and virtual reality


By Deborah Fox

The best place to get up to speed quickly on the latest and greatest fintech offerings is the annual Technology Tools for Today conference. I have been attending T3 for more than a decade, and I am pleased to report that the conference this week was one of the best. I went looking for companies that are taking advantage of next generation technology, specifically artificial intelligence. Its power can potentially open up an infinite number of ways to improve the user experience. AI is still a year or two too young to be the event's débutante this year. However, attendees received a peek of what's in the works.While there were new emerging companies represented at T3, the most interesting new features came from two of the stalwarts in the fintech space. Jessica Liberi of Fidelity's eMoney delighted us with a live AI demonstration of an integration between Alexa and eMoney's eMX platform. She asked Alexa, "What were the last three... Read full post

Feb 14, 2017, 12:55 PM EST

Working to spark a global movement for pro bono financial planning

By Jon Dauphiné

The United States has a long history of connecting the financial planning community to people in need. For 22 years now, we've helped fund vital programs that connect volunteer financial planners to underserved people who need no-strings-attached, objective advice. But what about other countries?I was able to explore this question when the Dutch association of financial planners, Federatie Financieel Planners, invited me to come speak to them about the evolution of pro bono planning in the United States. (Both a membership organization and a certification body, the Federatie would equate to a combined Financial Planning Association and CFP Board in the U.S.).The Federatie is the largest association of financial planners in Europe, with 4,000 members, and they are just beginning to think about harnessing the professional skills of their members to help the most vulnerable in Dutch society. Helping them along is Egbert Ludwig, a planner... Read full post

Feb 13, 2017, 12:57 PM EST

3 questions independent broker-dealers should ask private equity product sponsors

By Clive Slovin

Just two years ago, non-traded real estate investment trusts and business development companies were in favor among retail investors seeking increased opportunities for yield. Since then, a combination of increased regulatory complexity, negative media scrutiny and changing market conditions have caused many retail financial advisers and their clients to step away from these investments. Many of the same forces are currently impacting energy-related programs targeted at the accredited investor (generally those with income over $200,000 per annum or an investable net worth of at least $1 million) with similar results.But the very conditions that drove demand for income-generating or total return-oriented retail alternatives — such as an exceptionally low interest rate environment, creating a yield-starved investing landscape — remain fundamentally unchanged.And that's where private equity comes in. With non-traded REITs and... Read full post

Feb 8, 2017, 12:16 PM EST

Higher investor protection standards ahead regardless of DOL fiduciary rule outcome

By Maria Cardow

Firms should expect that even if the DOL fiduciary rule is rolled back, they will be held accountable by regulators for higher standards of investor protection. They should still be thinking about whether they are offering the same products, using the same systems and recording the same-old data, which in today's complex investment environment is not enough. Advisers need to fundamentally rethink how they prove suitability with enforcement in mind.Advisers will need to be able to demonstrate they are recommending low-fee and high-performance products. Current operations and technology are insufficient to capture the multi-dimensional data needed to prove suitability of an investment for a specific client. Part of the problem is that the client investment profile is self-reported and sentiment-based, with investors filling out a standard five- to 15-question survey about how they feel about risk. There has to be a more quantifiable way... Read full post

Feb 7, 2017, 4:52 PM EST

How to pick the right active manager

By Steve Graziano

Volatility has ripped through the equity markets due to concerns surrounding slowing growth in China, a Fed shifting from hawk to dove, the Brexit vote, a turbulent U.S. election cycle and a surprise win by Donald Trump. For any adviser trying to evaluate strategies and build diversified portfolios for clients, that bumpy ride can create opportunity by choosing active managers who know how to leverage volatility. The key for advisers is knowing how to pick the right active manager.We know that if we invest in a fund that simply follows the benchmark index, we will get nothing more than that benchmark performance, less the fees. That's why it's critical to find active strategies that complement the passive ones. What characteristics in an active manager should you be looking for?(More: Schwab cuts expense ratios on index funds)Just as all passive strategies differ, not all active managers are the same. That is why the relatively new... Read full post

Feb 7, 2017, 10:43 AM EST

Trump executive order may prevent guidance on employee benefits issues

By Marcia S. Wagner

For employee benefits practitioners, the key takeaway from a recent Trump administration executive order on reducing regulations and controlling regulatory costs is this: “For every one new regulation issued, two prior regulations must be identified for elimination.” This order, issued Jan. 30, may seem to have little relevance for retirement plan advisers, but is likely to have a significant impact if tax reform becomes a reality, particularly with respect to issues of executive compensation. Here's one example.In an interpretive bulletin published in December, the Labor Department stated “consideration of the appropriateness of executive compensation” is important when pension plans determine how to vote proxies and exercise shareholder rights under ERISA. (For example, a pension plan should not vote in favor of a new clearly excessive executive compensation arrangement for a company in which it invests, as... Read full post

Feb 7, 2017, 6:39 PM EST

3 non-traditional methods for acquiring a financial advisory practice or book of business

By David Grau Sr.

In the highly-competitive acquisition landscape for independent financial advice practices, successful buyers need an edge. Embracing non-traditional acquisition methods provides an essential set of tools that may make the difference between a successful growth strategy and getting stuck in neutral.Most acquisition strategies center on the stereotypical seller: usually someone who is in his or her mid-sixties and wants to fully retire, if only they can find the perfect adviser to whom they can sell their practice. The fact is, though, many successful acquisitions involve sellers who were nowhere near ready to sell when they were first approached. Engaging such potential sellers requires stepping outside traditional deal structures that buyers may have employed in the past.(More: Banks, credit unions could start buying advisory practices)Over the past several years in particular, the following three non-traditional methods for acquiring ... Read full post

Jan 31, 2017, 1:54 PM EST

FSI expects a more business friendly environment in 2017

By Dale Brown

The political world is still responding to the monumental and unexpected change we saw at the end of 2016, as the Republican party — led by now-President Donald J. Trump — took control of the White House and both houses of Congress. Our early communications with the transition team and, now, the new administration indicate that they and their allies in Congress are likely to be much more responsive to the voice and concerns of independent financial firms and advisers in the years ahead.Given the substantial questions that still surround the Department of Labor's fiduciary rule and other regulatory and legislative measures that stand to impact our industry — from state-run retirement plans for private sector workers to ongoing challenges to the independent contractor business model — many advisers and other industry members are greeting this change in our nation's leadership with a sigh of relief.In many ways, ... Read full post

Jan 30, 2017, 5:45 PM EST

How retirement plan advisers can help clients with compliance

By Susan Shoemaker

Retirement plans are complicated, and employers often find themselves too busy to give them appropriate attention. Given the complexity of operating these plans, a large number of plan sponsors may inadvertently be out of compliance, and this can lead to tens of thousands of dollars in penalties and fees, without even including the cost of an ERISA attorney. So, it seems pretty natural that over the years an investment adviser's role has evolved into one that, ideally, helps ensure compliance and minimize risk, which has become of utmost importance, especially as 401(k) litigation has increased.If advisers aren't assisting with compliance, they may be at risk of losing clients as plan sponsors continue to view them as a key provider of best-practice solutions. Here are a few steps advisers can follow to help plan sponsors:Review plan provisions with clientsUnderstanding the plan is the first step toward compliance.For example, do... Read full post

Jan 27, 2017, 12:53 PM EST

3 ways financial advisers can get ahead in 2017

By Shawn Sparks

Everyone's familiar with the famous Isaac Newton quote, “If I have seen further, it is by standing on the shoulders of giants.”However, not many of us actually take his words as sound advice. Too many of us opt to rely on our own experiences and gumption rather than trying to learn from the experiences of others. Financial advisers are no different. In an age where there are numerous resources at our fingertips, there's no excuse not to take advantage. But people are afraid to ask for help. It's sad, but true. So, instead of leveraging additional points of knowledge, many advisers choose instead to remain blissfully in the dark. However, the advisers who can overcome their own insecurities and ask questions differentiate themselves and soar ahead of the rest. Advisers need to tap into today's resources to stay innovative. In today's changing financial services sector, it's more important than ever to remain ahead of the... Read full post

Older »