Outside voices and views for advisers

Jan 18, 2017, 10:31 AM EST

DOL's new FAQs on fiduciary rule focus on circumventing fiduciary status

By Blaine F. Aikin

The Department of Labor has issued a second set of answers to questions frequently asked by advisers about its new conflict of interest rule.The document reiterates, reinforces and clarifies key concepts at a technical level through the use of examples. The most surprising aspect of these FAQs is they concentrate on behaviors by advisers that will legally and appropriately circumvent fiduciary accountability.One question on everyone's mind that isn't in the FAQs, and the DOL can't answer, is whether or not the rule will ever actually be implemented. Given that the incoming Trump administration and Republican majorities in the House and Senate are generally hostile toward the fiduciary rule, some might question why the DOL even bothered to issue this set of FAQs exactly one week before Inauguration Day. Legislation has already been introduced in the House to delay the rule and it is widely expected that a redirected Trump-era DOL will... Read full post

Jan 12, 2017, 3:10 PM EST

Is it time for financial advisers to change their messaging around retirement?

By Maribeth Kuzmeski

Many financial advisers specialize in retirement planning and retirement income distribution services. But what if retirement itself is no longer the compelling reason for people to see a financial adviser?Consider this: Individuals who have great wealth, who are inheriting great wealth and who are the future of a financial adviser's client base don't actually want to retire. A recent survey from Merrill Edge reveals that 79% of Gen Xers (1965-1980) don't think they will retire in the traditional sense and 83% of millennials (1981-1997) feel they will never retire. From a marketing perspective, this puts the entire industry at a great disadvantage. From “What's your number” and “The Retirement Red Zone” to other marketing campaigns, the industry has defined itself by its ability to ready people for retirement. Could this now be old school?If retirement isn't the big hot topic moving forward, then what do people... Read full post

Jan 12, 2017, 3:10 PM EST

10 important client considerations with 401(k) rollovers

By Jamie Hopkins

A tremendous amount of money flows from 401(k)s to IRAs every year through rollovers as individuals retire, switch jobs or just consolidate their wealth. Financial advisers are eager to serve this marketplace due to the opportunity involved. We know that the Department of Labor is clearly concerned about these transactions, as shown by recent regulatory actions. But do we understand how consumers look at this decision? Is the decision important to them? What factors do they consider in making their decisions? A recent survey report released by The American College of Financial Services provides some useful insight into client behavior during a rollover. The “Defined Contribution Rollover Survey” asked recent retirees who retired with at least $75,000 in their last employer's 401(k) plan about what they did with their savings upon retirement. Below are 10 highlights from the research that all advisers should know.1. A... Read full post

Jan 11, 2017, 11:27 AM EST

Why retirement plan advisers should care about the HSA market

By Aaron Pottichen

Why should retirement plan advisers care about health savings accounts? The short answer: The HSA market is growing and there is a void in education and advice, which retirement plan advisers are perfectly positioned to fill. The money in HSAs allocated to investments was an estimated $5.7 billion in 2016, according to Devenir Group's annual HSA market report. And those assets are growing — they've nearly doubled since 2014. Additionally, the largest contingent of the U.S. labor force now consists of millennials. They have the highest adoption rate of high-deductible health plans, which are required to get access to an HSA, of any age group. Many financial advisers are finding it difficult to reach millennials, who would rather interact with a website than a human being. But being able to speak with them about HSAs may prove to be a valuable way to gain access to this growing market, both from a retirement-plan-adviser and... Read full post

Jan 9, 2017, 11:39 AM EST

Tips for working with female clients who are in financially unequal relationships

By Susan Bradley

When partners are financially unequal, it's challenging no matter who has more. You would think that by now, a woman having substantially more money wouldn't be such a big deal. But it is. And you might think that the experience you have with men who have considerably more wealth than their partners translates in this situation. But it doesn't. When a woman has more, a subtle imbalance is created in the relationship that is often difficult to talk about. Yet, without honest conversation, failure is likely. Here are my top tips for advisers when dealing with female clients who are already in financially unequal relationships or who are considering getting back into dating and are likely to end up with someone whose wealth is considerably less than theirs.1. Recognize the challenges.For many women, this is a touchy subject. And they might not bring it up, even when they think it might be relevant. It's also entirely possible that a woman ... Read full post

Jan 3, 2017, 11:38 AM EST

Outlook for 2017 retirement plan litigation

By Marcia S. Wagner

2016 saw an uptick in litigation targeting retirement plan fiduciaries, and 2017 will see more of the same, plus the resolution of the definition of a church plan with respect to organizations affiliated with churches, and more cases involving a plaintiff's standing to file a civil action under ERISA.We can expect to see more litigation with respect to Code Section 403(b) plans alleging various breaches of fiduciary duty. This is a clear example of low-hanging fruit ripe for copycat litigation. It is actually somewhat surprising that it took as long as it did for these suits to be brought. While 403(b) plans have become closer to 401(k) platforms since the Pension Protection Act of 2006, there were significant differences prior to that date, so it remains to be seen whether those fiduciary-breach claims will stand up. Clearly, some of the large universities involved in these civil actions will contest the cases vigorously. But they may ... Read full post

Dec 27, 2016, 4:26 PM EST

Trump throws monkey wrench into REIT sector

By Rani Molla

2016 was supposed to be the year of the REIT — until it wasn't.In September, real estate got its own major market index category, bringing real estate investment trusts more visibility and, by extension, access to more capital.Like clockwork, real estate-related ETFs saw their greatest inflow ever in September. But October saw steep outflows, due to investors' fondness for higher government bond yields and a greater likelihood of an interest rate hike. November's seismic political shift exacerbated those conditions, making an interest rate increase almost inevitable and sending bond yields soaring further. Donald Trump's election in November further contributed to those trends. The election and his attraction to a stronger dollar have helped spur higher rates, meaning, also, higher borrowing costs. That's a bad thing for REITs, which pay 90% of their taxable income as dividends and thus rely on debt for growth. (More: Testing... Read full post

Dec 27, 2016, 4:24 PM EST

How financial advisers can get unstuck in the New Year

By Nicole Newlin

Most financial advisers started their firm because they had a dream for a different life and a vision of how to get there. They're passionate, ambitious and committed to building their new venture.Fast forward a few years and, in all too many cases, the entrepreneur has left the building. Rather than taking their dream to the next level, too many advisers are stuck. They spend their days doing menial office tasks and pushing paper. Instead of living their vision, they have become the office technician. Other advisers are mired in staffing issues or the day-to-day needs of the office. The reality is that they have traded their role as visionary and leader for manager. Michael Gerber discusses this trap in his book “The E-Myth.” What he describes translates perfectly into what happens when the adviser takes off their business-owner hat and stops working on their practice.(More: Why the financial planning industry needs a... Read full post

Dec 27, 2016, 2:42 PM EST

Dan Ivascyn, Bill Gross' successor at Pimco, not as flamboyant as the old bond king, but he has produced results

By Lisa Abramowicz

The old bond king's pomp no longer fits the circumstance.The dethroned monarch, of course, is Bill Gross, the Pimco money manager known for his flamboyant public appearances, investor letters with paeans to his cat, sweeping market calls and desire to be proved right.The madness of King Bill was accepted, even celebrated, while he helped build the California money manager during a 30-year bull market in bonds. But times change, and he was ousted from Pimco in 2014 in something of a palace coup after a prolonged internal battle.His successor as Pimco's global chief investment officer was Dan Ivascyn, a celebrated investor in his own right during his nearly 20 years at the firm. But the similarities end there. If he is the new bond king, he is one for a different era.Let's count the ways Ivascyn is different from Mr. Gross: He cuts a much lower profile. It's rare to see him on television. His comments about the market are filled with... Read full post

Dec 27, 2016, 2:18 PM EST

Why the financial planning industry needs a Jerry Maguire-like paradigm shift

By Michael Conway and Zachary Conway

Jerry Maguire stood in a maze of cubicles and performed his swan song to the blank stares of his coworkers. In the sports agency racket, he had become lost in a system where both agents and clients had learned to follow the money and nothing else. And so, with a bold manifesto, Jerry broke from the status quo. Sure, Jerry's just the main character of a fictional movie, but something of his declaration rang true, transcending fiction. Jerry's dilemma should resonate with any professional who faces the same kind of disillusionment when the system breaks and priorities misalign.As financial advisers, we relate to Jerry's plight. Like negotiating sports contracts, money management has become even more of a thankless sticking point in building client relationships. When Jerry's lone client, Rod Tidwell, demands he, “Show me the money,” Jerry's forced to focus on fulfilling that singular desire. Meanwhile, advisers similarly... Read full post

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