Outside voices and views for advisers

Oct 19, 2017, 4:41 PM EST

Good luck picking the "best" insurance product


By Barry Flagg

The question I get asked more than any other is: "Which insurer offers the best products?" However, this question is just as silly as: "Which mutual fund company offers the best mutual funds?" In fact, while there's no general agreement about which mutual fund company offers the best funds for all clients and all situations, it's even sillier to think that one life insurance company could offer the best products for all clients in all situations, for the following reasons. There are thousands of mutual funds, and yet no mutual fund company offers the highest-rated funds for all clients in all situations. Some offer highly rated equity funds. Others offer funds highly rated for their fixed-income performance. Others are highly rated for their international, or small-cap, or high-yield-bond fund performances. Some are no-load funds while others charge a commission. Some are passive, while others are highly rated for their active... Read full post

Oct 19, 2017, 3:44 PM EST

Finding common ground with clients from different ethnic groups


By Greg Oray

Investing involves money and money is personal. This business changes constantly, but what always remains the same is building trust and strong relationships with your clients. It's the key to growing your business. The best relationships are made through the stories we share. My story began when my mother and I moved to America. I'm an immigrant from Russia. When I was nine years old, my mother packed a suitcase and purchased two one-way tickets to New York. She had $500 and couldn't speak English. We got a hold of old friends living in Southeast Detroit and for the next 25 years I was lucky to call it home. My mother, Olga, was a very smart and determined woman in pursuit of the American dream. Working was in her DNA and it took many hard years to make that dream a reality. When I got older, I finally understood what she had accomplished. This is my story. The challenges and sacrifices we must make for the growth and success of our... Read full post

Oct 19, 2017, 3:38 PM EST

Top 5 ways comprehensive technology boosts client engagement


By Stuart DePina

For decades, financial advisers built relationships with clients through fairly traditional means, but today's investors are looking to connect with their advisers digitally. Advisers who leverage a comprehensive technology platform can provide an enhanced client experience while giving themselves time to focus on the aspects of wealth management they do best: helping clients navigate the financial landscape, tax and estate planning, charitable giving, and sophisticated financial and goals-based planning.Below are the ways an integrated technology platform can help advisers improve client engagement: 1. Gives clients the access and interactions they are seeking. Technology can help advisers provide clients with the information and insights they want anytime, anywhere. User-friendly tools – including mobile apps – give clients visibility into their finances in real time, and serve as a powerful sales tool to demonstrate the... Read full post

Oct 18, 2017, 4:48 PM EST

Let hard data, not gut instinct, define your ideal client profile


By John Capuano

In an industry based on facts and figures, why is it that financial advisers base most, if not all their marketing data on "gut instinct"? When asked about a profile of their core client, they rarely base their answers on facts, thinking about their Ideal Client Profile in ways that make them feel good. For example: "My average case is $1,000,000 in assets", "we have close to 100% wallet share", or "we close 75% of the people that walk in the door." Let data be your guide when it comes to efficiently pinpointing your best prospects. For the same reasons advisers don't want human emotions to cloud investment decisions, emotions shouldn't dictate their sales and marketing decisions. Here are five things you can do to be a better student of your Ideal Client Profile: GOOGLE ANALYTICS If you've ever wondered how people "follow you" after they've been to a seminar, met you at a party, heard you on a broadcast news segment, or were referred... Read full post

Oct 13, 2017, 11:07 AM EST

Tax reform threatens a powerful client relationship tool


By Andrew Hibel

This won't be your father's tax reform process – and it may not be the one your business needs either. That's because it might take away investment advisers' number one secret weapon for building strong relationships with their clients – the charitable deduction.The path to tax code simplicity will not be a simple one. Last time out, President Ronald Reagan's Tax Reform Act of 1986 reduced 14 income brackets to a mere three – a process that, with bipartisan support, went relatively smoothly. In contrast, the Aug. 30 debut of President Donald J. Trump's tax proposal only spurred the posturing that followed: House Republicans floated their blueprint for tax reform; Senate Democrats volleyed back with a letter that lists their non-negotiables for the process.Speaker Paul Ryan's blueprint called for a doubling of the standard deduction. This proposal would simplify life for many of the nation's tax filers – the 33%... Read full post

Oct 12, 2017, 9:57 AM EST

Financial therapy 'money scripts' can help you beat the robots


By Michelle Begina

Why would someone pay a financial adviser to manage their assets when an automated system can do it for less money? To accomplish this, many advisers are beginning to explore the discipline of financial therapy, a relatively new practice combining technical and financial competence with behavioral coaching and counseling. Feelings that your clients harbor today about money stem from way back when they were kids. The part of their lives when they were just starting to earn, save and spend money on a consistent basis are at the root of their financial challenges and opportunities in adulthood. Since these initial views on money are imprinted at such a young age, they often develop into stubborn habits later in life that can hinder long-term financial goals. Cue financial therapy. HOW IT WORKSFirst, advisers need to ask questions they're not necessarily accustomed to asking. Financial therapists have been known to predict what their... Read full post

Oct 12, 2017, 9:55 AM EST

Why your portfolio may have too much equity risk (Hint: It's your bonds)


By Patrick Nolan

Industry-wide calls for interest rates to rise over the past five years may be inflicting an unintended toll on portfolios: Many are overexposed to equity and equity-like risk, with little to offset it.When the Fed dropped its target short-term interest rate to the 0%-0.25% range in December 2008, many knew it would be there for a while, but once the economy showed signs of healing, many market participants prepared their portfolios as if they expected the rate hikes of the past — where movements were in percentage points, not basis points. Very few foresaw a 10-year U.S. Treasury rate hovering around 2.3% near the end of 2017.As a result, despite calls of "lower for longer," an over-reduction of bond sleeve durations has sapped portfolios of valuable diversification. At the same time, in a persistent low-rate, income-starved world, many stretched into higher yielding credit instruments seeking two things — more income... Read full post

Oct 11, 2017, 9:04 AM EST

401(k) referrals rare from wealth managers despite DOL fiduciary rule


By Fred Barstein

Conventional wisdom is that the Department of Labor's conflict-of-interest rule would result in a flood of referrals from wealth management advisers and other less-specialized retirement plan advisers to retirement-plan specialists.Beware of conventional wisdom. Though 401(k) referrals are likely to increase, there are still many obstacles, especially for advisers within independent broker-dealers. I caught up with Bill Beardsley, newly minted retirement chief at independent broker-dealer LPL Financial, who said LPL encourages 401(k) referrals, especially between the "emerging" plan advisers and "elite" advisers, who do very little else other than 401(k) business. However, he acknowledged a few challenges:• Independent broker-dealers stop short of mandating how their advisers conduct business, other than for compliance reasons.• Wealth management advisers who stumbled into 401(k) relationships are more likely to seek help... Read full post

Oct 11, 2017, 1:00 PM EST

What can Tabasco sauce teach advisers about 401(k) loans?


By Aaron Pottichen

As plan advisers, our guidance might help increase a plan's overall participation and average deferral rate, but there is little we can do to help people when they're confronted with a large, unanticipated expense. For some, this means dipping into an emergency fund; for others, whipping out the credit card or hitting up friends or family for cash. For a select group, it means taking a loan from their 401(k). Advisers would prefer participants never take a 401(k) loan, but we also know that's unavoidable for some. The good news is participants are starting to take fewer loans. As of end-2015, 18% of people eligible for loans had one outstanding. That figure was 20% in 2014, according to most recent figures from the Employee Benefit Research Institute. Following are a few strategies to help advisers continue that trend.FEWER LOANSLegend has it Tabasco sauce executives, wondering how to generate more sales, came up with a simple-sounding ... Read full post

Oct 11, 2017, 12:41 PM EST

Brace yourself for more SEC exams


By Guy F. Talarico

The new Securities and Exchange Commission chairman, Jay Clayton, recently testified before Congress that the agency will increase its examinations of investment advisers by 20% in the current fiscal year, and nudge those numbers up a further 5% in fiscal 2018. More than 50% of requested budget funding will be invested in the agency's enforcement and examination programs. This budget will support the SEC's effort to place a high priority on adding more examiners as part of the agency's multi-year plan to increase coverage of investment advisers. This mirrors former SEC Chairwoman Mary Jo White's November 2016 testimony, in which she stated increasing adviser exams was a top priority in the SEC's FY 2018 preliminary budget request.An increase in exam coverage is necessary as registered investment advisers now manage over $70 trillion in assets, more than three times 2001 levels. To keep pace, the SEC reassigned approximately 100 staff... Read full post

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