5 things advisers should be thankful for in 2022

Notice how holiday celebrations and promotions for seasonal events are happening earlier and earlier? July 4th seems to begin on Memorial Day. Back-to-school ads kick off in July. And jack-o’-lanterns pop up around Labor Day. In keeping with the celebrate-early trend, let’s start Thanksgiving now. In no particular order, here are five reasons advisers should give thanks, despite worries about the economy and the body politic.

The return of conferences. The advice business adjusted well to pandemic-spurred remote work arrangements, with virtual replacing physical in so many ways. But nothing truly compensated for the absence of in-person conferences. The disruption not only hurt those whose business model centers on physical events, but would-be attendees lost countless opportunities to improve their skills, make important business and social contacts, and profit from the serendipitous connections that gatherings invariably produce. So, while a trip to a conference may be more expensive and more of a hassle than ever, thankfully, industry events have come back.

Cash makes a comeback. Yes, rising interest rates and their uncertain future continue to rattle the equity and fixed-income markets. But for the first time in a long time, cash is no longer trash. All types of cash-proxy instruments are delivering more than tissue-thin yields. Setting aside some money in liquid form again makes sense and thrift is no longer being penalized. Those are things for which giving thanks is justified. Broker-dealers are probably very thankful too, as the rise in short-term rates has restored the float-related income that traditionally has been such an important part of their revenue.

New advertising rules. The Securities and Exchange Commission’s new rules on marketing and advertising, which went into full effect Friday, continue to raise questions that leave advisory firm compliance personnel scratching their heads. Unfortunately, as past experience has shown, it takes a while for regulator and regulated to sort out the ways new rules can work in the real world. Once the testimonial, endorsement and other provisions of the new rules are clarified, advisers will have far greater latitude in the ways they can market their services. That’s something every adviser should appreciate.

In keeping with the celebrate-early trend, let’s start Thanksgiving now.

Tech innovation continues. Despite the frustration every adviser no doubt has felt when a new software tool or hardware device hiccups, technology has been and continues to be a boon to the advice business. This year, advisers have seen tech innovation in areas including account onboarding, marketing and compliance. In products, the growth of direct indexing is in good measure attributable to the software that makes possible the construction and maintenance of these customized portfolios. Even if advisers don’t know what’s going on in the black box, the fruits of technology’s ongoing contribution to the advisory business should be part of this year’s Thanksgiving ritual.

Volatility underscores the value of advice. The pandemic and this year’s market turbulence have led more and more clients and prospects, young and old, to appreciate the value of professional financial advice. When someone needs a solution for a specific problem, a sound recommendation or guidance for the future, nothing beats a real, live financial adviser — and advisers should be thankful that the public increasingly recognizes that.

Happy Thanksgiving.