Results for "Outside-IN"

Jul 19, 2019, 2:04 PM EST

Why a culture of compliance is critical


By Steve Gresham and Kevin J. Ruth

The financial industry's reputation was hit broadside by the financial crisis, eroding trust and opening the door for new industry players offering transparency, convenient service models and lower fees. We remain in a general environment of distrust. Regulators have attempted to address this loss of trust with proposals that set higher standards of conduct for companies and advisers. These efforts are especially timely, given the industry's aging client base that will require even greater care in the coming decades. The SEC's reform actions already face challenges from consumer groups determined to strengthen the standards at both federal and state levels. Some financial advisors support a fiduciary standard they believe will strengthen their industry's credibility and value. The more than 80,000 CFP professionals must incorporate the fiduciary duty when providing financial advice into their practices next year. States will continue... Read full post

Jul 18, 2019, 3:02 PM EST

The wealth management circle of life


By Mike Lover

It's no secret that there's $30 trillion that's expected to be passed down from baby boomer parents to their Generation X and millennial children over the next 30 years. This vast movement of wealth is reminiscent of the point in "The Lion King" when Mufasa told Simba that one day he would be heir. Like Simba, this next generation of wealth is bright-eyed with this news, but how do you prepare them to take it over in the right way? While the great wealth transfer presents a great opportunity, there's also the potential these assets may transition out of many advisory practices. Historically, beneficiaries have not remained with their parents' financial advisers after they receive an inheritance. Ten years ago, the generational transfer of wealth primarily went to one beneficiary per estate. Today, estates are being split between multiple beneficiaries — sometimes as many as 10 people. How can advisers set up their businesses to... Read full post

Jul 17, 2019, 11:40 AM EST

3 lessons for advisers from 401(k) and 403(b) class-action settlements


By Fred Reish

Retirement plan committees and financial advisers need to pay attention to class-action litigation and settlements to better manage their fiduciary risks. Some of the claims in those lawsuits are obvious; others foreshadow emerging issues that warrant attention and, at the least, an analysis of plan practices.Committees often rely on their advisers to keep them informed of new developments related to 401(k) and 403(b) plans, including advice about risk management. To help advisers fulfill those expectations, this article discusses the recent settlements in the Anthem 401(k) and Vanderbilt 403(b) cases.Law firm Schlichter Bogard & Denton represented the plaintiffs/participants in both cases. And both cases involved significant monetary settlements — $23.7 million and $14.5 million, respectively. However, the real lessons are in the nonmonetary terms of the settlement agreements. Following are some of those terms and my thoughts... Read full post

Jul 17, 2019, 11:35 AM EST

Bull market malaria and other advisory firm ailments


By Steve Gresham

The stock market's historic bull run is masking the impact of industry disruptions. Take a moment to check whether your organization is vulnerable to any of the following conditions.Bull market malaria. Markets seldom fall for no reason, and protracted declines like the 2000-01 tech wreck and the 2008-09 financial crisis were presaged by structural valuation problems that had been building for years. Being "surprised" by a bear market always seems pretty lame in hindsight. The lag between the recognition of declining fundamentals and the stampede of selling is much like a mosquito bite and the subsequent disease. In a bear market, you've already been bitten but you don't yet realize that you're sick. Do you know the impact a decline of 10% or more would have on client portfolios? Do your clients know? Prepare by taking precautions and vaccinating your portfolio if you're going to stay long in the investing jungle.Gray anxiety disorder: ... Read full post

Jul 15, 2019, 10:48 AM EST

Texting your clients? Read this first


By Dusty Russell

Are you texting your clients? Do clients text you? Are you sure you know the answers to these questions when it comes to your staff? If you haven't added texting as a component of your firm's communications mix, perhaps it's because you believe texting is only applicable for millennial clients and prospects. While it's true that "sending and receiving text messages is the most prevalent form of communication for American adults under 50," statistics indicate even those over 55 average 500 text messages a month. In other words, virtually everyone texts these days, and they want to be able to do so with you.Still, as an adviser, there are concerns about texting you must take into account before you can dive in and begin communicating with your prospects and clients this way. Below are some dos and don'ts to keep in mind.(More: Cybersecurity concerns over messaging apps grow as more firms enable adviser texting)​ ... Read full post

Jul 15, 2019, 2:58 PM EST

3 aspects of retirement affected by divorce


By Jamie Hopkins

Divorce rates for people age 50 and over have doubled since 1990, according to the Pew Research Center. Divorce can have both positive and negative impacts on happiness and finances.Michael Finke, chief academic officer of the American College of Financial Services, stated at a conference that recently divorced women between ages 60 and 65 are the happiest of divorcées, though married retirees are generally the happiest group on average. In terms of finances, especially in retirement, divorce creates new challenges and planning opportunities. The increase in divorced and single retirees has created a need for advisers to understand different retirement planning strategies. Social SecurityDivorce impacts American's largest retirement income source: Social Security. While a number of nuances surround Social Security planning and divorce, the general rule is that an individual can claim benefits based off their ex-spouse's work... Read full post

Jul 12, 2019, 2:40 PM EST

The SECURE Act: Completing an unfinished masterpiece


By Robert L. Reynolds

Congress is considering legislation that could ensure dignified retirements for millions more Americans. The House of Representatives recently passed the Setting Every Community Up for Retirement Enhancement Act, which builds on the best elements of today's workplace retirement savings plans while extending their benefit to millions more workers and their families. However, the bill is currently stalled in the Senate. The Senate should pass, and President Donald J. Trump should sign, one of the most broadly beneficial pieces of legislation in a generation.The SECURE Act would continue a decades-long march toward greater retirement security. Retirement savings plans such as 401(k)s, 403(b)s and individual retirement accounts have helped Americans prepare for dignity in their golden years, often with the support of their employers. The Pension Protection Act of 2006 turbocharged retirement savings by endorsing innovations such as... Read full post

Jul 11, 2019, 3:27 PM EST

Retirement has become the lynchpin of complete advisory practices


By Fred Barstein

Few advisers started their careers focused on defined-contribution plans like 401(k)s. Most DC practices grew from either wealth management or employee benefits firms leveraging relationships to cross-sell DC plans. But that is changing, with retirement becoming the lynchpin of a successful and comprehensive advisory practice.What happened, and why has retirement planning become so important?Going from a niche industry that rarely got national attention, retirement has become a key political issue — whether because of the lack of 401(k) coverage for almost half of American workers or fiduciary concerns. Eighty million baby boomers are expected to retire over the next 20 years and live longer, millennials are not confident Social Security will be available when they retire, and the sandwich generations struggle to save for their retirement while paying for their kids' college and supporting their unprepared parents.(More:... Read full post

Jul 11, 2019, 12:48 PM EST

Applauding the SEC's new approach to disclosure


By Dale Brown

The Financial Services Institute was pleased last month when the Securities and Exchange Commission passed Regulation Best Interest, a vital new rule that establishes a best-interest standard of care for all advisers on both the broker-dealer and registered investment adviser sides of the industry.We are on record as having strongly supported such a common-sense uniform standard — to be developed and overseen by the SEC — since 2009, before Dodd-Frank became law. We applaud the SEC's leadership in establishing a principles-based approach to protecting investors while at the same time preserving investors' access to financial advice.Another part of the rules package that was approved on June 5 has received somewhat less attention, but also represents a major step forward on a related and crucial investor protection issue — namely, making disclosure more effective.The outmoded "kitchen sink" model of disclosure has... Read full post

Jul 11, 2019, 12:45 PM EST

Your people are the secret ingredient for great tech. Don't leave them behind


By Eric Clarke

Running in the 2018 Boston Marathon was an incredible experience for me, not only as a personal accomplishment, but as an opportunity to run with a mentor and friend to support a great cause in the Foundation for Financial Planning. But while I ran, trying not to think about the frigid rain, blowing wind or the looming prospect of Heartbreak Hill, another story was unfolding, one I believe every advisory firm should take to heart.Last year, Desiree Linden and her teammate Shalane Flanagan laced up to compete in the marathon. But an hour into the race, Ms. Flanagan had to stop for an unexpected break. Ms. Linden could have seen her faltering teammate as deadweight and left her in the dust. But she understood that she didn't have to choose between winning and supporting her team. She waited for Ms. Flanagan, then helped her make up for lost time, slipping back into the leader's pack over the course of the grueling race.Not only did Ms.... Read full post

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