Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the SEC’s latest 2017 list of RIA exam priorities, which for the first time will explicitly include delving into so-called “electronic investment advice”, which appears to include both “robo” advisors, and heavily tech-automated human advice services (e.g., Vanguard Personal Advisor Services and the future Schwab Intelligent Advisory).
Also in the news this week is a lot of discussion of changing share classes for mutual funds and variable annuities, as the industry approaches the home stretch for the rollout of DoL fiduciary – including the rise of a new T-class mutual fund share that will likely replace A-shares together over time (with a uniform lower upfront commission across all types of funds), the decline and near disappearance of L-share variable annuities, and the emergence of a new I-share (advisory share class) variable annuity (which represented more than 50% of all new variable annuity filings last year).
From there, we have a few articles on practice management around the theme of hiring and retention, including a look at how it’s just as important to create a career development plan for employees as a financial plan for clients, a discussion of whether financial incentives are really an effective motivation (or not), and how crafting a bona fide career track is becoming essential for long-term employee retention.
There are also a couple of technical planning articles this week, including a discussion of why it is that almost no retiree can actually start Social Security right at age 62 (instead, it’s 62 and 1 month in most cases), the issues to consider when weighing an NUA distribution decision, and the role advisors can play in helping clients coordinate financial surrogates in the event of incapacity (given that more and more companies are coming up with their own process to name surrogates, which means there may be multiple people sharing the role with a ‘traditional’ attorney-in-fact under a durable Power of Attorney!), and what to watch out for regarding investment issues when reviewing a new client’s tax return.
We wrap up with three interesting articles on the theme of charity: the first is a look at how behavioral finance research is now being applied to our charitable giving (and finding that we can be just as irrational about our charitable endeavors as our investment portfolios!); the second delves into the reality that in some cases people give for bona fide charitable purposes, and in others it’s for social recognition, and while arguably the “true” measure of charity is whether you give so much you must actually make your own sacrifices, the more effectively a financial planner helps a client live modestly, the more room there is to give without further impinging on lifestyle; and the last is a look at the rise of pro bono financial planning in particular, with a growing number of financial planners engaging in such activities (often through local FPA chapter activities), and the rise of the Foundation for Financial Planning, a grant-making organization that supports pro bono financial planning primarily through donations from financial planners.
Enjoy the “light” reading!
source https://www.kitces.com/blog/weekend-reading-for-financial-planners-jan-14-15-2/?utm_source=rss&utm_medium=rss&utm_campaign=weekend-reading-for-financial-planners-jan-14-15-2
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