Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the release of the CFP Board’s newly proposed Code of Ethics and Standards of Conduct for CFP professionals, which would further expand their scope of fiduciary duty to virtually all forms of financial advice.
Also in the regulatory news this week was an interesting public comment letter from the CFA Institute about the SEC’s potential consideration of fiduciary rulemaking, suggesting that the starting point would simply be to regain control of advisor titles and labels (and require anyone who even holds out as a financial advisor to be subject to the Investment Advisers Act of 1940). And in the meantime, the state of Nevada just passed a “surprise” piece of legislation that, in just over a week, will suddenly require all financial advisors in Nevada – including those at RIAs and broker-dealers – to be subject to a fiduciary duty when working with clients, regardless of whether it’s a retirement account or not.
From there, we have a few practice management articles this week, including: how developing “Core Values” for your firm can help you figure out how to filter out who are the right clients, the right employees, and the right opportunities for the business to pursue; why it’s so crucial to have a personal support network as a financial advisor that can keep you positive and motivated when the inevitable business challenges come; and why it’s crucial for advisory firm owners and the entire leadership team to establish a clear and consistent vision for where the business is going (and then work to keep aligned on that vision).
We also cover a few articles about the intersection of financial planning and cash flow/spending behavior, from why it’s important to not just analyze a client’s household cash flow but examine the underlying financial habits they represent (e.g., how the client makes decisions about large purchases, and whether they save intermittently or automatically), to the reason why behavioral biases mean in practice consumers tend to fare better contributing to a Roth 401(k) than a traditional 401(k), and how the tendency for one member of a couple to be a “spender” can trigger marital strife (though notably, being married to a “tightwad” does not typically trigger marital conflict!).
We wrap up with three interesting articles, all focused around broader industry trends: the first looks at how the rise of no-load funds and increased transparency were associated with an explosion in the adoption of mutual funds (and ETFs), while the still-commission-based and still-transparent insurance industry has seen its sales drop by almost 50% in the past 30 years, and whether a new company called Assurance (which aims to be the Morningstar of life insurance policies) can help to change the trend; the second examines how, despite an incredible 8-year bull market, most of the financial services industry is not very exuberant, or is outright gloomy, which appears to be a result of the fact that almost all the gains of the bull market have gone to just Vanguard, while the rest of the asset management industry has failed to participate in the rally; and the last is an investigative report from Reuters, which finds that FINRA is struggling to rein in a subset of broker-dealers who continue to actively hire brokers with problematic disciplinary records, raising the question of whether FINRA is even capable of fully executing on its investor-protection mandate, and whether state securities regulators may try to expand their oversight of broker-dealers to fill the void.
Enjoy the “light” reading!
source https://www.kitces.com/blog/weekend-reading-for-financial-planners-jun-24-25/?utm_source=rss&utm_medium=rss&utm_campaign=weekend-reading-for-financial-planners-jun-24-25
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