LPL To Launch Robo-Advisor Pilot Program

Practice Management

 

It was LPL Financial’s turn this week to add its name to the robo-advisor contingent. Dan Arnold, the firm’s president, said a pilot program for the automated investment platform will be launched over the next two months and involve 20 financial advisors. Read the story at InvestmentNews, below. Also, technology can help advisors run their practice more efficiently — if they can find the right tools. John J. Bowen Jr. of CEG Worldwide outlines some of the tools advisors can use to increase efficiency and save time. He categorizes them in several areas, including ways to track behavior and progress, and creating your “external brain.” His column is at Financial Planning, below. (NOTE: Michael Kitces’ post in the “Retirement Planning” digest this week includes a list of time-tracking tools for advisors. Readers weigh in with their favorites, too, so be sure to read the “comments” section in his post.)

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A Global Search For Clients Can Pay Off

Sales & Marketing

 

Working with foreign nationals who reside in the United States can be a lucrative niche, but it takes some knowledge of the political and economic circumstances of the client’s homeland as well as some patience. REP. talked with advisors who specialize in this niche to find out how they got started and what it’s important to know about this client base. See the article that follows. Also, Pamela Capalad, a 29-year-old certified financial planner, relies on the comfort of food to help ease a client’s anxiety over divulging financial information: It all starts with brunch. “The idea of getting to relax and have a meal with somebody just changes the conversation and changes the atmosphere,” Capalad tells Bloomberg. Her business, Brunch & Budget, is largely attracting people under age 35, and her revenue has increased by 69 percent, according to the Bloomberg article. Read more below.

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Who’s For And Against The Fiduciary Proposal

Regulatory/Compliance

 

If you’re trying to remember which financial and political groups are for or against the DOL’s proposed fiduciary rule, InvestmentNews has put together an at-a-glance chart that lists the parties and their stances. The 90-day comment period for the redraft of the proposal ended this week. A link to the InvestmentNews chart follows. Also, special events can be a worthwhile way to cement relationships with clients, but be aware of the compliance rules, points out an article at Financial Planning. Compliance issues can arise because of FINRA Rule 3220, the noncash compensation rule. Read more below.

 

Where Key Players Align In The DOL Fiduciary Fight
By Ellie Zhu and Mark Schoeff Jr.
source: InvestmentNews

 

As the proposal’s comment period ends this week, here’s a snapshot of some of the larger parties’ stances.

 

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The Dos And (Compliance) Don’ts Of Client Events
By Elizabeth McCourt
Source: Financial Planning

 

When advisors create distinctive special events for a select group of clients, the idea is fairly simple: If the experience is exceptional enough, it will create a bond that is so strong that it is worth whatever cost and effort the advisor puts in to pull off the event. Unfortunately, it’s unclear whether anyone has carried out a rigorous cost-benefit analysis to determine whether all this trouble actually pays off.

 

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RIAs Setting Revenue Record, Study Shows

Practice Management

 

Close to half of the firms that participated in Charles Schwab’s 2015 Benchmarking Study reported doubling their revenue since 2009, and the report shows that revenue and profitability are at all-time highs. An article at Financial Planning outlines the study results, noting that RIAs are also increasing their rosters of high-net-worth clients (investable assets over $500,000). Read more details below. Also, data show that merger and acquisition activity is poised to accelerate, but some practice owners and consultants say many advisors are still not ready to take the plunge. “The competition is intense, and our list of potential targets keeps getting shorter and shorter as we get deeper into discussions,” Derek Holman, the managing director of a California firm, tells Financial Advisor IQ. A link to the article follows. In addition, Angie Herbers, who merged her consulting business with a marketing firm about a year ago, shares what she learned about the process. “The firm that emerges will be vastly different from the two businesses that merged together,” she writes. See her column at ThinkAdvisor, below.
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Olympic Training Techniques That Win Clients

Sales & Marketing

 

Many Olympic athletes use the mental training technique of visualization to reach their performance goals. This process can work for financial advisors as well, notes Dan Richards, in a column at Advisor Perspectives. An advisor named Susan, for example, used the technique during her tennis career and later applied it to her advisory role. She told Richards: “By visualizing successful conversations in advance, when talking to people I was more relaxed and found myself having much more comfortable and productive conversations.” Read more below. Also, trust is essential to an advisor-client relationship, but as Stephen Wershing points out, “you cannot deliver it,” and therefore it’s worthless as a marketing tool. Still, there are ways to “nurture its development,” writes Wershing, and things you can do to build that trust with clients. Read more in his post at The Client Driven Practice.

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Frustration with Investor Mistakes Leads to New Advisor Book

Ken WeberEvery financial advisor likely has moments of extreme frustration with clients’ poor understanding of investing. Ken Weber got so fed up he wrote a book about it.

 

In Dear Investor, What the HELL are You Doing? Smart and Easy Ways to Fix the Mistakes You Make With Your Money, Weber, a 20-year veteran financial advisor and president of Weber Asset Management in Lake Success, NY, pulls no punches. In echoing what many financial professionals are probably thinking – but reluctant to say out loud – he decries the many ways people act against their best financial interest.

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Minimizing Risk When An Employee Leaves

Regulatory/Compliance

 

One of the big fears with losing an employee is that he or she will walk out the door with all of your “secrets.” In a column at RIABiz, James Pooley, who is “very familiar with the fields of intellectual property, trade secrets and data security,” shares tips to minimize risk when an employee departs. Some involve legal documents and agreements, while others revolve around clear communication and focusing on ways to keep your talented employees happy. “Never skip the exit interview,” Pooley advises. Also, websites have become a common marketing tool for advisors, but they can quickly put you on a regulator’s radar if compliance rules aren’t being followed. In a column at Reuters, regulatory experts provide a list of questions for advisors to go over with a compliance officer to ensure the website has “the proper controls.”For example, “Is there a boilerplate disclosure at the bottom of every page of the site?” Read more below.

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A Close Look At Trends In Hiring, Compensation, Benefits

Practice Management

It helps to have an insider’s perspective when evaluating surveys, and Michael Kitces uses his industry insight when probing the results of the recent “2015 Trends in Adviser Compensation and Benefits” study (from FPA and Financial Advisor IQ). He homes in on the more notable findings, such as those involving employee lifestyle perks, hiring of financial planning staff, and outsourcing. However, he found data regarding compensation to be “muddled” and therefore difficult to draw clear conclusions. On the plus side, the study can be downloaded for free. See Kitces’ post at Nerd’s Eye View. Also, the transfer of family wealth from one generation to the next can catch advisors off guard – unless they’ve prepared for it. An article at InvestmentNews delves into the “great wealth transfer,” which is the $30 trillion that will be handed down from baby boomers to the next-gens over the next 30 years. The clincher: 66% of children fire their parents’ advisor after receiving their inheritance, an InvestmentNews survey shows. In the article, advisors discuss how they are preparing (or not) for the wealth transfer, and a client weighs in as well. In addition, some firms are using formal initiatives to assist advisors in working with heirs. A link to the story follows.

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Concentrate On Service, Not Advertising

Sales & Marketing

 

If you want to bring in new clients, don’t using advertising, just show people that you care and give them top-notch service. That advice comes from Dan Moisand, a principal at the firm Moisand Fitzgerald Tamayo, which has experienced an impressive growth rate over the years. He shares his “tip list” for business development in an article at InvestmentNews. Also, summer is often a good time to take a look at your practice and brainstorm ways to bring in new clients and improve your operations. Financial Planning does some of the legwork for you, providing a list of more than 30 ways to upgrade your practice. In the marketing area, some suggestions are: Don’t email like a robot, and rework your bio. Read more below.

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Lawsuit Against CFP Board Dismissed

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Regulatory/Compliance

 

A U.S. district judge this week threw out a lawsuit again the CFP Board brought by financial planners Jeffrey and Kimberly Carmarda. The judge “granted a motion for summary judgment and dismissed the case against the CFP Board,” according to an article at InvestmentNews. The suit involved the use of the “fee-only” label. A link to the story follows. Also, several trends involving aging and retirement have led to what some experts call a “perfect storm” for financial abuse of the elderly. An article at Financial Planning notes that those conditions include: an aging population, extended life spans, a rise in cognitive issues such as dementia, and a greater burden on people to finance their own retirements. The article outlines types of abuse and offers ideas on what advisors can do to help protect clients. See below.

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