It’s not easy being an independent RIA these days. Healthcare and compliance costs seem to skyrocket every year. Expensive technology requires constant updating, and with the growing popularity of robo-advisors you now face “non-human” competition– from algorithmic advice that costs 75% less!
President Obama this week threw his support behind the Department of Labor’s plan for a fiduciary rule for retirement plan advisors, saying the lack of a uniform standard is “hurting millions of working and middle-class families.” Reaction to the announcement was mixed. The story is at Financial Planning. Also, fines imposed by FINRA jumped 125% in 2014 compared to 2013, according to a law firm report. ThinkAdvisor provided details of the analysis, which pointed to a huge increase in fines assessed for cases involving seniors and retirees. See the article below.
Most advisors don’t like to discuss the emotional, mental and physical toll their job places on them — especially during shaky market conditions. But Carl Richards notes that now (a time of relative calm) is when advisors need to take time to “reboot” and do some “mental housekeeping” to determine if they could benefit from professional help or perhaps a physical outlet. His column is at Morningstar Advisor. Also, Allan Roth points out some of the “illusions” that advisors may use to make a client’s investment returns look rosier than they really are – such as the use of skewed benchmarks. It’s important for advisors to be aware of the misleading practices being used and know how to discuss them with clients. Roth’s column is at Financial Planning.
Sales & Marketing
New clients and prospects are often apprehensive during that initial meeting with an advisor. So how do you put them at ease and get them to talk about their financial goals? Financial Planning has put together a helpful list of ice breakers to get your clients talking: ideas ranging from asking about a client’s bucket list to simply getting a client to “tell me about yourself.” A link to the story follows. Also, financial advisor Josh Brown, who has 100,000 followers (or more, by now) on Twitter, says the best thing that has come from tweeting and blogging has been that “everyone who works here came as a result of my social media use or my partner Barry’s.” In a Q&A at InvestmentNews, Brown talks about when he finds time to tweet and what social media has done for his business. See the link below.
Serving a high net worth client base often comes with an unspoken rule: help the next generation. While your clients’ children may not meet your million-dollar minimums, you can still keep them happy – and have time to serve your bread and butter accounts.
Investor advocate groups are continuing to work on gathering support for a proposed fiduciary rule expected soon from the Department of Labor. A mass email invitation to a meeting scheduled last Friday reads, in part, “We will discuss in greater detail the problem under the existing regulatory system and the expected solution …” according to an article at Wealth Management. A link to the story follows. Also, protecting yourself and your firm from online hackers may seem like an overwhelming undertaking, but according to a speaker at the recent T3 conference, “it’s pretty simple to get your firm protected from cyberattacks.” A story at Financial Planning provides details of the panel discussion and lists four areas advisors can focus on, including getting help from an outside professional. Read more below.
As in a marriage, conflict will inevitably crop up in an advisory firm partnership. The key is to recognize and prepare for it by putting a decision-making or conflict resolution process in place. That is one of the issues explored in a white paper on “Best Practices in Investment Advisory Partnerships,” written by advisory firm owners who went through a problematic merger. Michael Kitces writes about the white paper findings in a blog post at Nerd’s Eye View. See the link below. Also, consultant Timothy Welsh provides a rundown on the recent T3 conference in Dallas, from an eMoney demo (in the wake of its sale to Fidelity Investments) to the flood of announcements from tech companies serving the advisory space. He also mentions the launch of AutoPilot (by CLS Investments and Riskalyze), an automated asset management platform that plugs into an advisor’s website. His column is at RIABiz.
Sales & Marketing
The easy part about having a niche is defining it; the tough part is building a business around that specific market. So says Julie Littlechild in an article at InvestmentNews. How do you determine if your niche strategy is effective? See if you can give an affirmative reply to the five questions she outlines, beginning with: “Does your website make a bold statement about your niche?” See the link below. Also, if you’re having trouble getting clients to commit to a meeting with you, Dan Richards suggests you create “urgency” around your request. For example, one advisor’s approach is to focus his initial meetings on how to reduce taxes. Richards offers other “hot button” ideas as well in his column at Advisor Perspectives, below.
The Baby Boomer retirement wave is in full swing. Each day for the next 20 years, an average of 10,000 Boomers will turn 65. Many will choose to leave their jobs and retire – or will be transitioned, by their companies, into retirement.
Having a tough time building referral relationships with CPAs? You’re not alone. The CPA referral niche can be a tough nut to crack.
CPAs rightly recognize that they’re in the stronger bargaining position when it comes to the financial advisor-accountant strategic relationship.