DOL Releases Its Proposed Fiduciary Rule

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Regulatory/Compliance

 

The Department of Labor this week came out with its fiduciary rule proposal, one that would require any advisor who works with a plan sponsor, a participant in a retirement plan, or an IRA owner to act in the best interest of that client. InvestmentNews quotes DOL Secretary Thomas Perez as saying, “The rule is intended to provide guardrails but not straightjackets” for advisors. Read more below. Also, the SEC’s Investor Advisory Committee has recommended establishing a consolidated database of professional and disciplinary information on a variety of financial professionals, registered and unregistered. The recommendation relates to concerns regarding the financial abuse of elders. Details are in a story at Financial Planning, below.

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Millennial: Advisor Practices ‘Won’t Work For Us’

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Practice Management

 

Who better to tell advisors what millennials want than a millennial? Marketing strategist Jessica Lynn Rabe, in a blog post at InvestmentNews, provides a rundown of what millennials are concerned about and what they want from advisors. What advisors are doing now won’t work for her generation, she writes. A link to her post follows. Also, perhaps it’s not so much who “won” in the J.D. Power & Associates 2015 study in the area of investor satisfaction (Edward Jones and Fidelity), but what investors cared most about in firms and their advisors. Edward Jones scored well in the investment advisor and investment performance categories, and Fidelity’s strengths were account information and account offerings, according to an article at RIABiz. Read more details below.

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8 Ways to Immediately Impress a Prospect

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Your goal in a prospect meeting is to make a good first impression. And the good news? People form judgments about us in a matter of seconds. That means, if you play your cards right from the start, you’re 90% of the way toward winning the account.

 

Here are eight ways to make the most of those first precious minutes of your prospect meeting:

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FirstPoint, Fidelity Work Out Referral Arrangement

firstpoint

Sales and Marketing

 

Marty Bicknell of FirstPoint Financial plans to boost the firm’s mass affluent business through a referral relationship with Fidelity. According to an article at RIABiz, Fidelity will encourage its RIAs who use Fidelity Institutional Wealth Services to refer smaller, “uneconomical” investors to FirstPoint. In return, they’ll receive 35 basis points on revenues derived from the referred client’s assets. Read more details in the RIABiz article that follows. Also, if your marketing message tends toward being friendly and reassuring, you may want to try a different tack. Gail Graham of United Capital writes about a marketing study in which consumers evaluated three industry advertisements. The one that used honesty and humor — poking fun at the industry — came out on top. Read her column at Financial Advisor, below.

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SEC Reviewing 12b-1 Fees

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Regulatory/Compliance

 

An SEC official said this week that the agency is “looking at the whole complex” of 12b-1 fees in its exam cycle, ThinkAdvisor reported. The remarks came from Marc Wyatt, deputy director of the SEC’s Office of Compliance and Inspections and Examinations, after he participated on a panel at a District of Columbia Bar Association event. Also, an advisor seeking advice on how to handle a late disclosure on his U4 was told to “do it as soon as possible.” In a Q&A at Financial Planning, compliance columnist Alan Foxman told the advisor that there might be an additional sanction imposed for waiting to disclose a lien on his house by the IRS, but he noted: “The longer you wait, the worse it will be.” A link to the story follows.

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Culture ‘Is Everything’ For An Advisory Firm

Image: Kevin Garrett

Image: Kevin Garrett

Practice Management

 

Culture plays a huge role in the success of advisory firms, according to consultants in the industry. “You just have to stay true to it,” says Angie Herbers, a consultant quoted in a Research Magazine cover story. The article gives examples of cultural innovations — some that may be considered a little eccentric — at three firms: Buckingham Asset Management, Abacus Planning Group, and oXYGen Financial. Read more below. Also, many firms continue to reassess their fee models, particularly with the emergence of “robo-advisors.” An article at Financial Planning delves into some of the research on pricing models, including AUM fees. A survey by the publication found that a quarter of fee-only advisory firms said they’d changed their fee structure in the past year. A link to the article follows.

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Competing Successfully in the Advice Jungle

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It’s a jungle out there. Dozens of financial service providers compete for your clients and prospects every day. So, how do you differentiate yourself from the rest of the pack?

 

Based on my conversations with successful financial advisors over the years, I have uncovered the following competitive “principles”:

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RIA Launches App To Boost Communication With Client, Prospects

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Sales & Marketing

 

Many smartphone and tablet users are enamored with apps, so it only seems natural that an RIA would develop an app geared toward increasing connections between the firm and its clients and prospect. “My Money Page,” an app launched by Gerber Kawasaki Wealth & Investment Management, allows users to do budgeting, track savings and retirement, and view bank and investment account information, among other things, according to an article at ThinkAdvisor, below. Also, if you know what high net worth investors think, it’s easier to tailor your message to them and address their concerns. In a column at Wealth Management, Mindy Rosenthal of the Institute for Private Investors provides a list of tips that affluent give to their peers on selecting and working with an advisor. Rosenthal then gives suggestions to advisors on how to respond. A link to the column follows.

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Guidelines On Client Proxies

Regulatory/Compliance

 

Proxy-voting season can raise a lot of questions for advisors — and clients. Recent guidelines from the SEC say that advisors don’t have to vote proxies on behalf of clients, according to a Financial Planning story. But clients need to know what an advisor’s policy is. Experts on proxy issues and financial advisors weigh in on the topic. Also, Michael Kitces argues against a uniform fiduciary standard for brokers and advisers, saying that the SEC simply needs to enforce its existing rules, namely one that states that “any advice that is beyond being ‘solely incidental’ to brokerage services would require investment adviser registration.” That would differentiate between “salespeople” and “investment advisers.” He explains his views in a post at Nerd’s Eye View, below.

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Report: Advisor Productivity Is Up

Image: Sean MacEntee / Flickr

Image: Sean MacEntee / Flickr

Practice Management

 

Good news on the advisor front: Productivity is up. That’s according to a State of Retail Wealth Management report from PriceMetrix, which finds that the average advisor saw revenue grow faster than assets. Details of the study are reported in an article at Financial Planning. Other highlights: Advisor assets and revenue climbed to record highs and fee-based pricing rose. See the story link below. Also, consultant Julie Littlechild digs into some of the factors that make advisors highly successful, based in part on a poll of 250 advisors. The first two characteristics on the list: Great advisors have CLARITY around business and personal goals, and great advisors see the POSSIBILITY of great achievement. Read more attributes in Littlechild’s post at her website, JulieLittlechild.com.

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