RIA Central Digests for 10/01/2014

Practice Management

 

Bill Gross’ abrupt move from PIMCO to Janus Capital has unleashed a torrent of stories examining the “why” and “what’s next?” In a story at Financial Planning, industry experts weigh in on what the change in leadership means for advisors and for PIMCO competitors. Ron Rhoades call the future for PIMCO “very, very cloudy.” Also, over the past five years, leading firms made decisions in three key areas that help them boost AUM: controlling expenses, exploiting human capital and technology, and competing on value, not price. Pershing’s Mark Tibergien writes about these findings, which came from a study by FA Insight and Pershing, in an article at Investment Advisor magazine. Tibergien notes that the leading firms grew their revenue at twice the rate of their peers.

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5 Time-Saving Tips to Add An Extra Day to Your Week

How would it be if you had an extra day in the week just to get stuff done?

 

Actually you already have that “extra day” – you’re just wasting it. Saving time is simpler than it seems; it’s really all about finding ways to stay focused and resist distractions.

 

In general, people cram their daily to-do lists with things they never intend to get done. It becomes a “wish list” instead of an actual daily game plan. By limiting the number of daily tasks to what you actually plan to do, you’ll use your time more efficiently, adding at least an hour to each day, or the equivalent of an extra day to your week, or nearly two months to your year! Think what that could do for your long-term goals?

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RIA Central Digests for 09/30/2014

Sales & Marketing

 

If you want to find out what your clients like anddislike about your practice, you have several options. You can conduct surveys, assemble a client advisory board, or ask them face to face. An article at Wealth Management goes over these methods and offers some tips: ask for honest responses, and when you get suggestions, make sure to act on them. Also, Gail Graham, chief marketing officer at United Capital, points out two online “tests” that can help you evaluate your marketing. One helps you zero in on your brand personality and the other helps evaluate the effectiveness of your website. Her column is at Financial Advisor.

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RIA Central Digests for 09/25/2014

Regulatory/Compliance

 

A proposed Finrarule requiring more stringent background checksfor new broker hireshas been sent to the SEC. The rule calls for firms to institute procedures to verify the accuracy of an applicant’s U4-form information. The details are in a story at InvestmentNews. Also, questions about whether there might be a “blind spot” in the viewing of compliance records in regulatory databases prompted a conversation between Jack Waymire, founder of Paladin Registry, and Brian Hamburger, the founder and chief executive of MarketCounsel. That Q&A provides an educational overview of regulatory agencies, areas of jurisdiction, licensing, examinations, and definitions of terms such as “investment advisers.” As far as a blind spot: yes, possibly. The story is at RIABiz.

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RIA Central Digests for 09/24/2014

Practice Management

 

America’s “modern families” (defined as those that are NOT a married couple with a child or children under 21 years living at home) are in need of financial advisors’ expertise. According to a survey by Allianz, three-quarters of those families are not working with an advisor and more than half have not received a professional’s financial advice. Read more in a story at InvestmentNews. Also, Bob Veres decides to test and evaluate two risk-tolerance tools: Riskalyze and FinaMetrica. Read about the results of his quest in his column at Financial Planning.

 

Goodbye Cleavers, Hello Modern Family
New Family Structures Mean New Opportunities To Serve Unique Needs
By Liz Skinner
Source: InvestmentNews

 

The famous TV family of the 1950s, the Cleavers, have faded into history, so it’s time for advisers to find a way to help America’s modern family. Only 20% of America today is part of a “traditional” family like the one portrayed in the show “Leave it to Beaver.” A new survey suggests there’s a large potential market for advisers who can create a profitable business model to offer financial help to single-parent households, multigenerational households, same-sex households, boomerang families, blended families and everything in between.

 

Read the rest of the story…

 

Risk Tool Smackdown: FinaMetrica vs. Riskalyze
By Bob Veres
Source: Financial Planning

 

Let’s say about a year from now the S&P 500 were to drop 18% in one day, the result of a terrible Wall Street mishap. Over the subsequent three months, the index would give up just under 40% of its value. Naturally, I’d worry about how planning clients will react. One client who I’m especially worried about is, well, me. Will I panic and retreat to money market funds? Will I stoically remain on course? Or will I cackle with excitement and urge my advisor to throw all the chips on the table at the bloody bottom of the wreckage?

 

Read the rest of the story…

 

Breakaways/Aspiring Advisors

 

The news that Merrill Lynch dismissed an elite advisor team for allegedly advising clients to invest in a hedge fund not on the brokerage firm’s platform created a lot of buzz in the industry. The takeaway at RIABiz is that the firing of the team may have been to create “fear within” for would-be breakaways. A link to the story follows. Also, broker-dealers are heading West in an effort to capture some of the new wealth in the region. An article at Financial Planning notes that Raymond James, Baird and Wells Fargo are moving into Seattle, Silicon Valley and Southern California. This means a boost in advisor recruiting efforts as well.

 

How Merrill Lynch’s Divorce Of Its Own $2.5-Billion Team Shows Just How Fed Up The Wirehouse Is With RIA-Bound Breakaways
By Brooke Southall
Source: RIABiz

 

In what could well be an emerging trend of making a final goodbye out of what used to be just a wrist-slapping infraction, Merrill Lynch fired an advisor team from its elite Private Banking and Investment Group for advising clients on the purchase of a hedge fund not on the Merrill Lynch platform. Stephen S. Brown and James P. Goetz, of Pittsford, N.Y., who managed about $2.5 billion of assets, left Merrill Sept. 9, according to Reuters and InvestmentNews.

 

Read the rest of the story…

 

Looking For Growth? Go West
By Andrew Welsch
Source: Financial Planning

 

To boost AUM and profits, broker-dealers are going in a new direction: West. Firms like Raymond James, Baird and Wells Fargo are pursuing expansions in Seattle, Silicon Valley and Southern California, where many broker dealers historically have had little or no presence. The firms are being pulled by the allure of new wealth creation in the region, promising rich rewards for those willing to put forth the additional effort. “Wealth management firms are going to gravitate where the money is,” notes Bill Butterfield, research analyst at Aite Group.

 

Read the rest of the story…

 

Retirement Planning

 

A spending policy must be established when a client needs to take distributions from an investment portfolio. Jan Holman, director of advisor education at Thornburg Investment Management, describes two types of policies: a lifestyle spending policy and an endowment spending policy (like the ones used by many college and university endowments). She writes about the two approaches in a column at Financial Advisor. Also, the answer to a rollover question involving after-tax money in an IRA has been resolved by the IRS. When taking a distribution, you CAN take the after-tax money and convert to a Roth IRA tax-free. The details are in a story at ThinkAdvisor.

 

Sustainable Spending For Retired Clients
By Jan Holman
Source: Financial Advisor

 

Once you decide that your client needs to supplement her income by taking distributions from an investment portfolio, you need to choose a spending policy. A spending policy is the method for determining how much can be withdrawn from the investment portfolio on an annual basis without depleting the principal too quickly. There are two kinds of spending policies: the lifestyle spending policy and the endowment spending policy.

 

Read the rest of the story…

 

IRS Finally Answers After-Tax IRA Rollover Question
By Melanie Waddell
Source: ThinkAdvisor

 

Advisors take note: the Internal Revenue Service on Thursday issued long-awaited guidance on the allocation of after-tax amounts to rollovers. IRA guru Ed Slott told ThinkAdvisor on Thursday that the IRS’ guidance answers one of the most common, if not the most common, question that he gets from advisors. The question: “A lot of people have after-tax money in a 401(k) — they have pretax and after-tax money. When they take a distribution, can they take the after-tax money and convert to a Roth IRA tax-free?” The IRS’ answer: yes.

 

Read the rest of the story…

 

 

How to Market Your Practice to Grandparents

happy_grandparentsIf you’re like many advisors, you spend ample time talking to clients about their families. One veteran advisor in Omaha related that his portfolio reviews consisted of a 10-minute financial review, followed by 30 minutes or more of chit chat about his clients’ grandkids.

 

But grandchildren can become more than just small talk for your business – they can fuel your practice growth. In this ultra-competitive era where defining your brand is critical, doting grandparents represent an attractive demographic for your advisory practice.

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RIA Central Digests for 09/23/2014

Sales & Marketing

 

If your prospect meetings are ending in disappointment, it may be that you’re pitching instead of negotiating. A negotiation expert interviewed by ThinkAdvisor explains the importance of input (from a prospect) rather than output (from an advisor) at that first meeting. He shares other tips on engaging a prospect, too. Also,it turns out that social media is not the way to reach out to millennials, according to a recent study by BNY Mellon. Less than 1 percent of the millennials surveyed said they wanted financial institutions to contact them through social media. Forty percent preferred contact through a website/email. Read the details in a story at Wealth Management, below.

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RIA Central Digests for 09/18/2014

Regulatory/Compliance

 

A recent survey by the North American Securities Administrators Association finds a low incidence of cybersecurity attacks among small and mid-sized RIA firms, but tech experts say those results don’t tell the real story. The founder of a cybersecurity firm says the findings indicate a “very dangerous false sense of security.” Read more in a story at Wealth Management. Also, state securities regulators say reforming expungement rules will be a top issue this year. The topic was addressed at the NASAA annual conference earlier this week. The story is at InvestmentNews.

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RIA Central Digests for 09/17/2014

Practice Management

 

As assets grow, so do clients, employees and the need to put together standard operating procedures that keep a firm operating efficiently. What happens when you bring on a new hire or have a lone employee in the office on a snow day? Helen Modly of Focus Wealth Management describes how to identify “mission-critical” activities and create SOPs that accurately capture the process. Her article is at Morningstar Advisor. Also, advisors confront a variety of difficulties when they go through an acquisition, and an Aite Group survey finds that advisors are “very satisfied” in only about 25% of the cases. Client retention was reported as the most difficult challenge. Read the details in a story at InvestmentNews, below.

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RIA Central Digests for 09/16/2014

Sales & Marketing

 

Sometimes advisors don’t recognize their marketing “sins” until someone points them out. In a column at WealthManagement.com, marketing strategist April Rudin lists seven common sins that advisors commit, and offers pointers on how they can change their ways. The first sin: Aiming at everyone. Also, Abby Salameh, chief marketing officer for Private Advisor Group, has advice on how to walk that thin line between getting personal and too personal with clients, particularly because the Internet has blurred the rules. “Get personal — not private,” she writes. A link to her column at RIABizis below.

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