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Must-Read Finance Weekly Roundup

Here is a roundup of this week’s must-read news for financial advisors:

Practice Management

What goes up … you know the rest. The question is, do you have a client communication strategy in place for when a crash occurs? John J. Bowen Jr. of CEG Worldwide, in a column at Financial Planning, notes that during the 2001 market drop, advisers who focused on client contact “captured 30 times as many additional assets as colleagues who focused solely on investments.” Read the details below. Also, an InvestmentNews annual survey shows a year-over-year decline in revenue for the top 25 independent broker-dealers — the first decline since the stock market crash of 2008 and 2009. Only eight of those top firms posted revenue growth in 2016, the publication reports. Read the full story below.

Crash course: How to increase AUM in a market drop

By John J. Bowen Jr.

Source: Financial Planning

When the Dow closed above 20,000 in January, it was big news, even though many wealth managers pointed out that it was just another number. But that comment did not register with many would-be stock buyers. When the stock market is doing well, investors tend to feel giddy. A rising market seems to foster a feeling that the market will certainly rise some more, even though that doesn’t make a lot of sense. I’m no market prognosticator, but here is something I can promise you: At some point stock prices will dive. That begs the question: How ready are you for client questions and demands the next time the market plummets?


Independent broker-dealers hit a wall

By Bruce Kelly

Source: InvestmentNews

As commission revenue continued its decline in 2016 and headwinds from regulators stiffened, the independent broker-dealer industry hit a wall, with the top 25 firms — those with roughly $250 million and more in total revenue — collectively reporting a year-over-year decline in revenue of 1.3%.


Breakaways/Aspiring Advisors

There may never be a “perfect” opportunity for a breakaway advisor, so should the advisor settle for something less? Mindy Diamond of Diamond Consultants discusses this conundrum in a column at WealthManagement.com. The process should start with three questions, she says: Just how much pain are you in? Just how motivated are you to build something new? Just how much do you really want what a new opportunity will offer you? Read her column below for details. Also, a partnership between the Financial Planning Association and FP Transitions is aimed at providing information and support to next-Gen advisors who want to take over planning practices, according to Financial Advisor. Below is a link to the story.

On the Fence About a Move?

Take stock of what is most important to you at a firm and be willing to be flexible in the areas that ultimately do not matter as much as you thought.

By Mindy Diamond

Source: WealthManagement.com

Advisors have more opportunity than ever to build the business that they envision. Yet, with all of the different models to choose from within this greatly evolved landscape, we find many are still searching for a utopian opportunity that doesn’t exist. If an advisor is still unable to check off every item on his wish list, does it make sense to hold out for perfection? Or should one be flexible in his expectations and choose a better, albeit imperfect, solution?


FPA Announces Next Gen Transitions Partnership

By Christopher Robbins

Source: Financial Advisor

The Financial Planning Association announced that it is joining with FP Transitions to aid next generation advisors with information and support as they take over planning practices. Under the deal, which makes FP Transitions the “Official Partner of the Next Generation of Financial Planners,” FPA members will be able to access FP Transitions content and thought leadership.


Retirement Planning

Target-date funds saw another strong year of inflows in 2016, according to a recently released report by Morningstar. “Assets in the funds have increased each year since 2008, when the financial crisis wreaked havoc across the board.” In addition, target date fund fees have continued to decline. Read answers to a sampling of the 20-plus questions covered in the report by following the link below. Also, Craig L. Israelsen explains how younger workers can construct their long-term path to a prosperous retirement by following some simple investment strategies. Two of his pointers: Start investing early in life and set a goal to invest 10% a year. Read his full column at Financial Planning and share the wisdom with your young clients.

Answers to Your Target-Date Fund Questions

By Jeff Holt

Source: Morningstar

Morningstar recently released its annual report on target-date funds, which continue to gain steam as an all-in-one investment for workers who are saving for retirement. The funds’ clear outlook for growth has resulted in an ever-changing landscape, as target-date managers vie for market share by attempting to set themselves apart from one another. This year’s report highlights the major trends and developments in the target-date fund space by addressing some of the questions most frequently asked by investors, investment consultants, and the like.


Convincing young clients to save earlier

By Craig L. Israelsen

Source: Financial Planning

This article is intended for you to share with your young clients to help them see the long-term financial picture for American workers. It could be titled “This Is Your Life,” and it goes like this … You start working at age 25 making $35,000. (Hopefully, you will actually make more at the start, but that figure is not unrealistic for some 25-year-olds, so let’s go with that for now.)



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