Advisors can talk to clients about their spending — without actually having them disclose what they’re spending — by producing an illustration from the client’s tax return, explains Mitch Anthony in a Financial Advisor magazine column. He calls it the “Owe-Grow-Live-Give Illustrator,” which categorizes the four things people do with their money. From there, an advisor can discuss with clients how they view their current spending as well as where they would like to be. See the link below. Also, as you spring clean your office, don’t ignore your technology systems. Dan Skiles, in an article in Investment Advisor magazine, suggests firms start by reviewing all their stored data, “especially data that is readily assessable on servers and cloud applications.” Read the details below.
Show Clients Their Spending Habits
By Mitch Anthony
Source: Financial Advisor magazine
In my last column, we discussed the cash-flow conundrum faced by so many advisors whose clients want to turn a blind eye to their spending patterns and resist a granular examination. Though many clients may not want to know the reality of their situation, they need to know where they are financially. For me, this dilemma was one that needed to be solved in a simple manner. For those planners who would like a more subtle approach for illustrating the impact of spending before actually conducting a detailed cash-flow analysis, I’ve devised a non-confrontational method that requires nothing more than a tax return to produce an illustration.
Where to Start Tech Spring Cleaning
By Dan Skiles
Source: Investment Advisor magazine
Spring is a welcome time of year. Temperatures start to warm up, we have longer days, and lots of plants and flowers transition out of their dormant state. For advisors, spring also brings Tax Day (April 18 this year), after which they should have more time for other tasks and items. This is also the time of year when “spring cleaning” occurs, whether it is for your home or business. You can apply the same mindset to your technology — and it is often well overdue.
As a way to attract more breakaways and RIA firms, Dynasty Financial Partners is offering to purchase a percentage (up to a maximum of 10%) of a firm’s revenue stream, according to Financial Planning. But Dynasty CEO Shirl Penney noted, “We’re not getting in the business of buying RIAs.” See the full story below. Also, the CFA Institute is considering changing its exam to include topics such as artificial intelligences and “big data,” according to Reuters. A CFA Institute official said investment managers are increasingly gathering and analyzing large amounts of data to help guide their investments, but those processes aren’t covered in the exam. Read the full story below.
Dynasty ups the ante in fierce competition to partner with RIAs
By Charles Paikert
Source: Financial Planning
Dynasty Financial Partners is upping the ante in the bruising battle to sign on breakaway brokers and RIA firms. The industry’s leading platform provider, which is locked in fierce competition with industry rivals such as HighTower Advisors, United Capital and Focus Financial Partners to align with advisory firms, is offering RIAs a way to monetize a portion of their firm by purchasing a percentage of their revenue stream.
CFA Institute mulls adding ‘big data’ to financial analyst exam
By Trevor Hunnicutt
The CFA Institute will weigh changing its formidable exam to tackle artificial intelligence and the “big data” investors cull for an edge in markets, a senior official from the U.S. accrediting group said on Tuesday. The institute’s Chartered Financial Analyst accreditation is seen as the gold standard for everyone from wealth advisors to Wall Street analysts.
Retirement planning is no longer a battle of the human advisor versus the robo (i.e., automated investment platforms) but the blending of both into the “cyborg,” according to a column at Reuters. And that can be a good thing. Michael Kitces, at a recent Morningstar conference, said automated investment platforms free up advisors to provide more holistic advice to clients, the publication states. In addition, hybrid cyborg services, such as those offered by Vanguard and Schwab, are experiencing rapid growth. Read the full story below. Also, people who fall behind in their retirement savings do have options for catching up. An employee age 50 or older at the end of the calendar year can make an annual catch-upcontribution of up to $6,000 (2017) to a 401(k), notes an article at Napa-net (National Association of Plan Advisors). The article lists six helpful pointers for plan advisors regarding catch-up contributions.
Future of retirement planning belongs to the cyborgs
By Mark Miller
Who will help you plan for retirement – a robot or a cyborg? Pundits have been saying for some time now that the future belongs to “robo-adviser” – automated portfolio services that use algorithms to manage investments. The robo-services have attracted interest as a way to deploy low-cost advice, but retirement planning guru Michael Kitces thinks the real winners will be “cyborgs” – human advisers aided by advanced technology.
Catching Up on Catch-Up Contributions
By Nevin E. Adams, JD
There are lots of reasons why people get behind in their retirement savings – and one very helpful way that older workers can make up for lost time and catch up. Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions – up to $6,000 in 2017 in a 401(k), and that’s above and beyond whatever other limits may apply. This was a provision in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), made permanent in the Pension Protection Act of 2006. Still, Vanguard notes, in 2015 only about 16% of participants used this catch-up option when offered.