Home > Advisor Profiles > News Roundup: Advisor compensation, rebranding a practice, and the ‘NUA’ distribution strategy

News Roundup: Advisor compensation, rebranding a practice, and the ‘NUA’ distribution strategy

Practice Management

Studies by InvestmentNews and FA Insight on the latest compensation trends for financial advisors show that compensation has risen nearly 6.5% a year for the past two years for positions ranging from paraplanners to lead advisors, reports Michael Kitces in a post at his Nerd’s Eye View blog. The results show a rise in base compensation, which means that “after years of warnings, the talent shortage of financial advisors may finally be starting to play out,” he writes. Read more details in the post below. Also, advisors should take their clients through a series of five “relationship-building meetings” to ensure they receive the attention and services they need, according to John J. Bowen Jr., CEO of CEG Worldwide. In a column at Financial Planning, Bowen outlines these five types of meetings, starting with the “discovery” meeting. See the details below.

2017 Financial Advisor Compensation Trends And The Emerging Shortage Of Financial Planning Talent

By Michael Kitces

Source: Nerd’s Eye View blog

After years of tepid increases in the average compensation of financial advisors, the latest bi-annual industry benchmarking studies from both Investment News and FA Insight reveal that the industry’s long-forecasted talent shortage appears to be taking hold.


The 5 must-have client meetings

By John J. Bowen Jr.

Source: Financial Planning

Advisors are most successful when they do one thing above all else: work in close partnership with clients over time. To ensure you are consistently giving this close attention, you should take them through a series of five relationship-building meetings that are designed to win, service and retain clients. And they could ultimately lead to numerous opportunities for referrals.



Aspiring Advisors/Recruitment

Dave Grant, founder of the planning firm Retirement Matters, describes in a column at Financial Planning how his target market “grew significantly” after he changed his niche and rebranded his RIA. Instead of concentrating on teachers in Illinois who were nearing retirement, he changed his specialty to people nearing retirement in the suburbs of Chicago — and discovered a broader market for his expertise and services. Read his full column below. Also, UBS Group AG has announced it will hire 30 percent fewer advisor trainees and look for more experienced candidates who can team up with other advisors to meet the needs of current wealthy clients and next-gen clients. “The client we need to serve is the wealthiest client we’ve ever had in history,” UBS Wealth Management Americas President Tom Naratil told Reuters. See the full story below.

Comeback kid: How I saved my practice

By Dave Grant

Source: Finanancial Planning

Twelve months ago, I thought my entrepreneurial journey might be over. I was two months away from closing my RIA due to client attrition and low funds. It seemed the sensible option. I even had a safety net in the form of unsolicited job offers. But in the year that followed, things not only improved, they accelerated to a level that I couldn’t have imagined.


UBS to hire fewer trainees, spend more on them, to satisfy clients

Elizabeth Dilts

Source: Reuters

NEW YORK  – UBS Group AG (UBSG.S) will hire fewer trainees in 2018 but spend two to three times more on teaching them to be financial advisers, a senior executive said, in the latest sign of industry efforts to satisfy wealthier clients and grapple with an aging workforce. UBS Wealth Management Americas President Tom Naratil said the company would hire 30 percent fewer trainees but look for candidates who had more work experience so they could team up with experienced advisers to work with current clients and the next generation of clients.



Retirement Planning

In certain circumstances, clients with a significant amount of their employer’s stock as an asset in their retirement plans can utilize a special tax treatment called a net unrealized appreciation distribution strategy. This “allows for capital gains treatment of any embedded appreciation, rather than having it taxed as ordinary income,” writes wealth advisor Helen Modly in a column at Morningstar. She provides examples of how the NUA treatment works. See the link below. Also, advisors involved in the retirement plan business may want to consider earning a professional designation to increase and highlight their expertise. WealthManagment.com outlines some of the factors to weigh when deciding on a certification: specialized or broad, self-study or lecture, cost, and value. See the full story below.

A Tax-Advantaged Way to Distribute Employer Stock from Retirement Plans

By Helen Modly, CFP, CPWA

Source: Morningstar

Clients retiring from large public companies may have significant amounts of their employer’s stock as an asset in their retirement plans. For long-term employees, this stock may have enjoyed significant appreciation from the date of contribution. Provided the employer’s retirement plan is a qualified plan under §401(a), such as pension, profit-sharing, 401(k), or stock-bonus plans, and the client takes a lump-sum distribution of the full balance due, the net unrealized appreciation distribution strategy may be appropriate.


Sorting through Professional Credentials

By Ed McCarthy

Source: WealthManagement.com

There is no shortage of professional credentials in the retirement plan business. The programs vary in focus, and they use a variety of instructional methods and testing procedures. Fees to earn and maintain designations differ as do continuing education requirements. Some programs are relatively new or have a small number of designees, with conditions that could reduce their market values, at least until more advisors earn the designations. Here are some of the factors you should consider when debating a designation.


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