Home > Aspiring RIAs > News Roundup: RIAs discount fees, breakaways bleak on brokerage, and options for underfunded retirement

News Roundup: RIAs discount fees, breakaways bleak on brokerage, and options for underfunded retirement

Financial Planning

Practice Management

A recent Fidelity RIA benchmarking study finds that fee discounts are on the rise as advisors contend with declining revenue and client growth, ThinkAdvisor reports. About 64% of RIAs are offering discounts, the report shows. Firms are beginning to unbundle their fee structures, too, according to the publication. See the details below. Also, Michael Kitces, in a post at his Nerd’s Eye View blog, outlines the importance of putting advisory firm fees and minimums on your website. Not only can being transparent with that information make you more referrable and help screen out nonqualified prospects, it can protect you from “haggling with yourself” and making fee concessions you may regret. See a link to his post and “office hours” broadcast below.

RIAs Cut Fees as Growth Shrinks: Fidelity Study

By Michael Fischer and Janet Levaux

Source: ThinkAdvisor

With declining revenue and client growth, nearly two-thirds of registered investment advisors are offering fee discounts and starting to unbundle their fee structures, new research released Monday by Fidelity Clearing & Custody Solutions shows. The 2017 Fidelity RIA Benchmarking Study reveals that RIA revenue yield has dropped three basis points, revenue growth has fallen to 7%, and client growth is down to 5%—the lowest level in five years.


Another Reason For Putting Your Advisory Firm Fees And Minimums On Your Website

By Michael Kitces

Source: Nerd’s Eye View blog

The conventional wisdom amongst financial advisors is that the best place to talk about advisory fees and minimums is face-to-face with prospective clients, who are told “Come in for an introductory meeting and ‘we’ll talk’ about the cost to work together.” Doing so allows the financial advisor the opportunity to explain the nature of what he/she does, and the value of their services, to provide better context regarding their costs. And, if necessary, allows the advisor to make an on-the-spot decision about whether to grant a prospective client an exception when it comes to their fees or minimums. Except as it turns out, that also may be the biggest drawback to waiting until the first prospect meeting to discuss advisory fees and minimums, and can actually put us in situations where we make ‘business’ decisions we ultimately regret!




Breakaways/Aspiring Advisors

Almost half of the breakaway brokers surveyed by TD Ameritrade Institutional say they expect the brokerage channel to “deteriorate significantly” in 2018, reports WealthManagement.com. More than half of those considering breaking away are dissatisfied with their employers on multiple levels, according to TD Ameritrade’s Break Away to Independence Survey. See more details below. Also, The American College of Financial Services is offering a new designation called The Wealth Management Certified Professional, ThinkAdvisor reports. The curriculum provides a deep overview of tax strategies, financial instruments commonly used by advisors, applied behavioral finance, sophisticated wealth management techniques, and more, according to American College’s Michael Finke. See the full story below.

Breakaways Expect the Brokerage Industry to Crumble in 2018

By Michael Thrasher

Source: WealthManagement.com

Nearly half of breakaway brokers expect the brokerage channel to deteriorate significantly next year, according to a new survey by TD Ameritrade Institutional and Market Strategies International (MSI). Forty-one percent expect the state of the brokerage industry to remain the same.


American College Launches New Wealth Management Certification Program

by Janet Levaux

Source: ThinkAdvisor

Certifications are growing in popularity among advisors. The American College of Financial Services has launched a new designation focused on goals-based investment management. The Wealth Management Certified Professional (or WMCP) curriculum aims to provide advisors familiar with the fundamentals of planning with more comprehensive knowledge of applied wealth management techniques.


Retirement Planning

Many households have fallen short on saving for retirement, and financial planner and actuary Joe Tomlinson takes a look at some strategies to consider for those who have not adequately funded their retirement. He tests various asset allocations as well as options that make use of annuities — SPIAs and QLACs in particular. See his research below at Advisor Perspectives. Also, “filial responsibility” laws mean that children essentially could be held responsible for their parents’ long-term care costs, according to a column at ThinkAdvisor. These laws are on the books in 28 states and “can provide a powerful motivation to encourage clients to plan for their future long-term care costs,” note authors William H. Byrnes and Robert Bloink. See their column below.

The Best Strategy for Retiring Without Adequate Savings

by Joe Tomlinson

Source: Advisor Perspectives

Most research on retirement strategies assumes that people have saved adequately. But data on household savings shows that many households fall short, and will need to call on relatives or other sources for support. This raises questions about the best withdrawal or annuity strategies when savings are insufficient. It turns out that which strategy works best is different than for adequately funded retirements.


Your Kids Could Pay the Price for Poor LTC Planning

By William H. Byrnes, and Robert Bloink

Source: ThinkAdvisor

The long-term care insurance marketplace has been in decline for some time now—but because of the ever-rising cost of long-term care, the need for long-term care planning remains more important than ever. Clients who have dismissed the need for long-term care planning in favor of relying upon government-sponsored programs might think again once they realize that their children could eventually be held liable for their long-term care expenses.