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News Roundup: Delegating practice management, legal tips for breakaways, and future retiree vulnerability

Practice Management

There was a time when advisors wanted to spend all their time just seeing clients. Now their firms have grown, advisors have matured, and they are embracing practice management, notes Joni Youngwirth of Commonwealth Financial Network in a column at InvestmentNews. She offers a list of responsibilities that could be included under the umbrellas of practice management and suggests advisors go through the list and decide what they can delegate. However, some duties can’t be delegated, no matter how much a firm grows. For example: “You can delegate compliance oversight, but not ethics,” she writes. See the full story below. Also, as the financial planning profession moves into a fee-only, fiduciary world, independent broker-dealers will have to make some hard choices about their business models, notes Bob Veres in a column at Financial Planning. Veres sees two options, one of which is, “the firms who have increasingly emphasized fee business … could opt to secede from FINRA altogether and instantly become the equivalent of a national RIA.” A second option is what he calls a sales house, or a FINRA-affiliated model for sales reps. Read the details in his column below.

Can you delegate practice management?

By Joni Youngwirth

Source: InvestmentNews

Just a decade ago, I would hear advisers say: “I want to spend my time only on seeing clients — nothing else.” And, “I hate anything to do with human resources because I’m not good at it.” And, “I don’t need all that practice management stuff.” Fast forward to 2018, when one adviser recently told me, “I just finished writing a book on the innovative and great practice management systems within my firm.” That’s quite a shift. So what has changed?


Voices: As planners outgrow their roots, hard choices lie ahead

By Bob Veres

Source: Financial Planning

As the financial planning industry nears a fee-only, fiduciary world, we are finally outgrowing our profession’s roots —and for the better. In the process, though, independent broker-dealers will face some important choices about their future business models.


Breakaways/Aspiring Advisors

When making the decision to jump to a new firm or to set up your own practice, take a good look at what you can do early in the process to help avoid legal snags. A lawyer and a recruiter talked with Financial Advisor IQ about how to avoid potential disputes. One tip: Find and review the contract you signed with a firm. Sounds simplistic? Attorney Thomas Potter notes: “They (advisors) should have a copy of their contracts but more often than not, they do not.” See a link to the full story below.

Tips to Avoid Getting Sued When You’re an Advisor Jumping Ship

By Rita Raagas De Ramos

Source: Financial Advisor IQ

Advisors who join broker-dealer firms don’t typically plan their exit from that firm on Day One of signing their contracts — or even months or years later — which is why they might leave a trail of breadcrumbs to use against them when they choose to leave, experts say. When the time comes for advisors to jump ship — either to join another broker-dealer firm, an RIA or to set up their own independent practice — their old firms tend to have the ability to dig up the advisors’ contracts or past actions to make their case against them, whether in court or in arbitration.


Retirement Planning

A report from the Center for Retirement Research finds that “increased dependence on financial assets” makes retirees more vulnerable to market downturns, according to ThinkAdvisor. That’s because of a  shift away from pension plans and because Social Security will likely replace a smaller share of earnings. In addition, retirees who haven’t saved enough are also vulnerable. See the full story below. Also, the Insured Retirement Institute is backing legislation that would require all private sector employers with more than 10 employees to offer a defined contribution retirement plan, according to ThinkAdvisor. The Automatic Retirement Plan Act of 2017 is sponsored by Rep. Richard Neal, D-Mass. An IRI spokesman said the requirement is designed “in a way to make it painless for small-business owners.” See the story below.

Future Retirees Will Be More Vulnerable to Market Shocks: CRR

By Bernice Napach

Source: ThinkAdvisor

Financial assets are expected to play an increasingly larger role as a source for retirees’ income, which increases their financial fragility, according to the Center for Retirement Research. In its latest report “Will the Financial Fragility of Retirees Increase?” CRR notes that the “increased dependence on financial assets” makes retirees more vulnerable to market downturns, especially if they have inadequate savings.



IRI Backs 401(k) Mandate for Employers

By Nick Thornton

Source: ThinkAdvisor

The Insured Retirement Institute is throwing its weight behind legislation that would require all but the smallest employers to sponsor 401(k) plans. The Automatic Retirement Plan Act of 2017, sponsored by Rep. Richard Neal, D-Mass., would provide a “purely private-sector solution” to the access gap in workplace retirement plans, said Lee Covington, senior vice president and general counsel at IRI, in a press call.