A Six-Point Advisor To-Do List For 2015

By Angie Herbers
Source: ThinkAdvisor

 

It’s been another banner year for independent advisors as the industry continues to grow by leaps and bounds. The bull stock market, combined with assets pouring out of wirehouses, has driven AUM to new levels; by most counts, there are now more ensemble firms than one- and two-advisor shops; and a growing number of firms are somewhere in the process of transitioning the majority of industry AUM to successor advisors or outside firms.

 

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The Best Financial Advisor Technology Of 2014

By Bill Winterberg
Source: FPPad

 

This week’s episode is all about my picks for the Best Technology of 2014. This is my fifth year highlighting top technology for financial advisors and wealth managers, and as always, I break down award winners into three categories: the best back office technology, the best client-facing technology, and the best overall innovation of the year.

 

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Cerulli’s New Numbers Buttress The RIAs-Supplant-Brokers Theorem With 40% Market Share Jump Seen By 2018

By Lisa Shidler
Source: RIABiz

 

The market share of the RIA channel will grow 40% over the next four years, according to a new report from Cerulli Associates Inc. of Boston. In the zero-sum game of market share, the big loser will be wirehouses, whose market share will decline by five percentage points from the end of 2013 to 2018. That loss by Merrill Lynch, Morgan Stanley UBS and Wells Fargo continues a steady trend of decline. Wirehouses lost 5% of market share between 2007 and 2013.

 

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Expensive, One-Size-Fits-All Advice

By James Saft
Source: Reuters

 

Financial advisors do not appear to be carrying their weight. A new study based on Canadian data shows that while advisors are able to put clients into better performing assets, they simply do not outperform their costs. Even more striking, the data shows a tendency by advisors to shoe-horn clients into portfolios with little attention to the client’s own risk appetite or life situation.

 

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The Contingency Plan: Your Succession Plan’s Safety Net

By JC Abusaid
Source: InvestmentNews

 

If you can count yourself among the minority of advisers — about 40% — who are within five years of retirement age and have created a succession plan, you’re all good, right? Maybe. In working with advisers over the years, I’ve found that potential monkey wrenches abound in even the most solid succession plans. Advisers who do everything right often end up with disappointing results, forcing them to alter their retirement timeline or compelling them to cobble together a vastly inferior Plan B on short notice. It is important that you know the most common reasons succession plans fail so that you can attempt to avoid them. It is also important that you consider creating a Plan B.

 

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Clash Of The Titans: Bionic Advisers Vs. Robo-Advisers

By Joe Duran
Source: InvestmentNews

 

The third quarter saw another round of more than $100 million invested into robo-advisers by savvy investors hoping to change the world of wealth management. The core premise of every digital solution is that individuals can get educated, act rationally and do the right thing all by themselves. Of course there’s nothing like a bull market, especially one that hasn’t suffered a major setback for more than five years, to convince everyone that individuals don’t need any help. But those of us who work with clients know the truth: We all need help doing the right thing, especially when things are overly complex or the markets get scary.

 

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Rethinking Tax-Loss Harvesting For Your Client

By Dave Lindorff
Source: Financial Planning

 

If the historic pattern continues following midterm elections, which have typically seen markets performing well right into the new year, many clients, and the advisors who put them into equities, could be dancing on New Year’s Eve. But whether that trend repeats or not, the happy folks on Dec. 31 will also include clients counting their losses. We’re talking about advisors and clients who were able to harvest losses during this year’s selloffs. It turns out that what used to be largely an end-of-the-year affair is now a year-round practice of aggressively looking for losses in a portfolio and harvesting them right away, not just to avoid short-term capital gains taxes in other parts of the same portfolio, but to also enhance performance. Tax-loss harvesting has become a tried-and-true process for balancing losses against gains.

 

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How Can Financial Advisors Differentiate Their Services Across Segmented Client Tiers?

By Michael Kitces
Source: Nerd’s Eye View blog

 

The importance of segmenting clients into different tiers (e.g., A, B, and C clients) has long been discussed in the industry, along with different ways to segment those clients on criteria ranging from revenue and profits to referrals and the ease of working with them. The concept is relatively straightforward: to improve the efficiency and profitability of the firm by appropriately matching the depth and level of services to the client’s value to the firm.

 

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Tech Survey 2015: What’s New Now?

By Joel Bruckenstein
Source: Financial Planning

 

In the advisor technology sphere, it used to be enough to look for evidence of change. What’s different now is the velocity of the action. This profession has historically been slow to embrace new technologies; firms could take a wait-and-see attitude toward new technologies without paying a price. That is no longer the case. From robo advisor technology to real-world tools that build on mobile platforms, and from risk assessment to financial planning software, changes are taking place that will shape the industry for years to come.

 

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Will Financial Planners Be Forced To Reduce Or Unbundle AUM Fees As The Price Of Beta Goes To Zero?

By Michael Kitces
Source: Nerd’s Eye View blog

 

As ETFs and indexing makes the raw cost of “owning the market” cheaper and cheaper, the question arises of whether or how advisors can continue to justify an ongoing AUM fee for an investment portfolio. For some, the cost is justified by the alpha or portfolio-related “advisor gamma” value-adds that are provided; for others, the benefit is the inclusion of financial planning services; and for the rest, the benefit may just be to help protect clients from themselves and their self-imposed “behavior gap” on returns.

 

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