Weekend Reading for Financial Planners (June 12-13)

Weekend Reading for Financial Planners (June 12-13)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the big industry news that LPL has formally announced the rollout of a ‘standalone’ RIA custodial solution for fee-only RIAs, promising no asset minimums and a more “high-touch, white-glove” approach than its larger competitors (i.e., Schwab and Fidelity), as the largest independent broker-dealer (and third-largest RIA custody given LPL’s hybrid RIA assets) continues its shift from brokerage-based roots to becoming a platform for RIAs as the industry at large continues its own shift from brokerage to advisory and products to advice.

Also in the industry news this week are a number of other interesting headlines:

  • The latest Schwab Independent Advisor Outlook Study finds that the average advisory firm added more clients in 2020 than prior years, but also is struggling more with new competitors in the advice business
  • Wealthy investors are increasingly shifting their investment preferences towards a more values-based approach as “purpose-driven investing” threatens to replace “goals-based investing” (at least for HNW clients)

From there, we have several interesting articles on industry regulation:

  • FINRA withdraws its proposal to modify the expungement rules as PIABA claims it is not stringent enough in limiting such expungements to ensure consumers (and other regulators) have access to information about consumer complaints against problematic brokers
  • New legislation in Congress is shining a fresh light on whether it’s time to end “mandatory arbitration” clauses in broker-dealer and RIA agreements
  • The SEC is pledging to step up enforcement of Regulation Best Interest, and FSI is pushing back against the potential for “regulation by enforcement”

We’ve also included a number of articles on the ongoing debates around income and wealth inequality and the broader economy:

  • A controversial investigative report from ProPublica finds that 25 wealthiest US billionaires paid an average tax rate of less than 16%, as the ultra-HNW increasingly take advantage of ultra-low interest rates to borrow against their assets for spending to avoid the need to liquidate and pay capital gains taxes
  • A new study suggests that the “global savings glut” may be primarily driven by the concentration of wealth, such that the wealthiest households literally can’t deploy their cash quickly enough back into the economy (leading to a rise in savings that is driving down interest rates and fueling low-interest debt in the bottom 90% of households)
  • The balance between workers and businesses appears to be shifting as wage growth suddenly gains traction while the total number of working-age Americans declines for the first time ever

We wrap up with three final articles, all around the theme of trying new things:

  • Often the best “crazy new ideas” are the ones that are most widely criticized… until they’re accepted and become self-evident
  • How self-criticism is only constructive up to a certain point, beyond which being introspective can actually become self-limiting
  • Why in the end, the best way to really learn something is not to study on it and pass a test about it, but to do it and even fail at it (because once you’ve failed and felt the pain of failure, you rarely ever forget that lesson for the rest of your life!)

Enjoy the ‘light’ reading!

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