Weekend Reading for Financial Planners (June 19-20)

Weekend Reading for Financial Planners (June 19-20)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the big industry news that now Goldman Sachs has officially thrown its hat into the RIA custody ring as well, announcing a significant new relationship with mega-RIA Stewardship Partners, and positioning itself to compete especially for the ongoing flow of “breakaway brokers” that may prefer the storied Wall Street brand over a more “retail”-affiliated RIA custodian?

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

  • The SEC is once again considering further updates to the Accredited Investor rules, including the potential to increase the income and net worth thresholds (which haven’t been adjusted for inflation in decades) but also to potentially allow more exceptions for those with significant education or similar credentials
  • The Department of Labor is preparing yet another update to the fiduciary rules that may look to not only the compensation that advisors receive, but the titles they use when holding out to consumers

From there, we have several interesting articles on the evolution of the subscription fee model:

  • How subscription fees open up new segments of clients that the AUM model doesn’t serve, expanding the breadth of who advisors can serve profitably
  • An industry benchmarking study showing that growth in subscription fee service models has reached the point where retainer-fee firms are enjoying the same high retention rates as AUM firms (even through the pandemic in 2020)
  • Why it’s so important to set a minimum retainer fee for any client an advisory firm works with, to ensure they maximize the time they’re spending with clients (and prospects)

We’ve also included a number of articles on retirement, including:

  • Strategies to avoid the IRMAA Medicare surcharges in retirement (particularly by managing pre-tax retirement accounts and their later-years’ RMDs)
  • The valid and not-so-valid criticisms of using annuities in retirement allocations
  • Despite decades of fears that a large segment of consumers won’t be prepared for retirement, in practice a recent Gallup study shows that nearly 80% of retirees are satisfied with their retirement (suggesting that we may underestimate our ability to adapt to our retirement circumstances whenever they do come!?)

We wrap up with three final articles, all around the theme of finding financial contentment:

  • Economic conditions have improved dramatically since the 1950s, but our financial satisfaction has not, suggesting that the real challenge is not improving our financial condition, but preventing our expectations from growing faster than our reality?
  • When we are only ever limited in how much we can control in our lives, the key to financial happiness is not in having ‘everything’, but getting to the point that we feel we’re in enough control to not need to worry about the future
  • While we focus heavily on building wealth in portfolios (and recovering from the decline of the pandemic), it’s arguably investing into the bonds we have with our friends and family that build the most happiness and life satisfaction

Enjoy the ‘light’ reading!

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