Weekend Reading for Financial Planners (Nov 6-7)

Weekend Reading for Financial Planners (Nov 6-7)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with updates on the proposed tax law changes in the “Build Back Better” Act currently being debated in Washington. The latest version of the bill brings back several IRA-related measures that were in the House Ways and Means Committee’s proposal from September but were omitted from the bill when it was introduced last week, including a return of the ban on ‘backdoor’ Roth IRA contributions (beginning in 2022), a prohibition on IRA contributions for higher-income taxpayers with retirement account balances greater than $10 million (beginning in 2029), and Required Minimum Distributions (RMDs) for retirement accounts with balances greater than $10 million (also beginning in 2029).

Also in industry news this week:

  • The Public Investors Advocate Bar Association plans to call on the SEC to revise form CRS to add insurance and dispute resolution disclosures, including an explanation of any mandatory arbitration clauses and the amount of E&O insurance a firm is carrying in the event the client is harmed and needs to be made whole
  • M&A activity in the RIA industry set a record for an eighth consecutive year in 2021, concentrated among the industry’s largest firms, but some in the industry think the pace of M&A could slow down going forward because even large firms with a lot of dollars available to deploy can only digest and integrate ‘so many’ acquisitions at a time

From there, we have several articles on how advisors can better generate client referrals, including:

  • Why advisors are more likely to get referrals from clients when they show empathy for the client’s concerns, and when the client does not feel pressured to provide them
  • How generating a clear and specific message of what kind of clients the advisor serves (and what kind of clients might not be a potential fit) can lead to more frequent and successful client referrals
  • Why it is important for advisors to position themselves to be able to ask clients for referrals and prepare carefully for the referral request so that clients feel empowered to make referrals

We also have a number of articles on retirement planning:

  • Why clients generally make poor predictions about their life expectancy, and the tools that are available for advisors to make better longevity estimates and more accurate financial projections
  • How Monte Carlo analysis can be better implemented and the importance of communicating the results of Monte Carlo simulations to clients in a manner beyond ‘just’ a single-number probability of success
  • An analysis of risk in ‘buffer’ and ‘floor’ products and why these strategies do not offer a ‘free lunch’

We wrap up with three final articles, all about the theme of being intentional when creating goals:

  • Why seeking out fame and fortune for their own sake might not lead to client (or advisor) wellbeing
  • Methods advisors and their clients can use to reduce the negative impacts of comparing themselves to others
  • How acting with intention can lead to greater client happiness (and results in better financial planning!)

Enjoy the ‘light’ reading!

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