Weekend Reading for Financial Planners (Nov 13-14)

Weekend Reading for Financial Planners (Nov 13-14)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with a report from NASAA finding that the SEC’s Regulation Best Interest rule that took effect on June 30, 2020, has so far failed to achieve its stated goals of requiring broker-dealers to act in their clients’ best interests while making investment recommendations. Among other things, the report found that broker-dealer firms actually offered a higher number of “complex, costly, and risky” investment products than before the rule was implemented (and failed to discuss less costly or risky alternatives when recommending those products), still offered contests to incentivize advisors to sell more products (and thus creating a conflict of interest when recommending strategies to clients), and failed to fully update their policies and procedures to comply with the new rule. But ongoing confusion about Reg BI’s provisions means that the SEC will likely need to provide more guidance to enable more broker-dealers to come into compliance.

Also in industry news this week:

  • The SEC issued a Risk Alert detailing the issues it found with RIA firms’ advisory fee billing, which included inaccurate fee calculations, inadequate disclosures, and (a lack of) policies and procedures to ensure clients were charged the correct amount
  • In a different Risk Alert focusing on so-called ‘robo-advisors’, the SEC stated that it had found deficiencies in nearly every digital advisory firm it had examined, including the failure to collect enough client information to truly make (and monitor) recommendations in the client’s best interests

From there, we have several articles on practice management, including:

  • Why it is important for advisors to systematize their processes, even if it takes time to implement the new systems, and how to get started
  • How financial advisory firm owners can get their firms out of a ‘rut’ by focusing on staffing, technology, and reflecting on their own purpose
  • Why it is important for firm owners to take time to meet directly with their staff, and how to make those conversations more effective

We also have a number of articles on retirement planning:

  • How the flexibility financial independence provides can benefit both parents and their children
  • How a personal family crisis led one advisor to shift from focusing on the quantitative aspects of retirement planning with clients to embracing the qualitative impacts of the decision to retire
  • How the “End of History Illusion” shows that an individual’s interests and goals ten years from now might be very different from their preferences today, which makes it especially hard for clients to predict what they may enjoy in retirement until they’re almost already there.

We wrap up with three final articles on the themes of charitable giving, selflessness, and gratitude:

  • How generous acts like charitable giving actually produce physiological changes in our bodies and brains that make us happier and healthier
  • New research shows that people really do become more generous with age
  • How reflecting on the abundance we have – and challenging ourselves to occasionally live without it – can help restore the gratitude that declines as we accumulate more of the things we want

Enjoy the ‘light’ reading!

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