Weekend Reading for Financial Planners (Jan 8-9)

Weekend Reading for Financial Planners (Jan 8-9)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with a study showing that private equity firms are targeting financial advisory firms with relatively clean disciplinary records for acquisitions, but that once acquired, advisor misconduct at these firms skyrockets an average of 147%! The reason for this jump is unclear, but potential explanations include heightened pressure from private equity owners to increase profits, or pushing too hard to cross-sell their other portfolio companies’ products and underestimating the compliance requirements of the advisory business. Either way, the study suggests that firm owners considering a sale who want to ensure that their clients remain in good hands could increase their due diligence of potential acquirers and their business practices!

Also in industry news this week:

  • A new FINRA rule went into effect on January 1 that will attempt to reduce the risk to consumers from brokerages with poor disciplinary records by requiring these firms to fund a segregated account to pay potential arbitration awards (and increase their cost of doing business as long as they insist on keeping problematic brokers onboard)
  • RIA M&A activity is expected to continue to surge in the coming year, according to a recent survey, with lofty firm valuations expected to sustain as well

From there, we have several articles on advisor communications and marketing:

  • How to respond when clients object to their advisor’s recommendations (and why asking more questions might be a better approach than more aggressive persuasion to get them to implement)
  • Why the best-performing types of pages on financial advisors’ websites include not only the basic “Who” and “What” of the advisors, but also show why a prospective client could be the right fit for the advisor and how the advisor helps their clients reach their goals
  • Why advisors should focus less on client referrals and more on Google Reviews as a one-to-many client referral platform in light of the SEC’s marketing and testimonial rule

We also have a number of articles on being an effective manager and leader:

  • Why sales training programs for financial advisors can prove ineffective if they use a “one-size-fits-all” approach without considering the personalities and needs of the advisors themselves
  • How leaders can thread the needle between micromanaging their team and being too hands-off by timing their help for when it’s needed most (and backing off when it isn’t)
  • Why most advisory firms need at least one person tasked with having a vision for the firm and a strategy to get there – which, as firms grow, may be someone other than the firm’s owner who is hired strictly for their “professional” leadership

We wrap up with three final articles, all about New Year’s Resolutions:

  • Why one advisor shifted from making New Year’s Resolutions to focusing on the habits that make it more likely he will achieve his goals (and letting the results fall where they may)
  • Ways individuals can make their financial lives happier in 2022, including by focusing internally rather than externally, simplifying their finances, and getting on the same page financially with a spouse
  • Why failing at New Year’s Resolutions can actually lead to better personal and professional growth in the future

Enjoy the ‘light’ reading!

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