Weekend Reading For Financial Planners (May 7-8)

Weekend Reading For Financial Planners (May 7-8)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that amid a wave of mergers, the number of broker-dealers has declined during the past few years, according to a report from FINRA. And while broker-dealers are also seeing a decline in the number of their registered representatives, their profits have actually ticked higher in the past few years, perhaps supported by strong market performance buoying their growing fee-based business. At the same time, the number of RIAs continues to grow, suggesting that the shift toward advice-centric, rather than product-centric, business models is continuing!

Also in industry news this week:

  • For the largest independent broker-dealers, fee-based revenues now make up a majority of total revenue (with commissions accounting for just 34%) according to a recent survey, representing a dramatic shift from just a decade ago, when commissions made up the majority of revenue.
  • Why FINRA is considering raising the barriers for retail investors to purchase a range of “complex” investments, potentially including leveraged and inverse ETFs

From there, we have several articles on industry studies:

  • A recent study shows that advisors at RIAs tend to focus on expense ratios rather than recent performance when picking mutual funds for client portfolios, leading to better outcomes than both broker-dealer registered representatives and dual registrants, who are more likely to choose more expensive, active mutual funds
  • A Cerulli study indicates that in a world of low stock and bond returns, advisors are increasingly considering alternative asset classes to generate income for clients
  • How an advice-only business model can allow advisors to be more creative with their service offerings and reach a wider range of potential clients

We also have a number of articles on retirement planning:

  • The pros and cons of using a Qualified Longevity Annuity Contract (QLAC) to insure clients against longevity risk while deferring some RMDs
  • Why clients with long-term care policies may soon see premium increases and how advisors can help these clients analyze their options
  • Why planned changes to “Traditional” Medicare could make it look more like Medicare Advantage and how advisory clients might be affected

We wrap up with three final articles, all about how one’s personality can affect their wealth:

  • How certain personality types are correlated with increased lifetime earnings among the general population, and why the traits that lead to success for financial advisors might be different
  • How the personality traits associated with ‘self-made’ millionaires differ from those who inherited their wealth, and why these traits could affect client behavior
  • Why certain characteristics are associated with the ability to separate ‘financial BS’ from genuinely profound advice

Enjoy the ‘light’ reading!

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