Weekend Reading For Financial Planners (June 18-19)

Weekend Reading For Financial Planners (June 18-19)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that Charles Schwab has agreed to pay $187 million to settle allegations that it misled users of its Schwab Intelligent Portfolios robo-advisor platform by falsely claiming that the cash allocations in its model portfolios (which were significantly higher than its competitors) were determined through a ‘disciplined portfolio construction methodology’ when regulators ultimately determined they were pre-set to generate a desired amount of revenue for Schwab. In other words, even as Schwab advertised that it was not charging a platform fee for the service, Schwab’s large cash allocations in the portfolios were still set to incur a cost for its clients, serving as a ‘hidden’ fee for an otherwise ‘free’ service, which the regulators treated as a violation of the antifraud (no-misleading-advertising) provisions of the Investment Advisers Act. Which in turn raises questions of whether regulators will eventually apply a similar scrutiny to the similar pricing model offered to RIAs using custodial platforms as well?

Also in industry news this week:

  • Why it is important for advisory firms to review their compliance and disclosure practices in the wake of a new Department of Labor regulation regarding rollovers of workplace retirement plans and IRAs
  • How the term ‘ESG’ has lost much of its meaning and how advisors can serve clients who want to take a values-based investment approach

From there, we have several articles on this year’s market volatility:

  • The tools advisors are using to help clients stay the course during the current market downturn
  • While the 60/40 portfolio has come under fire amid the poor performance of stocks and bonds this year, the classic asset allocation could now be more attractive given improved stock and bond valuations
  • Why the day the market seems to be at its worst is often one of the best times to buy

We also have a number of articles on bear markets:

  • Five things advisors can keep in mind during bear markets to provide clients with a long-term perspective
  • Why a trend following strategy can be an effective risk management tool for a portion of some client portfolios
  • Why reading books and prioritizing sleep can help advisors and their clients lower their stress levels during bear markets

We wrap up with three final articles, all about putting money in perspective:

  • While it seems like the worst of times when it comes to the economy and world affairs, the historical record shows how much things have improved over time
  • How those with better numeracy skills tend to have higher incomes and greater happiness
  • Why building wealth is not an end in itself and how money can be used to facilitate health and happiness

Enjoy the ‘light’ reading!

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