By far the most important article in this issue of Financial Advisor is Wade Pfau analysis of the current market conditions, and his conclusion that the 4% rule won’t work for somebody retiring today. If the portfolio has to last 30 years, then he thinks 2.1% is a more workable number. If the retirement is to last 40 years, then you should think more in terms of 1.49%. Much of this you’ve seen before in Pfau’s other research, but this mainstream summary of that other research is going to cause a few advisors to rethink their retirement plan advice.
Meanwhile, Mitch Anthony says that you should never retire. You can scale back, but why get out of the game entirely, when you’re probably having more fun, having better client conversations and making more money than ever before? He doesn’t explore any of the implications of an owner who works 8 hours a week while the rest of the staff is working 45, but presumably that can be worked out with a few frank discussions all around.
Joni Youngwirth is by far the best practice management writer in the magazine’s lineup, and she offers some advice here on how to consciously build the firm you actually want. And Joel Bruckenstein looks at a VERY interesting software program, imported from The Netherlands, which might become your answer to the robo-competition as early as next year.
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If you notice how thin are the August issues of our industry magazines, you might be insulted. Advertisers apparently believe you’re spending the entire month on vacation (ha!), and therefore they pull back their financial commitment to getting your attention and supporting the flow of information to your doorstep.
But… the flow continues. Here we get a good column from Kimberly Foss on how to adjust your “teaching style” (You DO teach your clients, don’t you?) to their learning styles. Joel Bruckenstein likes what he sees in T. Rowe Price’s MarketScene app, and Michael Kitces proposes some new models for applying the 4% rule to client portfolio distributions, even though you’re going to revisit the distribution assumptions each year when you meet with clients anyway. Ed Slott offers a court case where an IRA investor got too clever, and Allan Roth makes a good case that a lot of what clients believe about bonds is simply not true.
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There’s actual news here: Angie Herbers, at her new firm (Kaleido) has created a service where can go online and benchmark your firm (called Kaleido Scope: http://www.kaleido.net/kaleido-scope/. She offers some insights into what the data is telling her so far.
Meanwhile, Bob Clark is picking apart the Institute for the Fiduciary Standard’s best practices provisions (he would obviously prefer them not to apply to brokers, who can keep their old standards), and Mark Tibergien recommends a novel way to think about the future of your business and the larger landscape it lives within.
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