Inside Information - Financial Planning

MEDIA REVIEWS - August 8-15, 2010

nospam@example.com (Admin) — Fri, 13 Aug 2010 19:28:10 -0400

It IS interesting that LPL chose this rather unfavorable market environment to launch its initial public offering, although the environment IS somewhat better than the past two years. Kudos to Financial Planning magazine for at least asking the question. Joel Bruckenstein's cover article looks at the new technology platform that is under construction at Schwab Advisor Services, and then gently points out that the company executives might be making... misleading claims when they say they're the first out of the gate with an integrated solution. (To be charitable, maybe they're unaware of Fidelity's and Pershing's already-functioning platforms...) But the fact that Schwab has finally taken up the challenge is good news; a technology arms race among institutional custodians will benefit all advisors in the long run...

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MEDIA REVIEWS - July 1-7, 2010

nospam@example.com (Admin) — Wed, 07 Jul 2010 05:32:28 -0400

Marie Swift's feature article in this month's issue of Financial Planning magazine talks about what we hope will be the final aftershock of the market meltdown: restoring client loyalty or watching clients whose confidence was shaken walk out the door. A number of commentators imply that your relationship standards with clients are at least one notch higher now than they were pre-crash, and that may be a permanent change. Another permanent change: one of the largest investment platforms in the dually-registered world has adopted a number of fiduciary-friendly features, suggesting that regardless of the SEC's actions, the fiduciary future may be upon us already.

Martin Shenkman and Ed Slott do their usual thing: offer advanced planning tips, while Stephanie Bogan identifies the stages that each advisory firm passes through if it is to evolve beyond the lifestyle practice. And Thornburg's George Strickland says that carefully-laddered individual muni investments may provide a better hedge against inflation AND rising interest rates than TIPS. It's an interesting argument.
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MEDIA REVIEWS - June 16-23, 2010

nospam@example.com (Admin) — Sun, 13 Jun 2010 13:47:55 -0400

Despite Investment Advisor's strong orientation toward promoting the independent broker-dealer community and serving as its mouthpiece, Financial Planning magazine's annual broker-dealer survey is consistently much more comprehensive and interesting. You get the feeling that IA's editors weed out anything in the data that one or another BD executive would rather the field force not hear about, while the FP editors seem to be looking for issues and anomalies.

Case in point? FP notes that only three independent BDs showed revenue growth in 2009, and highlighted some firms which experienced dramatic decreases in revenue. In addition, it highlights how few firms still generate more than half their total revenues via fees; annuity commissions, in most cases, trump "fee-based" revenues, which may explain why the Financial Services Institute seems so alarmed whenever Congress or the SEC talk about a fiduciary standard.

Meanwhile, the most interesting article in this issue is an analysis of two advisors who are buying small independent accounting firms. By far the majority of accounting firms are solo practices, whose owners face the same issues that advisors are facing: where do I find a successor? The firms are small enough to be purchased at reasonable cost and via some kind of earnout arrangement; more importantly, the acquiring advisory firm can begin to introduce a broader range of services to the accounting firm's clients. You buy a profitable business and then expand the revenues--and take care of the founding accountant's clients when he/she retires.

The subject of the day, in practice management, is client segmentation and determining your ideal client. Both John Bowen and Gabriel Garcia (previewing an upcoming Schwab white paper) shed some interesting new light on how, exactly, to accomplish this in your own practice.
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MEDIA REVIEWS - May 16-23, 2010

nospam@example.com (Admin) — Sun, 16 May 2010 10:38:00 -0400

I apologize: I didn't do a very good job of winnowing down the number of important articles because there were too darn many good ones in this 40th Anniversary issue of Financial Planning magazine, ranging from Stephanie Bogan offering a 3-factor model for identifying what kind of planning firm you have, to profiles of Bill Bengen and Dave Yeske, to an article on investing in microlending organizations, to Martin Shenkman offering a detailed analysis of how GRATs are about to be radically disempowered and Ed Slott reminding us to have clients take their required minimum distributions this year.

I also wrote the cover story, which I briefly summarize; it basically predicts a fairly dramatic upcoming 10 years, driven by evolutionary change that will make today's planning practice seem awfully quaint to the advisor of 2020.

Let's hope the editors of our trade magazines don't follow this example and create relevancy in nearly every article in the publication; we have too much to read already.
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MEDIA REVIEWS - April 1-7, 2010

nospam@example.com (Admin) — Thu, 01 Apr 2010 20:20:00 -0400

The theme of this month's issue of Financial Planning is not hard to find: the feature well is all about health care issues. After offering up a view of the issues that absolutely have to be resolved (think spiraling costs), advisor Rick Kahler recommends that advisors pay more attention to their clients' lifestyles and health habits, and encourage them to get regular checkups. Martin Shenkman offers a good guide to various issues that can be overlooked when you get the usual durable power of attorney, living will and health proxies, noting that these documents can lead to abuse if you don't set up some checks and balances.

Meanwhile, Deena Katz offers what may become a VERY useful distinction: between management succession and ownership succession. One involves stock, the other involves responsibilities, and advisors who want to continue working forever may want to focus on bringing in somebody to run the office on a day to day basis. Compliance consultant Brian Hamburger warns about a patchwork quilt of privacy requirements at the state level, at the FTC and the SEC, and Carl Richards is thinking outside the box, as usual--this time questioning the value of any planning work that involves future projections, when there may be better ways of handling crises and issues as they arise.
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MEDIA REVIEWS - April 1-7, 2010

nospam@example.com (Admin) — Thu, 01 Apr 2010 15:25:00 -0400

MEDIA REVIEWS - March 1-7, 2010

nospam@example.com (Admin) — Mon, 01 Mar 2010 19:28:00 -0500

Longtime readers are going to be surprised to see John Bowen's column receive a "high" relevancy rating, and truth to tell, I was a little surprised too, but it offers a good way to market yourself and a little bit of a twist on how to do the planning. Martin Shenkman and Ed Slott both do their usual great job of explaining the complexities of estate planning and distribution planning, respectively, and I think both features have merit. The discussion of regulatory issues may not break new ground but it offers a pretty good discussion, and I really like the idea of readers posing questions and the magazine finding experts to answer them.

Meanwhile, something very important has happened. Wisconsin Senator Herb Kohl, a member of the Senate Banking Committee, has drafted a provision for inclusion in the new financial reform legislation which would do a number of things that I suspect you support. It would create a safe harbor for the term "financial planner," meaning the plumber down the street and his dog couldn't call themselves financial planners without meeting some essential requirements. Among other provisions, the amendment would create a financial planner oversight board.

This amendment is supported by the Financial Planning Coalition. At a time when the brokerage industry has successfully lobbied a fiduciary standard out of regulatory reform, this may be a long-shot, but the Coalition has set up a quick, easy way for you to voice support for the provision (go here: http://www.capwiz.com/cfp/home/). While you're there, you might also tell your elected representatives that you strongly support requiring all financial advisors to live up to a fiduciary standard. I think all of us need to take precious time off of our workday to participate in this legislative process; otherwise, we probably deserve what we get when more motivated parties (like the brokerage firms) work harder than we do to get their versions of legislation passed.
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MEDIA REVIEWS - February 8-15, 2010

nospam@example.com (Bob Veres) — Mon, 08 Feb 2010 22:56:00 -0500

I have a feeling you're looking at a snapshot of two important trends here: Capital Analysts creating a flat fee model for advisors who affiliate with its BD platform (see the Marion Asnes article below), and the deferred annuity concept, where you put a little money into an annuity that will pay an adequate income at age 80 and for life thereafter, turning the whole retirement plan into a period-certain calculation. (The article by Ilana Polyak failed to mention that Symetra, Inc. has a similar product out.)

Meanwhile, you get good practice management insight from the article by Stephanie Bogan, and I applaud the editorial staff at Financial Planning for putting a picture of the writer on the cover. I hope this starts a trend, and that it eventually extends to columnists...
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Media Reviews - January 1-7, 2010

nospam@example.com (Bob Veres) — Fri, 01 Jan 2010 14:29:00 -0500

Happy new year! Happy new decade! I'm going to go out on a limb and hope that the coming ten years will be more pleasant for the financial services world than the Double-Bubble decade we just came out of, although my strong suspicion is that the Wall Street firms are going to get off scot-free from any new regulatory scrutiny and busily dig us all back into a hole just like the one we came out of.

And maybe that's why I feel that my two cats have more credentials as a financial services mover and shaker than Rick Ketchum of FINRA. (What visible harm are THEY doing?) But I think the other selections, and particularly Don Trone on the cover, are excellent and interesting choices. Trone was talking about the fiduciary standard long before anybody could pronounce it, and he's done more to bring the financial planning world into that sphere than any other two people I can think of. You'll be hearing more about Eleanor Blayney and her network of women consumers/advisors, and Steve Holdsworth and Carl Richards are working on changing the planning world while most of the rest of us are trying to get through some of the work on our desk.

Meanwhile, this issue of Financial Planning includes a heartfelt column by me (Bob Veres), which, by necessity, remains unrated, plus profiles of Raymond James and Cambridge Investment Research. And Ed Slott does his usual great job of explaining IRA/Roth IRA issues. If I were doing this Movers and Shakers thing, I might have included Ed on the list in this Year of the Roth.

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