On August 24 and 25, we held our second annual Thought Leader Summit. Here is a short summary of each session and a link to watch the replay for CE credits.
Jeffrey Gundlach on What’s in Store for the Markets and the Economy
Presenter: Jeffrey Gundlach
Moderator: Robert Huebscher
There is at least a 50/50 chance that headline CPI inflation will be greater than 5% for the full year 2021, according to Jeffrey Gundlach, the founder and CEO of DoubleLine Capital. During this session, in which Jeffrey answered audience questions about the economy and the markets, he offered a number of other predictions. He said that bonds and stocks are historically overvalued, and low interest rates are supporting S&P 500 valuations. Investors should look to diversify internationally to emerging markets and specifically to India. On the political front, he said that the Democrats will lose the House and possibly the Senate in 2022, and neither Biden nor Trump will run for president in 2024.
Taxing Times: Debt, Tax Reform, and Strategies for Uncertainty
Presenter: Ryan C. Bertrand
Moderator: Suzanne Siracuse
Things change so fast in Washington around tax reform and fiscal policy that anything mentioned today may have already changed. There have been vast increases in debt and it’s only growing. With so much discussion in the media around taxes, historic spending packages, and reform, clients may have anxiety over the future. This presentation overviews the primary drivers behind the national debt and how it connects with clients’ retirement planning. From Social Security to Medicare, planning and sound advice from a financial advisor can help ensure clients get the most from their tax dollars. We also discuss tax-related items and proposals made by the current presidential administration.
Sweeping changes are currently being debated that could significantly impact high income clients earning more than $400,000. These changes include unprecedented changes to capital gains for those making over $1 million each year. Also impacting capital gains assets is the proposed change to the step-up in cost basis rule.
The administration has also proposed changes to estate and gift taxes, reducing the current applicable exclusion from $11.7 million ($23.4 million per couple) to $7 million.
In the coming months, there will certainly be debate on potential reform, but there is no reason that client discussions and planning on this topic should not start today. This presentation closes with strategies that advisors can employ to combat the uncertain environment.
It is difficult to forecast the changes to corporate taxes. The president's proposals call for an increase of the rate on corporate earnings to 28% from 21%.
Towards the end of the year, debates on these proposals will come and then there will be a crunch time in November or December for any reforms to take place.
The Truth About the Future of the Financial Advisor
Presenter: Matt Reiner
Moderator: Robert Huebscher
Reiner explained how “advisors + technology = winning!” The advisory profession should not fear but embrace the benefits of technology to meet their clients’ needs. The role of an advisor consists of a psychological and emotional life coach, as opposed to an analyst. There are five key strategies designed to create an open and trusting environment, alleviate fears and negative emotions, encourage and answer questions, set goals, and leverage technology to allow more time with your client.
While technology provides advisors and clients quick access to valuable data, the human interaction an advisor provides will never go away. Humans are psychologically irrational and emotionally driven, which makes the human connection necessary to nurture and build a trusting relationship, thus helping clients navigate sound financial decisions and guide them through mental roadblocks.
Reiner also gave several valuable book recommendations for further reading.
Investing, Gambling & Gamification - New Market Dynamics Demand New Portfolio Risk Metrics
Presented by: Julian Koski and Andy Kern
Moderated by: Robert Huebscher
The gamification of markets spurred by the wave of retail investors has replaced disciplined investment analysis with speculation and conjecture. For a lucky few, the irrational behavior provided short-term success. However, such behavior goes hand-in-hand with steep losses… which you guessed it… is actually gambling rather than investing.
In today’s market, many advisors don’t realize they are dealing with gambling outcomes, thereby exposing their clients to a gambling risk that continues to grow in severity. This new dynamic makes the mitigation of gambling risk in a portfolio critical and begs the question: Are you rolling the dice with your client’s portfolio? This presentation covered:
- What does the portfolio of a gambler look like? And how does it differ from a true investor?
- How to identify and mitigate a gambling risk and what causes it specifically?
- Effective tools and strategies to help clients navigate these unprecedented market dynamics.
Like Ships Passing in the Night: Results of the 2021 RIA PARI Survey
Presenter: David Stone, Lauren Drapeau
Moderator: Suzanne Siracuse
This session explored RIA beliefs and opinions regarding annuities. Despite tremendous innovation in the advisory annuity space of the last decade the “2021 RIA Protected Accumulation + Retirement Income Survey” finds that a fifth of IARs of RIAs still assume all annuities expensive, complex and illiquid. This, in spite of the fact that advisors’ whose clients own annuities say those clients see the value of, and are comforted by, the inclusion of guaranteed lifetime income in their retirement plans. For RIAs, knowing when and how to leverage today's less-complex, lower-cost advisory annuity solutions may improve financial outcomes for clients, and help them spend more securely in retirement.
Nurturing diversity in financial services
Presenters:: Andrew Komarow, Christopher Woods, and Terron Tidwell
Moderator: Sara Grillo
This session provided steps for advisors to create an inclusive practice that transcends racial, neurological, socioeconomic, and gender boundaries. The panelists presented concrete examples of ways that you can improve diversity within your practice by increasing accessibility for clients, prospects, staff, and vendors.
Those examples included:
- Recruitment - How can we bring more diverse people into the industry?
- Retention - How can we create an inclusive environment that diverse people can thrive?
- Advancement - How do we create pathways for diverse people to ascend into leadership positions?
Understanding neurodiversity and eliminating the stereotypes and ableism neurodiverse individuals face is critical. Someone who is neurodiverse may communicate differently, and we were encouraged to ask questions rather than make assumptions. We also learned about universal design, which is the concept that the accommodations we make in the workplace will benefit everyone, not only those that are neurodiverse.
Visibility is a key element to improve diversity in financial services. People want to see a reflection of themselves in who they are doing business with or working for. “We have to start looking into places that don’t look like us,” Terron Tidwell said. Diversifying your network can help those who may not be used to working with someone outside their parameters.
Portfolio insights: Effective investment strategies in the current market
Presenter: Ryan Barksdale CFA, CFP®
Moderator: Robert Huebscher
This discussion focused on key portfolio construction trends across asset classes, sectors, and investment styles. The Vanguard Portfolio Analytics and Consulting (PA&C) team engages with hundreds of advisors each year about portfolio construction topics. They also have access to thousands of advisor portfolios through Vanguard’s digital investment analytics tools. Ryan discussed the key trends the Vanguard team is seeing based on the day-to-day conversations they are having with advisors regarding portfolio construction. He also shared some of the following useful insights for your consideration.
- Advisors are favoring passive investments for domestic equities and active investments for fixed income products, though he noted they have seen growing interest on the passive side of fixed income investing. ETFs were resilient during the crisis in March/April 2020, acting as a shock absorber and delivering critical liquidity during this heightened market volatility.
- “Investors are hungry for yield,” Ryan stated. “We have been in a low yielding environment for a long time, so this has led investors to look for yield elsewhere.” This trend has resulted in Advisors repositioning equity and fixed income portfolios, with potential for increased risk profiles. Ryan acknowledged that it’s a tough time for fixed income investing for several reasons, but he stressed the importance of retaining high quality exposure to mitigate risk and protect portfolios during equity market drawdowns.
- “Inflation is the elephant in the room and it’s what we are talking about each-and-every day with advisors,” he mentioned. Inflation is at the top of mind of all advisors and inflation fears have prompted advisors to make shifts in allocations.
You can watch a full replay of the session here.
3-D Advisor Growth: Next Level Processes to Elevate Your Firm
Presenters: Daniel Crosby, Ph.D., Todd Bertucci, George Svagera
Moderated by: Robert Huebscher
This session looked at the three dimensions of scalable growth through technology. Daniel Crosby started by reviewing the 4 Ps of client engagement: Purpose, Proof, People, and Process. He walked through how and why using these steps increase retention and efficiency with clients.
After reviewing this process, Todd Bertucci and George Svagera discussed how to embed processes into a practice through technology. Their conversation centered around the benefits of technology and how it impacts all areas of a practice from sales to marketing to planning. Integrating technology into the daily processes helps to increase efficiency but also allows for scalable, sustainable growth while supporting your value proposition.
Defined Outcome Products: Rationale, Implementation, and Risk
Presenters: Julien Chuard, Senior Vice President, Head of Products at MerQube, and Wes Mathews, Director of Portfolio Solutions at Milliman Financial Risk Management
Moderator: Robert Huebscher
This session focused on defined-outcome products, exploring how and why those products have experienced such a significant growth in interest since their launch. Specifically, the session highlighted the role of defined-outcome products in portfolios and how market parameters would affect their economics. Wes Mathews of Milliman reviewed the factors to consider when using defined-outcome products. Julien Chuard of MerQube reminded advisors about the importance of benchmarking as well as the variety and capability of tools available to advisors.
Tips and Best Practices on Buying or Selling your Practice
Presenters: Todd Fulks, SVP of Succession and Acquisition, Advisor Group; Junette McCarthy, Advisor, Owner of McCarthy Wealth Management and Jon Webb, Advisor, Partner at BACH Investments Plus LLC
Moderator: Suzanne Siracuse, CEO, Siracuse Consulting
The panelists discussed their experience and offered advice with regard to planning for acquisitions, mergers, and succession at an advisory firm. Junette McCarthy and Jon Webb, drawing from their experience both buying and selling firms, shared advice on what to do (and not do). Todd Fulks, having overseen many deals at Advisor Group, one of the country’s largest broker dealers, also provided recommendations for evaluating possible acquisitions and planning for succession.
Annuity Questions, Answered
Presenters: Michael Finke, Wade Pfau and David Blanchett Moderator: David Lau
This was the fifth session in a five-part series to educate advisors on using annuities for their clients. This session was focused on answering the attendees’ questions on annuities from the previous four sessions. Common questions included the following: “Why and how do I bill on commission-free annuities?,” “Which is best for an annuity - qualified or non-qualified money?,” “Are some annuities better than others at different ages?,” and “Are there annuities available that allow multiple contributions during the years of accumulation?” Advisors who attend all five sessions by September 30, 2021 will receive a free Annui-t tshirt!
Yoga for all levels
Instructor: Ashley TaylorModerator: Robert Huesbcher
At Advisor Perspectives we pride ourselves on a healthy work-life balance and started our virtual summit with yoga led by our own Ashley Taylor. Ashley explored foundational poses through an alignment-based practice. Focusing on grounding down and elevating up we worked our way through a practice incorporating standing postures, twists, forward folds, and hip openers. This yoga can be done at any time and we encourage you to watch this or save this link to use in the future.
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