Among financial advisors, 57% havereported spending a significant portion of their time discussing non-financial topics with clients. To retain clients, advisors need to provide a more connected and emotional financial experience to help clients achieve and sustain financial freedom. The role of an advisor is changing, and advisors should use technology for the more technical aspects of the job, to focus on the emotional, human-to-human connections. As advisors’ roles evolve, they face ongoing challenges of capacity and scale. To respond, they must be intentional about how they use their time, where they invest, and the new skills they develop. My guests will delve into this topic, and why it requires the right infrastructure to maintain capacity, and how advisors can use specialization, partnership, technology, and operations to gain capacity and grow.
Financial Planning
The 10 Most Important Things I Tell Clients
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Charitable Giving, Looking Back and Forward
Donors were again very generous in their support of their favorite charities in 2022 despite inflation and poor performance across the financial markets.
How Does Donating to Charity Reduce Taxes?
Here’s an article to help clients better understand the tax benefits of charitable contributions.
Lessons from a Deeply Offensive Gaffe
No advisor would dream of engaging in the kind of behavior that occurred at Purdue University in early December.
What it Takes to Be an Elite Advisor
If you are competing with the best of the best, how do you rise above the competition?
Client Values Matter More than Your Tech Stack
We turn fantastic conversations with clients into risk profiles, performance reports, and various financial documents that have little meaning to them and their values.
Hedge Fund Managers Score Tax Break While Keeping Investment Control
Word is out among hedge fund managers on how to get tax breaks for giving to charity - without actually handing over their money just yet. They can even keep it in their funds.
How Custodial Competition Will Transform the Advisor Space
It’s big news that Envestnet is moving into the RIA custodial space and will soon be competing head-to-head with its biggest integration partners: an expanded Schwab platform, Fidelity and Pershing. I suspect that this is just the first of many so-called software “platforms” that will jump into the custody competition.
A Powerful New Tool Transforms How Billionaires Give Fortunes Away
Ray Dalio, founder of the world’s largest hedge fund, has one.
Will Your Clients' Retirement Resources Cover Long-Term Care?
The greatest financial risk for depleting retirement resources is an unexpected and lengthy stay in a long-term healthcare facility.
My Biggest Epiphanies in 2022
I learned a lot in 2022. Here were my biggest epiphanies.
To Deliver a Transformative Experience Think Like a Client
Advisors must redesign their entire approach, starting from the client's point of view.
Will RIAs be Liable for Failed Retirement Income Planning?
Let me share a story of an RIA who will be forced to mount a legal defense because of a lawsuit that is likely to be filed by two of his retired clients.
Challenging Morningstar’s Safe Withdrawal Rates
Morningstar’s latest research showed higher safe spending rates across all asset allocations over all time horizons. I don’t agree with those results.
Tax Season Gets a Gen Z Revamp on TikTok
Welcome to tax season, TikTok edition.
Four Steps to Grow Your Client Base
I've put together four steps to grow your client base – this month.
Gimme a Break, Bro – Stop the TikTok Grifters
Can you believe these grifters hawking indexed universal life (IUL) insurance on TikTok? Here’s the actions I’m taking to put an end to this predatory nonsense.
U.S. Workforce: December 2022 Update
We've updated our monthly workforce analysis to include the latest Employment Report for December. The unemployment rate dropped to 3.5%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 223K.
The Dangers of Monte Carlo Simulations
Probability-based retirement income strategies are highly sensitive to the capital market assumptions used in Monte Carlo analysis. Seemingly small changes in those assumptions can mean the difference between projecting a comfortable lifestyle and financial ruin.
Plan for More Wealth Destruction
Tight monetary policy and rising government debt will drive a regime of high interest rates, depressing stock prices and destroying the wealth of clients, most severely those at or near retirement.
How to Build a Bond Ladder Using ETFs
Build your ladder with multiple target-maturity ETFs representing different segments of the bond market, with different target years.
The Latest Look at the Total Return Roller Coaster
Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,364 for an annualized real return of 5.8%.
Inflation Reset Lets Wealthy Americans Give Heirs Even More Tax-Free
Even after a year in which the vast majority of the wealthiest Americans lost a chunk of their fortunes — and in some cases, lost big — in at least one way, they’re still coming out ahead.
Marketing Insights from the Trenches
I’ve learned a lot through my work consulting with advisors. Here are some marketing insights to help you plan for 2023.
The Trends That Will Shape the Advisory Profession in 2023
I’m looking over my previous “trends” article, published at this time a year ago, and some of my ”fearless predictions” were outlandish then but now seem ordinary. That means I did something right.
Find the Best Broker-Dealer/RIA Partner for Your Practice
Switching broker-dealers/RIAs is a monumental decision for financial advisors. This white paper will teach you how to successfully evaluate potential B-D/RIA partners and find the perfect fit for your financial practice by sharing valuable insights and advice from advisors who’ve been through the process of switching firms.
NewsLetter - December 2022
Enjoy the latest Newsletter from Harold Evensky.
Reflecting Back on a Testing Year and Looking Ahead to 2023
The market dislocations and skyrocketing inflation of the last year put longstanding retirement maxims to the test and that test isn’t over yet.
Our Top 10 Most Popular Practice Management Articles of 2022
As is our custom, we conclude the year by reflecting on the 10 most-read practice management articles over the past 12 months. Tomorrow, we will highlight the 10 best articles you probably missed.
Our Top 10 Most Popular Investing Articles of 2022
As is our custom, we conclude the year by reflecting on the 10 most-read investment and planning articles over the past 12 months. Tomorrow, we will highlight the 10 most-read practice management articles.
Talking with Aging Parents about Health and Wealth
Here are nine tips that will help your family members stay healthy and financially secure as they age.
Spending Less on Gifts This Year? Congratulations
The research is clear: Americans are becoming less generous over the holidays. Not to sound too much like a Scrooge, but this is not necessarily a bad thing.
The 4% Rule Did Not Become a Whole Lot Easier
Allan Roth’s recent article, The 4% Rule Just Became a Whole Lot Easier, promises too much, makes inaccurate comparisons and blurs the notion of risk.
Online Banks versus Traditional Banks: Which Is Best for Your Clients?
Here’s a breakdown of the pros and cons of trading in your traditional bank for a virtual banking experience.
Three Strategies to Strengthen Household Balance Sheets
I will use an example and an actuarial model to compare the efficiency of three strategies for strengthening a retired or near-retired client’s balance sheet under both a lower and a higher assumed future inflation scenario.
How to Prepare for 2023 With Student Loan Relief Unclear
Confused about whether your student loans will be forgiven? Everyone is.
The Incredible "Silver Bullet" Potential of ChatGPT
ChatGPT, the new AI chatbot, offers a short-term opportunity for savvy financial advisors. But it has long-term consequences for all advisors.
Financial Planning for Female Clients
It’s common knowledge that, for many Americans, the greatest fear is outliving their retirement nest eggs. With retirement having the potential to stretch for decades, it’s no wonder people are worried. But for women, the risk of not having adequate funds for retirement is even greater than it is for men. As advisors, we must understand and address the financial planning challenges unique to women.
529 Plans: Custodial versus Individual
One thing to consider when opening a 529 plan is whether it should be a custodial or individual account. While both allow you to save for college costs and enjoy some tax breaks, they differ in terms of who has control of the account and the assets in it.
The Good Fit Meeting
Here is a structure for the first meeting to make prospects feel understood.
The Time to Define Insurance Advising is Now
“Verb sales” in retirement income, or in liability minimization, needs regulatory support immediately. By “verbs,” I mean selling services – such as financial planning – rather than “nouns” – such as investment products like annuities.
The Best 529 Plans for 2023 and Beyond
We’ve broken down nine of the best 529 plans.
Optimal Risk Levels for PLIB Strategies: Personalization is Key
More balanced risk strategies in PLIBs are likely to be optimal (e.g., 40-50% equities), although the ability to personalize the risk level is important based on the household situation and preferences.
Four Questions to Ask Before Selecting a TAMP
Here are four questions independent financial advisors should ask before choosing a TAMP.
Road of Retirement: The Process of Managing Retirement Income
As clients age and their financial lives evolve, most reach a point where they stop accumulating investment assets and begin taking distributions from their investment and retirement portfolios. This presentation introduces financial advisors to a comprehensive approach to creating longevity-oriented investment portfolios and managing retirement income.
Lessons on Insane Customer Focus
The following is a story about a company that’s become wildly successful by having an intense focus on consumers’ needs and behavior.
The Drivers of the Efficiency of Protected Lifetime Income Benefit (PLIB) Strategies: Part 3
I explore some of the factors driving the superiority of PLIBs, in particular lapsation, mortality experience differences, accessing the equity risk premium, and the marginal role of annuities as part of a retirement strategy.
The Alternative Tech Stack
Let’s look at the powerful feature set an advisory firm could put together from a collection of the higher-rated, low-market-share programs and solutions that I’ve collected from past surveys, many of which you may not even be aware of.
Finding Your Clients' Financial Comfort Zone
How can advisors turn their clients’ focus from dollars to dreams? How can making a clear connection between their real and financial lives create a meaningful client experience and add value to an advisor’s service?
Financial Planning Needs a Makeover!
Financial planning can be opaque, vague, and perceived as non-valuable by the consumer. I’m about to give financial planning a transparency makeover.
Playing Inflation Russian Roulette in Retirement
The question most asked by investors late last year, as Treasury bill yields hovered just above zero was “Where can I go for yield?” followed soon after by “What can I do to protect myself from inflation?”
Do Clients Need to Know Your Net Worth?
A planner who fails to follow their own advice is hardly going to inspire confidence in prospective clients.
How To Re-Connect and Book Appointments with Past Prospects
You will lose clients and fail to gain new ones unless you make dramatic changes right now.
Contrasting Protected Lifetime Income Benefits (PLIBs) Against Other Annuities (Part 2)
This article explores the efficacy of PLIBs against a retirement income strategy that does not include an annuity, as well as strategies which allocate to either a SPIA, a DIA, or a GLWB. I used a utility framework for this analysis.
Three Insurance Tips That Add Value
Here are three ways you can add value in the context of insurance issues.
Are You Selling Life Rafts or Sailboats?
If you aren’t willing to niche, at least decide whether you are trying to help your clients thrive or survive. Then build a message around one of those themes. Are you selling them life rafts (survive) or sailboats (thrive)?
The Symptoms of Lackluster Value
What does lousy value look like, and how do you overcome that?
Introducing Protected Lifetime Income Benefits (PLIBs): Part 1
This piece introduces the protected lifetime income benefit (PLIB) to describe an emerging category of longevity-protected solutions.
Inflation, Interest Rates and Retirement Planning
Lifetime annuities in concert with allocations to stocks, TIPS, bond ladders and other diversified investments help retirees weather changing conditions regarding inflation and interest rates.
How Vanguard’s Advisor's Alpha Helps Advisors and Their Clients
Over more than two decades, Vanguard Advisor's Alpha® has shown how advisors can add value, or alpha, through relationship-based services such as financial planning, discipline, and guidance, rather than by trying to outperform the market. Vanguard’s Investment Advisory Research Center, led by Fran Kinniry, is charged with exploring how advisors provide value to investors.
This year has served as a harsh reminder of why so many investors seek a trusted advisor to navigate their financial journeys. During market declines, investor emotions easily crowd out wisdom and long-term thinking. However, through financial planning and behavioral coaching, advisors can help investors improve their chances of reaching their long-term financial goals.
Gifting Strategies for HNW and UHNW Clients
My guest today will discuss how he works with UHNW/HNW individuals and families when it comes to charitable giving and meeting philanthropic needs. We will talk about the issues individuals should consider when making a gift of a business interest to a public charity. We will discuss the benefits for donors in making the decision to give a gift of a business interest to a public charity, the types of business interests that a donor may give to charity and the trends he’s seeing across his client base when it comes to charitable giving strategies such as this one.
Dangerous Measures: The Fine Art of Calculating Returns
The person responsible for translating the math chapter of my book, Wealth Management, into Japanese told me, “You give me much headache.” Welcome to the math chapter.
Creating a Goals-Based Retirement Income Plan
Join Dr. Michael Finke as he shares the steps for developing a goals-based financial plan, the importance of understanding the impact of investment risk, and approaches to funding inflexible spending. Sponsored by RetireOne and Protective.
The Dangerous Gap in Succession Planning
The succession plans that come off with the fewest disruptions are those that are implemented over an extended period, especially when the successors are not family members.
Tax Planning and Health Insurance Premium Subsidies under the Affordable Care Act
A matter that can have large impacts on the marginal tax rates faced by individuals who obtain health insurance coverage through the ACA exchanges is the reduction of the tax credits (or subsidies) for health insurance coverage as incomes increase.
How a Nasty Exchange on LinkedIn Led to a New Non-Profit
What problem could be solved or what issue or challenge could be addressed that would offer wide appeal to the expansive advisor community? The answer that made sense to me was financial education.
Financial Tips for Couples Getting Remarried in their Retirement
Here are some suggestions to consider when remarrying.
How whole life can be a life stage planning tool
Clients often assume that their need for life insurance ends when they stop working. In fact, whole life insurance can play an important role in your client’s retirement income strategy. For higher income earners, a whole life policy may also be an effective way to help protect income and accumulate additional funds for retirement. Here to discuss the role whole life insurance can play in your clients’ retirement strategies is Neil Drzewiecki.
Let ESG Client Returns Speak for Themselves
There is a long history that proves ESG’s viability and more than 2,000 empirical studies that show little absolute difference in performance by adopting it as a criterion for analysis.
Client Acquisition Techniques of Top Advisors
Are you just an educator or can you motivate prospects to implement your ideas?
The Obstacles, and Solutions, to a Post-AUM Profession
Less than a month after I recommended that an organization – specifically NAPFA – set new membership standards regarding an RIA firm’s revenue model, one has risen to take up the challenge.
The Benefits of Independence as a Female Advisor
As veterans of this male-dominated industry, we have faced our fair share of challenges and uncertainty. However, that led us to venture out on our own and start solo planning firms.
Stop Saying 1% – Spell It Out in Dollars!
If you believe that 1% of AUM is transparent, you’re overlooking one obvious thing. Most of your prospects struggle to do basic math in their head. Spell it out in hard dollars!
The Challenges of Family Wealth Preservation
There is an adage about three generations of wealth – the first generation makes it; the second generation maintains it and the third generation spends it.
Three Crucial Lessons from the Great Recession
An old saying reminds us, “There’s no lesson in the second kick of a mule.” Once you have learned something the hard way, nothing can be gained by repeating the experience.
The Bright Side to 2022’s Annus Horribilis for Investments
This year has been disastrous for stock and bond investors. But things are not as grim when viewed in a financial planning context that considers how the assets will be used, i.e., the liability or expense side of the household balance sheet.
Breakaway Implications: The Impact Your Firm Partner Can Have on Efficiency
You may think that going independent means you’ll have less time for client interactions—after all, you’ll have an office to run. Well, that’s not true for breakaway advisors who partner with the right firm. A recent Cerulli Associates study breaks down how much time breakaway advisors save by partnering with Commonwealth. You’ll get stats such as:
Take control of how you spend your time. Are you ready to make an informed decision about your independence? Get started today.
Emerging Trends in the RIA Profession
Among financial advisors, 57% have reported spending a significant portion of their time discussing non-financial topics with clients. To retain clients, advisors need to provide a more connected and emotional financial experience to help clients achieve and sustain financial freedom. The role of an advisor is changing, and advisors should use technology for the more technical aspects of the job, to focus on the emotional, human-to-human connections. As advisors’ roles evolve, they face ongoing challenges of capacity and scale. To respond, they must be intentional about how they use their time, where they invest, and the new skills they develop. My guests will delve into this topic, and why it requires the right infrastructure to maintain capacity, and how advisors can use specialization, partnership, technology, and operations to gain capacity and grow.
Nebo - GMO’s New Asset Management Platform
The advisors who are listening to this podcast will start a financial-planning process with a risk assessment for a client. That exercise will evaluate how much volatility the client can tolerate. It will serve as input to constructing a portfolio that optimizes returns given a client’s risk tolerance.
My guest today is here to explain why that is the wrong approach. The problem is not to minimize volatility, he says, but to figure out how money a client needs, when they need it, and to solve for that problem.
Stop Delivering Value – Try This Instead
The first and most important thing you need to figure out is what a potential high-net worth client is looking for when they come to see you.
The Five Competitive Forces Affecting RIA Profitability
The Harvard Business School’s Michael Porter is the leading authority on industry structure and competitiveness. His framework shows how RIAs should think strategically about the current state and future evolution of their industry.
The Role of Whole Life Insurance in Retirement Planning
Clients often assume that their need for life insurance ends when they stop working. I spoke with Neil Drzewiecki, the head of life products for MassMutual Life Insurance Company, about how whole-life insurance can play an important role in your client's retirement income strategy.
Declining I Bond Rates Make These Alternatives Look More Appealing
Is it time to move beyond I bonds?
Delaying Your Social Security Has Rarely Been This Profitable
It's no secret that delaying the start of Social Security benefits typically means you'll get more money in retirement. And waiting just got even more worthwhile thanks to the program’s big cost-of-living adjustment set for next year.
Creating a Best-In-Class Client Experience in Your Family Offices
When it comes to elevating the “customer experience” to improve client satisfaction and results, today’s family offices could learn a thing or two from Starbucks.
What We Learned in Fiduciary September
Reg BI is the most divisive issue in the fiduciary discussion and was a focus of the discussion during September’s event.
This Bias Impedes Your Success
Your inability to recognize the biases you have prevents you from managing a more successful practice.
I Bond Hacks For Bypassing $10,000 Limit and Scoring Better Returns
The sleeper hit of 2022 investing is about to lose some of its luster — but it still might be one of the best places to store your cash.
Longevicide Will Erode Clients and Assets
I know what you’re thinking: “Longevicide? What is that?”
Rich Millennials Have Lost Confidence in Stock Market, BofA Says
Wealthy young Americans have lost confidence in the stock market as a primary vehicle for creating wealth and are increasingly turning to alternative investments to fund their futures, a Bank of America survey has found.