Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that NAPFA has announced that it will no longer exclude advisors who receive up to $2,500 in annual trailing commissions from previous product sales, if they agree to donate that money to a non-profit organization and are otherwise fully dedicated to fee-only principles with their clients going forward. The change has led to strong pushback from some of the organization’s own members, who argue that allowing any level of commissions is a step away from NAPFA’s “fee-ONLY” roots, and will dilute the organization’s brand as being the home of fee-only advisors when they’re not purely fee-only anymore… while others suggest that the policy simply recognizes the practical challenges that previously commission-based advisors face when making the transition to fee-only models (including that sometimes it’s virtually impossible to get insurance companies to stop paying trails on old policies!).
Also in industry news this week:
- Concerned about the (insufficient) frequency of its examinations of RIAs, an SEC committee has recommended that the regulator allow third parties to conduct these examinations and to request Congressional authorization to charge investment advisers under its purview a ‘user fee’ that would provide steady funding to the SEC’s examinations division
- A recent report has found that 72% of new advisors drop out of the industry, creating an incentive for firms to invest in their recruiting, onboarding, and training practices to be able to grow their headcount amidst a wave of expected advisor retirements in the coming years
From there, we have several articles on cash flow and spending:
- How individuals can balance the desire to spend on small luxuries today with the need to save for the future
- How advisors can help younger clients get on a sustainable spending and savings path
- While research has found that, broadly, greater income can lead to increased happiness, a variety of mediators, from an individual’s baseline happiness level to the amount of free time they have, can affect this relationship
We also have a number of articles on retirement planning:
- Why advisors and their clients entering or in retirement might consider income annuities as a replacement for the bond portion of the client’s portfolio
- How advisors can support workplace retirement plan sponsors in deciding whether to include annuity options and, if so, which to choose
- While a proposed hybrid annuity/long-term care insurance product could help consumers and insurance companies mitigate their risk, it has yet to get traction
We wrap up with 3 final articles, all about the relationship between hard work and success:
- While those who have reached the top of their fields might appear to perform effortlessly, getting to that point likely took thousands of hours of practice
- Why finding meaning in one’s career could be superior to seeking wealth for its own sake
- How luck (both good and bad) shaped the course of 1 advisor’s career path
Enjoy the ‘light’ reading!
