Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that Charles Schwab and other brokerage platforms are planning to increase the interest rates they pay on client cash held in their platform or cash sweep programs, which could boost the income of clients who maintain a cash balance in their accounts. Notably, the move could have follow-on effects for the industry in the longer term, including the potential for custodians to start charging RIAs platform fees to compensate for the lost revenue from tightened net interest margins resulting from the higher cash sweep rates.
Also in industry news this week:
- A new survey of RIAs indicates that about 1/3 of respondents have been in serious M&A negotiations during the past 3 years and that many firms are embracing a hybrid work environment, with employees splitting time between working from home and from the office
- The IRS on Thursday issued final regulations regarding Required Minimum Distribution (RMD) requirements for those who inherit retirement accounts, indicating that Non-Eligible Designated Beneficiaries subject to the “10-year rule” will be required to take RMDs starting in 2025 if the decedent had already reached their required beginning date
From there, we have several articles on investments:
- Why advisors might still consider using actively managed mutual funds even as the number of active ETFs (which often have lower expense ratios) has grown
- A study finds that while large-cap equity funds make up the top category of active ETFs, active fixed-income ETFs and funds using derivative and options strategies have attracted more than $30 billion in assets as well (though these assets continue to pale in comparison to those held by passive ETFs)
- How advisors can evaluate and compare active ETFs to decide whether their potential benefits (and typically higher expense ratios) outweigh an approach of using passive ETFs as building blocks to create a custom active strategy
We also have a number of articles on marketing:
- A branding expert offers advice for new advisory firm owners considering what to name their business, from whether to use the advisor’s name to the need to avoid duplicating the name of another firm
- Why some firms decide to change their name and the creative and administrative steps required to do so
- Why descriptive logos that explain what a firm offers can be particularly effective for branding purposes
We wrap up with 3 final articles, all about wellbeing:
- A new study finds that there is no limit to the relationship between income and happiness, though certain factors can mitigate this relationship
- How one individual with a net worth in the hundreds of millions of dollars spends his time (and money) in the pursuit of internal happiness
- How the established U-shaped curve of happiness appears to have changed during the past decade, with young adults on average seeing declines in life satisfaction
Enjoy the ‘light’ reading!
