Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that a recent survey from Charles Schwab indicates that advisors see technology as the biggest driver of change in the RIA industry, with the growing number of AdvisorTech solutions as the most frequently cited tech-related driver of change. Further, Artificial Intelligence (AI) was the most cited factor driving industry growth during the next 3 years, with client data integration as a primary area for improvement, suggesting an opportunity for AI tools to help advisors make the most of the significant amount of client data they possess (possibly saving time in the process) and potentially offer a deeper planning experience for their clients!
Also in industry news this week:
- A recent survey found that while 1/3 of advisory firms are currently using AI tools, another 1/3 are fearful of doing so, indicating that while some firms are eager to be early adopters of this technology, others are taking a wait-and-see approach, perhaps as regulation surrounding this technology evolves over time
- National RIA Creative Planning recently received an eye-popping 23X earnings valuation in its sale of a minority stake to a Private Equity (PE) firm, indicating that some acquirers are prioritizing a firm’s depth of integration and consistency (and the growth prospects it supports), and not just its size, when making investments and setting a value for advisory firms
From there, we have several articles on retirement planning:
- Why now could be a good time for clients nearing and in retirement to trim their equity allocations (perhaps as part of a regular rebalancing strategy), despite the potential temptation to be overweight stocks in the current hot stock market
- Why contingent deferred annuities could serve as a middle ground for advisors and their clients who want additional protection from longevity risk without giving up control over their assets
- How a “bond tent” approach can help advisors and their clients reduce sequence of return risk without increasing longevity risk in the process
We also have a number of articles on client communication:
- How advisors can craft effective stories that can help clients and prospects better understand technical planning topics and the value the advisor provides
- Why individuals and companies that have the ‘best’ story sometimes prevail over those that might have better ideas or products
- 5 types of stories for advisors to have in their back pocket to deal with a variety of client circumstances
We wrap up with 3 final articles, all about spending on children:
- Why some parents are cutting back on financial support for their adult children, and the strategies they are using to do so
- How providing “helicopter money” can unintentionally stunt a child’s path to financial independence from their parents
- Why buying kids the highest-quality goods could give them a skewed perspective on what ‘normal’ purchases look like and the need to balance financial limitations with their ‘wants’
Enjoy the ‘light’ reading!
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