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Weekend Reading For Financial Planners (March 9-10)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that RIA clients of an insurance broker providing Errors & Omissions (E&O) coverage saw a 213% increase in claims paid in 2023, attributed to significant jumps in suitability claims (likely stemming from the 2022 market downturn) and claims related to wire fraud. Which suggests that financial advisory firms could potentially mitigate their potential exposure to future exposures by reviewing asset allocations with clients more frequently (to ensure they understand and approve of the advisor’s recommendations) and by maintaining strong policies and procedures related to client wire transfers (and ensure firm staff is trained on them!) to prevent fraud.

Also in industry news this week:

  • A recent survey has found that a majority of prospective financial planning clients across all age brackets are open to working with a remote advisor, creating opportunities for advisors to grow their businesses and for clients to find the ‘best’ advisor for their needs, regardless of their location
  • A federal judge has ruled that the Corporate Transparency Act, which requires small business entities such as LLCs and corporations to report identifying information on their “beneficial owners”, is unconstitutional, raising questions about whether businesses (including certain non-exempt financial advisory firms) will be required to comply with its requirements

From there, we have several articles on practice management:

  • Why many RIAs are experiencing high staff turnover and how a more deliberate approach when hiring could lead to more successful hires
  • The key behaviors that can help a newly promoted manager succeed, including the need to set and communicate clear goals and the ability to provide regular feedback to team members (without micromanaging)
  • How firms can avoid wrongful termination lawsuits, from establishing clear policies in employment agreements and employee handbooks to considering whether to offer departing employees a severance package

We also have a number of articles on investment planning:

  • Why the well-known (and frequently judged) “60/40” portfolio could have a bright future, despite the poor returns it experienced in 2022
  • While a diversified investment portfolio can offer significant risk-management benefits, it also tends to come with periods of underperformance that can be challenging for investors to withstand
  • Why U.S. stocks have dominated their international counterparts during the past decade and whether it still makes sense to have exposure to international equities

We wrap up with 3 final articles, all about decision-making:

  • Why research suggests that individuals make their best financial decisions in their early 50s and how advisors can support clients across the age spectrum based on their unique skills and weak points of view
  • Why it’s important to recognize that there often is no “Secret Option C” when it comes to make a challenging decision with 2 distinct options, and how advisors are well-positioned to help clients overcome the tendency to put off these tough choices
  • How a structured framework can help advisors make decisions when a seemingly unlimited number of options are available, from choosing a niche to deciding what to discuss when leveraging content marketing

Enjoy the ‘light’ reading!

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