Saturday, May 11, 2024
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Weekend Reading For Financial Planners (May 11-12)

Enjoy the current installment of “Weekend Reading For Financial Planners”– this week’s edition kicks off with the news that a recent analysis from Morningstar suggests that the Department of Labor’s (DoL’s) new Retirement Security Rule (aka Fiduciary Rule 2.0) could save retirement plan participants $55 billion over the next 10 years (due to an expectation of more low-cost fees being offered in plans) and those rolling over workplace plans into IRAs to purchase annuities another $32.5 billion (thanks to expected reductions in commissions and the embedded costs in these annuities). Nonetheless, for these potential benefits to come to pass, the rule will likely have to survive legal challenges, including a lawsuit filed led by an insurance industry lobbying group seeking to halt implementation of the rule (which is set to take effect in September), which argues that the rule violates the U.S. Congress’ intent in passing ERISA and that the DoL overstepped its authority in adopting it.

Also in industry news this week:

  • The latest Social Security trustees report offered a slightly rosier picture for the health of the various Social Security trust funds thanks to improved economic conditions, though they warned that time is running out for legislators to take action to ensure the system will be able to pay out full benefits beyond the early 2030s
  • RIA custodian Altruist has raised $169 million in its latest funding round, giving it a $1.5 billion valuation and added capital to fund technology and staffing upgrades as it seeks to challenge Schwab and Fidelity in the RIA custodial space

From there, we have several articles on retirement planning:

  • Why considering a client’s retirement time horizon and spending flexibility could lead to more accurate (and often higher) safe withdrawal rates than the simpler “4% rule 
  • While many financial advisors focus on preventing clients from depleting their portfolios in retirement, they might be overlooking the ‘risk that clients might underspend and not achieve their retirement lifestyle goals
  • How the creator of the “4% rule is now incorporating inflation and equity valuations when calculating safe withdrawal rates

We also have a number of articles on advisor marketing:

  • A 4-step process that can help financial advisors craft better stories to use with clients
  • The best and worst times to use emotional storytelling to communicate an important message to clients
  • How effective storytelling can increase the likelihood that an advisor’s message will resonate with clients amidst a sea of potential information sources 

We wrap up with 3 final articles, all about vacations:

  • How taking a vacation can provide a sense of clarity that can lead to positive changes in one’s ‘normal‘ routine
  • How to decide how much to spend on a vacation, from planning out a year’s worth of trips in advance to being aware of “luxury creep” 
  • Why money spent on vacations and other shared experiences could be considered an investment in an appreciating asset

Enjoy the ‘light reading!

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