Financial planning requires continued learning

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What do real financial planners study?

A few weeks ago, I was on the organizing task force of the Financial Planning Association’s Retreat Conference. Five certified financial planners from Tennessee were among the 400 attendees described as the “Thinkers, Thought Leaders Change Makers” of the financial planning profession.

The opening keynote address was a powerful and moving presentation by Candy Chang, an urban space artist and mental health advocate.

Her “Before I Die” project is a thought-provoking exercise very relevant to goal-setting in your personal financial plan. On huge chalkboards, in cities around the world, she invites passersby to reflect upon their mortality and consider the things that matter most (https://beforeidieproject.com/).

With anonymity, people write “Before I die” I want to … travel, spend more time with family, adopt a child, learn a new language, retire, start a business, reconcile a wounded relationship, get out of debt, buy an RV, etc.

Small lifestyle changes can have big results

James Clear, author of “Atomic Habits,” described the impact of how small changes to our lifestyles can have remarkable results. His challenge: “Change your habits and get 1% better every day.” With what he calls the compounding nature of habits, small changes to your spending, savings and debt management can gradually have a significant impact on your ability to create and sustain wealth. According to Clear, changing habits begins with an “identity change.” Who is the person who can achieve the outcomes that you want? Be that person.

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In a session titled “The Burned Out Family Caregiver,” Annalee Kruger, founder of Care Right Inc., explained how she “strives to help families understand the benefits of proactive planning and ongoing discussions about the aging of their loved one.” Her presentation described tools and resources for caregivers to have a plan in place versus waiting until a medical crisis arises in the family (www.carerightinc.com). In particular, her “Grab and Go” notebook — a binder containing all of the key contacts and documents a senior might need in a crisis —  is especially valuable.

Sonya Dreizler is a consultant on values-aligned investing, i.e., “investing that drives social and environmental progress through investments.” She described the public’s increasing interest in impact investing based on factors such as values, environmental sustainability, governance, social responsibility, etc. Dreizler expressed her concern about the lack of (political and public) civility that is impeding progress on these issues.

Barbara Coombs Lee, author of “Finish Strong,” said, “Dying in America is a terrible mess.” According to Lee, there are woeful imbalances between benefits and burdens during end-of-life care.

Financial planning: Living and dying well

For example, 1 in 4 people who enter the ICU with documented “Do Not Resuscitate” orders get CPR. And, 3 in 4 patients with a documented preference for comfort care get at least one aggressive medical intervention they didn’t want. She teaches people how to become good advocates for themselves and their loved ones when suffering through fruitless procedures and prolonged stays in intensive care.

Real financial planning is about more than yesterday’s closing stock market data. Of course the money matters, but from cradle to grave, the financial planning process is about living and dying well.  

Paul Fain is a certified financial planner and president of Asset Planning Corp., a financial planning and investment management firm based in Knoxville. He welcomes comments and column ideas, but cannot offer specific personal financial advice. Write to him at paul@assetplanningcorp.com.

Introducing Bodeswell: Personal Financial Planning To Help You Live Your Best Life

Matthew Bellows spent nearly a decade creating the sales engagement market category as a founder of Yesware. Now he has set out to reinvent personal finance. We sat down to talk about how he’s going to do it:

“No matter how confident, respected or successful we are in the daytime, we all have nights when we stare at the ceiling and worry. Sometimes we think about the past. But most of the time, our fears are about the future. “Will I be able to help my kids with college?” “Can I help mom with her long term care?” “What if I lose my job?” No matter how much money we have, we never completely lose those fears.”

“Or we dream about what could be… “Can we afford to buy that house on the lake?” “Can I quit my corporate job and start a company?” “Can I live the life I want to live?”

Today he is announcing BodesWell (bodeswell.io) – a new software company to help us answer those questions. 

The planning, timing and funding of weddings, colleges, jobs, kids, houses, healthcare, retirement and legacies are complicated and filled with risk. BodesWell seeks to remove the stress and doubt surrounding big financial decisions and give you a roadmap to achieve your goals. They make software to take away the overwhelming aspects of financial planning so you can sleep well at night.

This sounds like financial planning. Isn’t this already done?

Financial Services is the least trusted industry in the country. Almost 2/3rds of people with financial advisors don’t feel like they have someone to talk to about money.

There are hundreds of Fintech startups, but this core problem isn’t solved in a comprehensive way: more Americans than ever before feel like they can’t afford to get married. Many new parents are unprepared for spending the $233,000 before college that the average child costs. Almost  80% of Americans don’t feel ready for retirement. Even among wealthy Americans, half of us have no idea how much we need to retire.

The BodesWell Approach

By combining personal financial data, economic models of the future, and an incredibly simple interface, BodesWell takes away the overwhelming aspects of financial planning so you can build the life you want. 

They will charge a per month or per year fee that supports the software. If they have partners or earn referral fees, all those relationships will be clearly disclosed. They will not hold assets under management and instead will focus on being the dashboard of your financial life. 

To me, BodesWell has the opportunity to benefit almost every single human being on the planet. Just about everyone lays awake at night and wonders about their future. Based on my research, I was surprised to discover there’s no single software solution that addresses this core human need.

If this resonates with you please click over to bodeswell.io and sign up for their beta, starting this summer!

Financial planning jargon could be costing you money

Financial planning has a lot of confusing jargon. Here is a short course on what some of these things really mean.

Financial planners get paid in three ways: commissions, fees and commissions and fees. Period. Fee-only planners charge retainers, hourly rates or a calculation based on a percentage of net worth or assets that they manage. While some firms use the term fee-based, there is no such thing. These firms collect fees and commissions.

How someone gets paid can create conflicts of interest. Someone who earns commissions receives a benefit through selling you something, someone who manages assets benefits from the more assets they manage, and even those on an hourly have conflicts around how efficiently they perform the tasks at hand. Someone who is a fiduciary is expected to put your interests ahead of their own. Costs may not be different among fee structures because fee-only firms may still help you meet your objectives with products such as life insurance where a commission is earned by someone, just not your planner.

Guarantees are also confusing. Any investment provides up to four things: safety, income, growth and tax advantages. The more you have of one, the less you will have of the others. When something offers guarantees, there has to be a price to pay. The price will be lower returns or your money’s accessibility or how complicated the guarantee is.

Here are some things to think about when you are looking for advice.

Understand certainty vs. uncertainty. For example, if you have a portfolio that has had a lot of appreciation but you want to switch advisers, be alert if that adviser wants you to sell everything in order to invest with them. Taxes are guaranteed, returns are not. Most advisers should be willing to work around assets that have appreciated, utilize them for gifting or have a compelling reason why changes should occur.

Know what you are paying for. Understand what the scope of services will be and the capacity of the advisory firm to carry those services out. Turn this understanding into agreements rather than simply expectations.

Keep asking questions. If something does not seem right to you, you have the right to ask about it. If the explanation still does not make sense, you have the right to have it explained in a way that does. While a good advisory relationship is based on trust, the trust should be insured by making things understandable.

Spend your life wisely.

Ross Levin is the chief executive founder of Accredited Investors Wealth Management in Edina.

How Parents’ Financial Planning Influences Adult Children

Two older adults and a young adult (Photo: Thinkstock)

Twenty-seven percent of Americans are concerned about their parents’ financial security in retirement, and they are twice as likely to lack confidence in their own retirement prospects as those who are unworried about their parents, TIAA reported this week.

This finding was based on an online survey conducted by KRC Research in February among 1,003 U.S. adults.

Fifty-seven percent of respondents also reported that their parents’ financial planning for retirement had influenced their own planning. Forty-four percent said they avoided taking on significant debt, and 38% said they had consciously limited their everyday spending on nonessential items.

“We’ve seen firsthand what the data shows: People who are concerned about their parents’ financial well-being in retirement may be sacrificing their quality of life today out of concern for their own financial future,” TIAA’s chief financial planning strategist Daniel Keady said in a statement.

“A good financial plan that includes education, advice and lifetime income options for retirement can help build confidence that allows people to enjoy life today, without forfeiting their future retirement security.”

The TIAA survey found that pessimism about retirement security increased with age.

According to the survey, 52% of millennials described their parents’ financial outlook as excellent or very good, while only 35% of Gen Xers and 26% of baby boomers did so.

Their responses were similar when asked about their confidence in their parents’ current or future financial security in retirement. Only 47% of Gen Xers and 34% of boomers expressed confidence, compared with 60% of millennials.

TIAA said these confidence levels mirrored how the different generations viewed their parents’ approach to saving and investing. Thirty-nine percent of Gen Xers and 35% of boomers disagreed that their parents’ approach to saving and investing was admirable and one to emulate, but only a quarter of millennials disagreed.

Even among the one-fifth of survey respondents who said they were confident in their retired parents’ long-term financial security, 21% reported that they had some or a lot of concern about their parents running out of money in retirement.

“As the realities of financial planning change through life, parents and their children need to discuss their financial plans and concerns together to ensure they are on the same page about the future they’re envisioning,” TIAA’s director of financial planning, Shelly-Ann Eweka, said in the statement.

Is Millennials’ Optimism Misguided?

The survey found that people’s perceptions about their parents’ financial plans may not always match reality.

Seventy-two percent of millennials rated their parents’ financial outlook as good to excellent, yet only 57% of Gen Xers and 58% of boomers — the folks likely to represent their parents — rated their own financial outlook that way.

“The confidence that millennials have about their parents’ finances may actually create a false sense of security, especially when individuals mistakenly believe they will receive an inheritance (and plan their finances around it) when their parents don’t have the same plans or intention,” Keady said.

TIAA said individuals could initiate a financial discussion with their families to better understand how each other’s financial needs compare. They can also turn to a financial advisor for help in creating a retirement plan that seeks to minimize uncertainty and boost financial confidence by building lifetime income.

“Open dialogues and a well-planned retirement can help alleviate family stress and may give you permission to live your life without the worry of outliving your savings or becoming a financial burden to others,” Keady said.

As a financial advisor shortage looms, college programs look to help fill the talent gap

“We get more job offers than we have students,” Dean said.

And while that’s great for the students, the industry is still behind.

“We’re trending in the right direction, but we need to trend that way a lot faster,” Dean said.

Other schools are getting that message and adding financial planning programs of their own.

The idea for Central Washington University’s program came after the dean of its College of Business spoke with an alumnus in the CFP profession, who lamented that there were a lack of college programs.

That was in 2015, and by fall 2018 the school had hired Steele Campbell, a personal financial planning Ph.D. student at Texas Tech University in Lubbock, Texas, to help grow the program.

Today, Central Washington University has 18 students graduating from the program in June, and expects around 50 majors in the fall.

The program is special to Steele for two reasons. As a Washington native, he had to leave the state to pursue his financial planning education. Now, that is no longer necessary in order to find a CFP-registered program, he said.

Plus, he can also promise every student that they can get a job in what they are studying, which gives him a “great deal of joy.”

“I would love to take as many students as we can get into the program without sacrificing the quality,” Steele said.

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At the University of Arizona, the school’s new financial planning program is just wrapping up its first academic year.

The school had hoped for up to 20 students declare it as a major. They currently have about 40, according to Rick Rosen, program director of the financial planning program at the University of Arizona.

That includes some seniors who have rearranged their entire majors, Rosen said.

The Tucson-based school, with about 45,000 total students, offers ample exposure to Wall Street firms with offices in Phoenix, such as Charles Schwab, Vanguard and TIAA, Rosen said.

“It was a program that every one of us felt we needed,” he added. “It’s an industry that is rapidly growing.”

That goes particularly as baby boomers in or near retirement prepare to hand their wealth over to younger generations. “There clearly was a shortage in qualified people to assist in that endeavor,” Rosen said.

As the industry works to fill seats that are being vacated by older advisors, it is turning to different sources for new talent.

That also includes accelerated certificate programs, where students take about six classes and then take the CFP exam.

For advisors who do not have a college financial planning program in their area, that can mean turning to other ways to fill positions.

10 reasons why RIAs fail

Going strictly by the numbers, it’s the golden age of RIAs. The volume of financial advisors moving to independence has steadily increased year over year, according to a 2018 Schwab survey. That translates into a whopping 59% increase in the number of registrations from 2013 to 2017 — 238 firms that collectively represent $84 billion in AUM, according to the SEC.

But, as many an RIA principal has discovered, taking the plunge is almost the easy part. After that come the day-to-day strategy and practice-management decisions that make or break a firm’s long-term viability.

Here are 10 potential problem areas for new, and not-so-new RIAs, and how some experts address them.

Schwab, Fidelity, TD are poaching RIA’s retail clients

Let’s get one thing straight: The independent advisory business wouldn’t have thrived without the support of the traditional custody-and-clearing firms. Large direct-to-consumer behemoths like TD Ameritrade, Schwab and Fidelity were willing to power channels that essentially competed with them for retail clients.

Of course, there was a business reason. With larger processing volumes, trading became more efficient and the firms could keep unit costs low and generate profits to fund technology and other strategic investments. In return, advisory firms got efficient support and access to platforms that included custody, clearing, bundled service options and outsourced technology.

Even the firms that offer an alternative to traditional clearing providers, like mine, have benefited from the arrangement.

It was certainly a win-win, but with a hidden cost. Along with all the bells and whistles came conflicts of interest and self-serving revenue streams from product distribution and fees. Moreover, the mega-custodians created deep hooks into the advisor’s business operations and their retail client base.

That’s become a big problem.

First of all, marketing suppression rules — like no direct mail, no outbound sales calls — used to put a fence between retail and the accounts on the third-party custody platform. With the rise of digital marketing, it’s no longer feasible to suppress all outreach.

With the marketing rules effectively outdated, these custodians argue that the difference between bespoke and mass-customized advice should be so apparent and so valuable that advisors have no reason to worry about losing clients.

Two things bother me about those assurances:

Blaming the victim — or the advisor — for not being good enough to keep clients is a low blow when the retail side of the custody giant can use micro-targeting (based on customer data) or slash pricing to get a competitive advantage.

If not outright poaching an advisor’s current clients, the retail behemoths do seem committed to capturing their prospects —younger, mass affluent investors for whom a less costly digital and human model is quite attractive. How will advisors grow with the next generation?

Schwab’s announcement of the subscription-based Intelligent Portfolios Premier is a case in point. For a $300 upfront fee and $30 monthly you get a comprehensive financial plan, a customized roadmap, unlimited time with a CFP for advice and 24/7 access to a highly collaborative planning tool that lets the client test out their own ideas and assumptions.

Compare that offer with what a traditional advisor’s website says and you will see that the words are similar.

Which custodians have the most RIA assets?

Charles Paikert | Lists

The average investor may not understand or appreciate what’s different between the experience at Schwab and what they get from a local RIA, but they will immediately grasp the pricing difference.

No one is denying that for the biggest custodians, like Schwab, Fidelity and TD Ameritrade, entering the custody business made great sense for their shareholder value. It makes good business sense to keep the scale from custody while the firms grow their retail market share.

That said, at this point in the evolution of custody, new models, which don’t have channel conflicts, are gaining traction with advisors who want to have more control over their futures.
When they launched their custodial businesses, Schwab, Fidelity and TD were discount brokers who didn’t offer relationships or advice —that has changed dramatically.

With massive marketing dollars, they are promoting human and digital advice relationships for mass-affluent and high-net-worth investors, with technology and pricing that grabs attention.

The competition is clear, and the conflicts are just beginning.


Bill Capuzzi


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Here’s exactly how to tell if you need a financial advisor, a robot, or nobody at all

Money can be complex and intimidating, no matter how much or how little you have.

If you’ve considered seeking professional financial help but don’t know where to start, first identify exactly what it is you want to accomplish. Do you want to start investing or invest more money? Do you want to know how much you need to save to retire at 65? Do you need advice for paying off debt? Are you wondering how much life insurance you need?

The truth is that some financial decisions call for reinforcement; others, you can probably handle on your own — at least for now.

Financial advisor is a catch-all term that usually includes financial planners and investment advisors. It’s imperative to look for financial advisors who follow the fiduciary rule, meaning they operate in their clients’ best interest, and are fee-only. This means client fees are their only compensation and they don’t earn commission when you invest in certain funds or buy financial products.

A good certified financial planner can help organize your overall financial picture, including setting up a retirement saving and investing strategy; planning for big expenses, like buying a house or having kids; everyday budgeting and spending; plus tax and estate planning.

Considering a financial advisor? SmartAsset’s free tool can help you find a licensed professional near you »

You may also consider hiring a financial planner if you’re too overwhelmed or confused by your money to make big financial decisions, including how to balance multiple financial goals, manage a business, get out of crushing debt, or establish a retirement savings plan. If the alternative to meeting with a financial planner is decision paralysis, you’re better off seeking outside advice.

Investment advisors typically focus on the nuances of your investment strategy, such as what stocks or funds to buy in and out of your retirement accounts and how to minimize taxes. They can also manage your investments, but usually charge a fee of 0.5% to 2% of the portfolio.

You don’t have to be a sophisticated investor with millions in the market to have an investment advisor, but you probably don’t need one if you just want to know how to invest a few thousand dollars or which funds to choose in your retirement accounts.

A robo-advisor is often a cheaper alternative, and some even provide access to human investment advisors or financial planners for an extra fee.

Robo-advisors like Wealthfront, Betterment, and Ellevest set up and automatically rebalance an investment portfolio for you based on your goals and risk tolerance, and the annual management fee is just 0.25% of your account balance. Robo-advisors can be a valuable tool for the average person with a long-term outlook who truly wants to “set and forget” their investments.

SmartAsset’s free tool can help you find a licensed financial advisor near you »

5 ways to avoid regret with Social Security, retirement planning

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Financial reporter Russ Wiles shares five regrets to avoid when planning for or entering retirement.
Brian Snyder, Arizona Republic

Life is filled with choices, and some of them will lead to regrets. That’s certainly true in the financial area, where Americans routinely grapple with difficult decisions.

Most everyone has financial regrets (if they’re being honest), though 15% of respondents in a survey by Bankrate.com said they have no such concerns.

Maybe these people put all their money into the stock market at the start of the bull rally in 2009, bought their dream homes with little cash down and adequately funded their retirement accounts and children’s college education. But chances are, they didn’t.

At any rate, here are five issues related to retirement and Social Security that can cause second-guessing years from now.

1. Don’t tap Social Security early

Yes, there might be good personal reasons to start taking Social Security retirement benefits as soon as you can, at age 62, or soon thereafter. These include a recent job loss, financial stress such as that centered around high medical bills and even an expectation that you might not live that much longer and want to recoup the money you paid into the system.

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Still, this is an area of possible regret because recipients who tap into Social Security early are locking themselves into lower monthly payments than would be the case if they delayed, thus increasing the odds that they eventually could run out of money.

In a study released this month by MassMutual, 38% of respondents now collecting Social Security said they wished they had waited longer. More than half said they decided to claim benefits at an early age owing to a financial need, with one in three citing issues such as health problems or employment changes. But six in 10 respondents admitted that they didn’t receive advice before making this key decision.

The MassMutual survey elicited responses from more than 600 Social Security recipients ages 70 and up.

2. Don’t wait too long to start saving

Not saving early enough for retirement is the recurring top choice when respondents cite their top financial regrets, according to an annual survey by Bankrate.com.

It was cited by 18% of respondents in last year’s poll, eclipsing not saving for emergency expenses (cited by 14%) and carrying too much credit card and other debts (10%). Bankrate will publish this year’s results later this month.

Regrets about not saving early for retirement grow more pronounced with age, according to the study. Unfortunately, the older people get, the more difficult it is do anything about it by boosting incomes.

Meanwhile, younger adults often are more preoccupied with different priorities such as paying down student loans and trying to afford cars, homes and other big-ticket items.

“Retirement seems so far away, and there are more pressing financial needs” such as repaying student loans, said Dagmar Nikles, a retirement-plan specialist for investment giant BlackRock.

But eventually, retirement will come into focus for younger adults, too.

3. Don’t be too conservative

Retirement planning is a long-term pursuit, often spanning three decades or more. This means young investors have the luxury of gravitating toward stocks and other growth assets without worrying about price fluctuations along the way. Unless you will need to cash out within a few years, growth assets are the sensible choice.

Still, it’s not easy to avoid overreacting to those occasional jarring down days or to prolonged swoons that might last a year or two. That’s why most people prefer to anchor a growth portfolio with bonds, cash instruments and other stable investments.

“If you play it too safe, your retirement income won’t be enough to keep pace with inflation,” said Dana Anspach, a certified financial planner with Sensible Money in Scottsdale. But if you’re too aggressive, you’re likely to react to market downturns by selling out when prices are low, she added.

In short, a balanced portfolio usually is the best option, especially one that starts out with riskier assets at earlier ages and grows more conservative over time. But older investors who might not tap their accounts for maybe a decade often can be more aggressive than they think.

4. Be smart about withdrawing retirement funds

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Even if you get a decent start on retirement planning, you still can mess things up later. Aside from depleting your savings with early withdrawals, you can incur taxes and penalties and subject your Social Security benefits to taxes if you’re not careful.

“Two common mistakes are taking Social Security at the wrong time or withdrawing money in a way that costs more in taxes,” Anspach said.

Up to 85% of Social Security benefits potentially are taxable. “When you have other sources of income, such as a withdrawal from your IRA, that can result in more of your benefits subject to taxation,” she said.

By planning ahead, you could time some of those IRA withdrawals to occur in years when you might be able to minimize the tax bite. In particular, retirees in their 60s often can reduce the tax bill by withdrawing and living on funds from IRAs while delaying  Social Security benefits until around age 70, when payments will be larger anyway. 

5. Have a financial cushion

Lacking a rainy-day fund wouldn’t seem to be a retirement problem nor a regret but it can be, as not having emergency funds can trigger a chain reaction of negative consequences. In fact, that was a theme at a mid-May conference in Scottsdale hosted by the Financial Health Network, a group focused on helping lower-income individuals with their finances.

About half of people 50 and up have insufficient short-term savings, said Paolo Narciso, a vice president at the AARP Foundation. About 40% have unmanageable debt.

When people in this age group get hit with an unexpected expense such as big car repairs or medical bills, they might need to pull money from retirement accounts and thereby incur taxes prematurely or otherwise-avoidable penalties. They also might need to start taking early Social Security benefits, at reduced rates.

After not saving enough for retirement, not having an emergency fund was the No. 2 regret cited by respondents in the Bankrate survey.

This dovetails with a finding from another Bankrate study, which found too many older adults are imperiling their retirements by subsidizing adult children. Half of parents with adult kids said supporting them has impeded the growth of their own nest eggs.

More troubling, people 50 and up have amassed a sizable $290 billion of student loans of their own, noted the AARP Public Policy Institute, citing Federal Reserve data. That’s one-fifth of the student-debt total, and it represents a fivefold increase over a decade and a half for people in this age group.

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.

UPDATE: 2 Lewisbug financial planners to offer free advice to Wood-Mode employees

SUNBURY — City attorney Joel Wiest will meet with former Wood-Mode employees and their families at 7 p.m. Thursday at the Shikellamy High School gymnasium, but they’ll have some company.

Two Lewisburg area financial planners are donating their services to the nearly 1,000 people who lost their jobs Monday.

John M. Machak, an investment advisor from The Wealth Factory in Lewisburg, said he wants to help employees work through the difficult time.

“I was moved by Attorney Wiest offering free legal advice to the employees of Wood-mode and I would also like to help out during this difficult time and offer financial planning services to those employees free of charge,” Machak said. “I can provide financial counseling, help plan a strategy, map out priorities, analyze cash flow and perhaps most importantly prepare a survival budget. Facing a sudden job loss with a plan can lower stress and make coping with it much easier.”

Joshua Knauss, founder and CEO of Omniwealth Group, said was surprised by the decision, particularly “the abruptness of the announcement and the lack of notice for their employees.” 

“These individuals are dealing with a tough blow and I feel obligated to help in any way I can,” Knauss said. “I am offering financial counsel, pro bono, to any affected employees to help them navigate this sudden transition and avoid any rash and harmful financial decisions in the process. Clearly many of these individuals are coping with shock, both emotional and financial, which can be disorienting. The loss of a job is disruptive, but it doesn’t have to derail financial plans or severely alter your goals. Sound advice can be invaluable during times like these. We want to use our expertise and experience to help people navigate this transition well.”

Furloughed employees will be invited to discuss any potential legal matters concerning the sudden closure of the Snyder County custom cabinetry manufacturer tonight in Sunbury.

“I want to thank everyone who offered venues for this,” Wiest said. “This shows our community can and does come together in times of stress and need and I want to thank the Shikellamy Area School District for the use of the building.”

Wiest’s offer to answer any legal questions from the affected employees and their families first came Tuesday night. At the time, he explained he’s not certain about what legal options are open to the employees but said he could help them properly file any legal paperwork or offer guidance on related issues.

“I have been flooded with calls and emails since Tuesday and I just want to make sure everyone knows there are people that care,” Wiest said. “We will do the best we can to get everyone heard and see what we can offer to them.”

Wiest said he is also creating a social media page for employees to speak with him.

Vanguard to offer robo technology to advisors

Following the initial success of Vanguard’s direct-to-consumer robo advisor, financial planners can expect access to the technology in the future, according to Tom Rampulla, head of Vanguard’s Financial Advisor Services division.

“We’re getting a lot of requests from [advisors] to perhaps use that technology with them, so we’re in the process of working on that,” Rampulla tells Financial Planning. “We’ll be rolling that out at some point to give [advisors] the ability to use technology that has been proven to help with their business — different types of software to do their business and make them scalable.”

A Vanguard spokesman confirmed the company is “in the beginning stages of building out those capabilities.” He said it was too early to provide further details on the offering or a timeframe of availability.

Vanguard plans to expand its application of blockchain in early 2018.

The firm’s four-year old robo offering, dubbed Personal Advisor Services, has $130 billion in AUM and over 20 million clients, according to Vanguard. It is one of several hybrid robo advisor offerings for retail clients. Personal Advisor Services charges 30 basis points, compared to Betterment’s 40 basis points for its hybrid offering and Schwab’s $30 a month with a $300 initial fee. Betterment and Schwab also offer the technology behind their robo to advisors.

Vanguard’s move would expand its existing business with financial advisors. While Vanguard may be better known for its retail offerings, advisors manage about 35% of the $5.6 trillion in AUM at Vanguard, according to Rampulla. Launched in 2002, the firm’s financial advisor services unit caters to 60,000 advisors from firms such as Merrill Lynch and Creative Financial Planning.

“It’s grown like crazy,” Rampulla says.

The firm offers advisors education and consulting, such as coaching on portfolio gaps or on articulating their business model. The company also gives advisors tools, including one that runs an advisor’s portfolio and provides risk metrics and analysis as well as a web portal with access to marketing materials.

“Different advisors are offered different things depending on how large they are and how deep the relationship is,” Rampulla says.

Rampulla’s team has had conversations with advisors who were initially skeptical with Vanguard’s hybrid robo.

“We have no intentions of going out in the marketplace and having Vanguard advisors all over the country face-to-face. We’re built for scale, not that customization,” Rampulla says. “Over 90% of our clients are existing Vanguard clients, and have been asking us for something like this for quite some time,” he says.


Jessica Mathews


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Carson Wealth, Atria Wealth launch client portals

The face of wealth management is changing, as a number of new firms look to keep up with consumer demand for convenient and functional client portals. In fact, eight in 10 advisors use the technology for communication and three in 10 believe it has the ability to disrupt the industry, according to the 2019 Financial Planning tech survey.

For many in the industry, disruption can’t come soon enough.

“It is a bit of a do-or-die imperative right now,” says Eugene Elias, COO of Atria Wealth Solutions, speaking about the adoption of the tech for online and mobile apps. “If firms are not investing significant capital into infrastructure, software, data, visual design, automation, they will not be able to succeed in the near term.”

Wealth management ranks lowest in overall mobile app satisfaction by consumers, according to a J.D. Power report. What’s more, 44% of millennials say they are likely to switch investments firms when advisor communication fails to meet their expectations on mobile applications.

Atria Wealth is the latest wealth manager to upgrade its client portal, called Clear 1, which sends automated infographics to clients that answer anticipated questions both online and on mobile apps. The private-equity backed wealth management holding company owns three broker-dealers with a combined $50 billion in client assets.

Image: Bloomberg

Image: Bloomberg

“[Clients] expect to have the same on-demand experience with their financial provider as they do with Amazon, Google or any other online experience,” Elias says in an email.

Other wealth management firms have taken notice. Carson Wealth upgraded its client portal, Carson CX, short for customer experience, to expand the range of functions available to clients and advisors online. The new portal lets advisors video conference with clients, schedule meetings and generate client reports, according to the firm.

“Clients interact with money every day in so many ways, and to be a client’s trusted advisor and financial quarterback, we need to expand our services and provide a more holistic offering to clients,” says Ron Carson, CEO of Carson Wealth, in an email.

Carson CX can also determine a client’s risk tolerance and adjust how the portal presents financial information to the end user, according to a statement. “It’s going to change the game and give our advisors an unparalleled advantage most firms don’t currently have in creating a memorable experience, online and off,” says Aaron Schaben, vice president of Carson Group, in a statement.

The new portals demonstrate just how important communication has become in a digitized world. The Atria platform provides a number of avenues to get in touch with clients, through any device with internet access, says Elias. “Clients want to communicate with their advisors immediately and across multiple devices,” he says. “Clients want choice and they want their choices to align with their communication preferences without limitation.”

According to Deloitte’s Global Mobile Consumer survey, 94% of all U.S. consumers aged 18 to 75 used smartphones and 74% used laptops in 2018. Of the 2,000 respondents, almost six in 10 consumers say they used their personal smartphone during normal working hours.

Atria is integrating its current secure advisor and client texting capabilities into Clear 1, which allows clients to text to their advisor directly from portal as well as from their cell phones.

“The experience has to be fast, seamless, transparent, but, at the same time, clients want to be able to connect with their financial advisor when and how they want,” says Elias.

The experience also has to be personalized. The most up-to-date technology welcomes users by name when signing on and displays photos of the advisor and client on the homescreen. These developments aren’t purely cosmetic, Elias says. Personalization can substantially affect client-advisor relationships and the way services are provided.

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Indeed, clients are more satisfied with their investment firm if their advisors effectively use digital channels to communicate , according to the report by J.D. Power. For example, when advisors deliver communication that shows progress toward financial goals, the likelihood of millennials switching to another firm drops to just 17%.

While the wealth management industry has some catching up to do when it comes to client satisfaction with mobile apps, client expectations are always on the rise. “It is an extension of their advisor and another means to deliver the value of advice in a way that clients have come to expect,” says Elias.


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