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September 18, 2012

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A weekly digest of news and industry updates for the financial planning community

Top Story

U.S. corporate profit is set for first drop since 2009
Quarterly profit of major U.S. companies likely will decline this quarter for the first time since 2009, Wall Street analysts say. This anticipated decline is a significant factor preventing unemployment from falling below 8%, economists and executives said. The New York Times (tiered subscription model) (9/16)

Policy Watch

NYSE to pay $5M penalty for giving some clients early data access
NYSE Euronext agreed to pay $5 million to settle an allegation by the Securities and Exchange Commission that the New York Stock Exchange gave select clients market data before they were available to retail investors. The regulator said such improper action began in 2008. The New York Times (tiered subscription model)/DealBook blog (9/14), The Wall Street Journal (9/16)

IOSCO launches task force to examine Libor
Martin Wheatley, managing director of the U.K. Financial Services Authority, and Gary Gensler, chairman of the Commodity Futures Trading Commission, have been chosen to oversee a task force set up by the International Organization of Securities Commissions to investigate the London Interbank Offered Rate and other rate benchmarks. "IOSCO is committed to taking necessary steps to prevent the manipulation of benchmarks and restore confidence in the use of those benchmarks in global financial markets," the group said. Bloomberg (9/14), Reuters (9/14)

Sen. Corker calls on SEC to continue reform of money market funds
The Securities and Exchange Commission needs to continue working on an overhaul of rules governing money market funds, says Sen. Bob Corker, R-Tenn. "An optimal solution will be found if the SEC Commissioners and industry work together to find an appropriate structure that minimizes the risk of a wholesale run," Corker wrote to Mary Schapiro, chairman of the SEC. "Whatever the solution, reforms ... now are better than a taxpayer bailout down the road. Inaction is not an option." The Hill/On the Money blog (9/14)

Federal Reserve's QE3 will hurt life insurance industry
The Federal Reserve Bank's plan to initiate QE3 -- that is, to buy $40 billion of agency mortgage-backed securities each month in another round of monetary stimulus -- will hurt the life insurance industry. Moody's Investors Service has cut its outlook for the industry to negative from stable. Life insurance companies will have to grapple with lower interest rates for the next few years and recalibrate reserves because of their lower returns. InvestmentNews (free registration) (9/14)

Bogle: SEC's fiduciary definition should include institutional advisers
The Dodd-Frank reforms left "a pretty wide open space" within which regulators could define fiduciary rules, says Vanguard founder John Bogle. The Securities and Exchange Commission should take advantage of that fact to extend fiduciary coverage to registered investment companies, Bogle argues. "I emphasized to [Schapiro] the fact that a fiduciary standard must, should and does include advisors to registered investment companies," Bogle adds. AdvisorOne (9/11)

Practice Management

Client satisfaction is a matter of process and discipline
Keeping clients satisfied requires a process and the discipline to follow that process, according to George Tamer of TD Ameritrade Institutional. It is also essential to hire and retain the right staff to ensure the process is followed, he says. FPAnet.org/Practice Management Center blog (9/15)

4 personality traits that top advisers share
Elite advisers share certain traits, according to Matt Oechsli, who gave the keynote session at FPA of Colorado's financial planning symposium. They are ambition, discipline, self-awareness and deliberate practice. FPAnet.org/Practice Management Center blog (9/11)

Helping with an ESOP can build a stronger client relationship
Setting up an employee stock ownership plan can help build a relationship with a small-business owner, even if the planner doesn't directly profit from the plan, writes Christina Nelson. Small-business owners benefit in a number of ways from having ESOPs, including using them as a way to help sell their businesses. FPAnet.org/Practice Management Center blog (9/14)

Industry Report

Study: Advisers shouldn't neglect savings rates
Financial advisers who give undivided attention to investment strategies and fund performance keep clients from the true source of wealth, according a study by the Putnam Institute. Increasing clients' savings rate, rather than fund performance, has a much bigger impact on wealth accumulation, the study found. Reuters (9/13)

RIAs must learn to navigate the complex options space
Registered investment advisers are beginning to enter the options market as retail investors become more sophisticated and demand such services. Advisers new to the space, however, face a steep learning curve. AdvisorOne (9/14)

Estate-planning checkups for baby boomers
Baby boomers' estate planning should undergo regular checkups from financial planners, Casey Dowd writes. Mike Piershale, president of Piershale Financial Group, cites the importance of ensuring that the right professionals are involved in the process, common mistakes many people make in estate planning and which parts of a plan need to be reviewed and when. Fox Business (9/13)

Indexed, income annuity sales see significant Q2 growth
Beacon Research reported that indexed annuity sales rose 8.3% in the second quarter compared with Q1. Income annuities rose 6.1% for the same time period. Both products experienced their second-best ever quarter. AdvisorOne (9/13)

FPA News

Let the Practice Management Conversation Roll
Angie Herbers continues her conversation from the September Journal's "10 Questions" interview with a podcast delving further into what makes a successful financial advisory firm -- including the unique aspects of planner small businesses (namely, grappling with fee structures) as well as the role technology plays in employee morale. Listen in at FPAnet.org/Journal/Home/PodcastPage.

3 Days Left! Last Chance for Discounted Registration Pricing!
Register for FPA Experience 2012 by Friday and save $200. This is our FINAL offer, and you have only three days left. Go to FPAAnnualConference.org and register before the full registration price takes effect. Want more information on the educational sessions? Check out the full conference schedule.

Editor's Note

Updated SmartBrief privacy policy
SmartBrief has updated its privacy policy to better reflect the state of the digital world. View the updated policy.

SmartQuote

Much may be done in those little shreds and patches of time which every day produces, and which many men throw away."

--Charles Caleb Colton,
British cleric and writer

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