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Like many professions, financial advisors develop their planning and communication techniques in education and practice. This article seeks to provide insight about the development of financial advisors early in their career. Four beginning financial advisors were interviewed and factors that they consider as being influential to their ability to develop and communicate client recommendations were identified. Triangulation was achieved through interviews with supervisors of the financial advisors and through a focus group of the financial advisors. Participants identified the influential role of mentorship and reflective practice, especially through instructional modeling and collaborative practices. These factors that impact the development of new financial advisors can be replicated in financial planning educational programs and in orientation programs within financial planning firms. [ABSTRACT FROM AUTHOR]

The article offers information on British artist Grayson Perry's 2016 etching titled "Animal Spirit," which commemorates the 2008 financial crisis. Topics include the symbolism of Perry's creature, representing the irrationality of the market, and its juxtaposition with an abandoned infant, squawking crows, and other signs of human frailty.

In 2021, the Certified Financial Planner (CFP) Board expanded its Principal Knowledge Topics to include the domain Psychology of Financial Planning. This inclusion serves as an impetus for CFP Board Registered Programs to provide opportunities for students to explore their own attitudes and biases about money. However, little is written on how programs can aid students in this process of self-exploration. This paper introduces an experiential exercise to aid financial planning students in self-exploration. Using a thematic analysis, several themes emerged: (1) diversity in parental financial socialization, (2) anxiety about personal finances, and (3) use of technical knowledge to help loved ones. Additionally, women reported more traumatic money experiences, and men reported higher levels of career confidence. Implications can provide insights on how educational programs can aid financial planning students' understanding of their own money beliefs to better serve future clients in the client psychology competency areas. [ABSTRACT FROM AUTHOR]

Using data from the Stockholm Stock Exchange (SSE), we study the value added by (as distinct from the abnormal returns to) analysts' recommendations. Recommending brokers' clients trade profitably around positive recommendations at the expense of other brokers' clients. Significant profits come from transactions before recommendation dates. Value added is greatest for upgrades to large caps, and largely insignificant for downgrades and recommendations of small caps, despite high abnormal returns. Brokers making profitable recommendations generate abnormally high commission income, recouping much of their clients' abnormal profits, and their abnormal commission income varies in line with the abnormal profits for their clients. [ABSTRACT FROM AUTHOR]

Using a global dataset of over 840,000 equity, bond and syndicated loan investment banking deals, we build the fossil fuel investment brokerage profile of financial centres worldwide between 2000 and 2018. We also study whether city-level fossil fuel divestment commitments and country-level green banking policies impact the profile of fossil fuel financial centres over our study timeframe. We find that several financial centres shift their fossil fuel investment brokerage profiles substantially, including the asset classes in which they are active. However, we do not find any evidence that this is driven by city-level divestment commitments. In contrast, we find that fossil fuel investment banking brokers situated in financial centres exposed to voluntary green banking policies reduce their fossil fuel financing. This is driven by foreign brokers whose behaviour appears to signal an anticipation of forthcoming mandatory green finance policies. [ABSTRACT FROM AUTHOR]

There are two major trends occurring with life insurance and risk management. First, many traditional life insurance agents are becoming financial planners. Second, financial planning is rapidly transitioning from a sales model to an advisory model. If these trends continue, life insurance and risk management will increasingly become a subset of financial planning. For many consumers, that's good news. [ABSTRACT FROM AUTHOR]

Sound financial planning encompasses more than chasing investment returns. The financial advisor has both an opportunity and a duty to ensure that clients have estate plans that protect them, their loved ones, and their assets. The advisor is best positioned to work with clients and their other advisors to ensure coordination of beneficiary designations with the estate plan. [ABSTRACT FROM AUTHOR]

Using an integrative approach combining economic theory with psychological constructs, this study examines the impact of trust on the perceived value of a consumer-financial service provider relationship. This study is one of the first to explicitly investigate the value of financial advice by testing the moderating effect of trust on the conditional effect of agency cost, more specifically monitoring cost, on the overall value of the relationship. Findings suggest that trust, as well as risk-sharing and increased consumer satisfaction, reduces agency cost and subsequently increases the value of a consumer-financial service professional relationship. [ABSTRACT FROM AUTHOR]

This study examines the financial literacy level of Indian professional women and its relation to their retirement planning behavior. We use factor analysis and the Rasch model to evaluate the validity and reliability of a financial literacy scale. Additionally, we use multiple regression to examine the association between demographic characteristics and financial literacy with retirement planning. Our results reveal that the respondents display low levels of financial literacy as reflected by a lack of awareness about both basic and advanced financial concepts. Further, a woman's age, income, profession (financial), and understanding of advanced financial concepts are key factors associated with retirement planning behavior. The findings have implications for financial planning professionals, advisors, regulators, and policymakers in guiding women to make better retirement decisions. [ABSTRACT FROM AUTHOR]

This study examines potential effects of overconfidence on financial advice usage. Financial literacy overconfidence is defined as the gap between consumers' subjective and objective financial knowledge. Using a representative national survey, the result shows that over 11 percent of respondents display financial literacy overconfidence: They score higher than the average on perceived financial knowledge but are unable to answer three or more financial literacy questions correctly. These overconfident consumers are less likely to seek professional financial advice in saving/investment and mortgage but more likely to exhibit demand for advice related to debt counseling and tax planning. [ABSTRACT FROM AUTHOR]

Advisors are always seeking to gain the trust of brand new clients or the clients that are already with their firms. While establishing trust with new clients and prospects can take time, a favorable introduction from another advisor can often help in developing trust more quickly. Working in a team, whether within a firm or with outside professionals, benefits all members of that team as they grow trust with each other's clients and develop relationships that benefit everyone. This is true whatever the reason the client sought advice, and is particularly true when the client's goal is legacy planning. [ABSTRACT FROM AUTHOR]

The recent period of uncertainty and volatility has rattled clients and advisors along with the financial markets. But, if used as an opportunity it can have a silver lining for both advisors and clients, acting as a "trigger event" opening up new pathways for discussion, redirection, and a keener focus on financial needs and goals for retirement. Even more importantly, it allows for a deeper consideration of nonfinancial goals, and a more productive client relationship and referral opportunities through the development of a holistic approach to retirement planning involving eight interconnected life areas that benefits all participants in the process. This approach also opens up productive networks and a wider range of partnership opportunities with other nonfinancial professionals to address emerging client needs. This team can work collectively to identify the goals desired by and resolve challenges faced by clients as they prepare for and experience retirement. [ABSTRACT FROM AUTHOR]

In this article, findings from a study designed to evaluate the perceptions of widows in relation to financial advice are reported. Based on a sample of 1,100 widowed respondents, results suggest that working with a financial advisor significantly improved widows' financial confidence in their current and future financial situations. Practical implications for advisors are presented with additional suggestions for further work in this important area. [ABSTRACT FROM AUTHOR]

What would be some of the ethical concerns that arise when considering the nonfinancial side of retirement? Since wealth-seeking must be modified by other needs the planner's role is not as simple as just advising on financial matters. In one sense, the advice to give to the clients who are considering retirement is that they are entering some of the best years of their lives. Find a purpose, friends, and live. Planners who are aware of the changes that retirement brings are in a better position to understand their clients and to deliver better advice to them. [ABSTRACT FROM AUTHOR]

Financial advisors are well aware that starting retirement during a bear market can significantly increase the likelihood of a retiree outliving his or her assets. At the outset of a bear market a retiree must withdraw more principal, compared to capital. While the notion of sequence of returns risk is generally well known among retirement advisors, it is important to recognize this risk also exists for those accumulating assets. The problem is clearly apparent in the context of a typical retirement financial planning case scenario. [ABSTRACT FROM AUTHOR]

Needs analysis models typically estimate the amount of life insurance a client needs if he or she dies today. However, there are some needs (e.g., final expenses) that call for more life insurance as the insured ages while other needs (e.g., mortgage payoff) call for less life insurance over time. As a result, it is easy for an insured to become underinsured or overinsured during his or her lifetime. A needs analysis example, which estimates the life insurance need year-to-year, is presented. Its use would enable financial advisors to ensure their clients are adequately protected throughout their entire lives. [ABSTRACT FROM AUTHOR]

Nearly three decades ago, in 1985, the predecessor of America Online was created. While this founding did not mark the invention of the Internet, it did usher in the mass awareness of it. This was also around the time the individuals we term "young advisors" were born. Thus young advisors and the Internet grew up together. Today, those young advisors and the Internet can either work together or against each other as they face a changing landscape in 2015. [ABSTRACT FROM AUTHOR]

Knowledge of planning strategies for the affluent is a necessity for financial professionals seeking to keep pace with clients and their other advisors. The current income tax environment and clients' continuing wealth transfer ambitions have now coupled with a rebounding economy. This creates an atmosphere poised for renewed interest in sophisticated charitable planning techniques. [ABSTRACT FROM AUTHOR]

There is a significant challenge in recruiting those from underrepresented racial and ethnic groups as well as women into financial services careers. Undergraduate financial planning programs serve as an entry point for many financial planning professionals. This qualitative study explored the recruitment efforts and strategies of 37 financial planning undergraduate programs in the United States as well as the current gender and racial representation of students in those programs. Results reveal the challenges of filling the financial advisor pipeline. They also offer insights that can be applied to increase the number of financial planning students and ultimately the number of prospective future financial advisors. [ABSTRACT FROM AUTHOR]

Over 50 percent of the U.S. workforce is female. More and more women are making financial decisions for themselves and their families. Studies have shown that women prefer to work with women advisors. This is a great opportunity for women to enter into the role of financial producers. [ABSTRACT FROM AUTHOR]

Entering a new market takes work but can bring big rewards. Selling with qualified plans can shift a financial advisor's business to a new level of consultative sales with successful and profitable business owners. The last quarter of the year is when most qualified plans are sold. If an advisor steps up now, it is possible to close one qualified plan this year. Including life insurance in that plan could lead an advisor to make $30,000 or more on that first sale. [ABSTRACT FROM AUTHOR]

When college graduates begin their careers, they face a number of financial choices and obligations. Their choices typically include one or more retirement account options. The options generally include individual retirement accounts (IRAs) (Roth and/or traditional), 401(k) plans (Roth and/or traditional), and, possibly, 401(k) contributions matched by the employers. In this article, a decision-making hierarchy is provided. The hierarchy ranks all of the retirement account alternatives in order to facilitate choices that are tax efficient and maximize wealth. A simplified version of the ranking is as follows: (1) Roth 401(k) with matching employer contributions; (2) traditional 401(k) with matching employer contributions; (3) Roth IRA; (4) Roth 401(k); and (5) traditional 401(k). [ABSTRACT FROM AUTHOR]

Financial professionals must assume many roles, each with vastly different skill sets. They are responsible for marketing themselves, setting appointments, preparing and delivering presentations, processing paperwork, understanding products and strategies, making recommendations, handling objections, making sales, understanding compliance and operations, providing customer service, and maintaining client relations. This can be overwhelming for anyone, but especially for new advisors, who are pulled in so many different directions with little time to concentrate on what is most critical to their business: finding people to speak with and learning what to say and how to say it. This article discusses five areas which are essential for a new agent to master if he or she is to be successful. [ABSTRACT FROM AUTHOR]

Divorced or widowed clients have Social Security options that are not available to other clients. Ideally, planning for when these clients should begin claiming Social Security benefits and whether they should claim their own benefits, or benefits as a divorced spouse, or as a widow/widower, or switch, will begin several years before they are eligible to begin benefits. [ABSTRACT FROM AUTHOR]

It's helpful for new planners to understand the basics of the mature market. They can best understand how to approach these clients by establishing a framework for segmenting the different groups within the 50+ population. In the end it is all about holistic planning and ageless marketing. [ABSTRACT FROM AUTHOR]

Financial advisory means providing advice concerning various financial products such as loans, insurance and investments. The commercial investment advisor and the financial advisor develop individual analyses and concepts for their clients, in the sense of a comprehensive financial planning, about the type, construction, protection, maintenance, retention and possible uses of assets and financing. They respond to the special needs of their customers. Despite these common elements, there exist important distinctions in the regulation of the commercial investment advisor in Austria and of the financial advisor in Slovakia. [ABSTRACT FROM AUTHOR]

As a professional, you have faced your clients with competency so far, helping them with your education, experience, and expertise. Now, it seems this foundation on which our profession is based is itself crumbling, and to continue as professionals implies that we seek more insights in this very difficult business of ours. Now, more than ever, is the time to begin a whole new journey, a way of moving forward with only the lessons from the past and without any of its shortcomings or regrets. [ABSTRACT FROM AUTHOR]

Academic and practitioner research evaluates portfolio performance using size and value/growth attributes or factors. We assess the merits of popular evaluation procedures based on matched-characteristic benchmark portfolios or time-series return regressions by applying them to a sample of active money managers and passive indexes. Estimated abnormal returns display large variation across approaches. The benchmarks typically used in academic research—attribute-matched portfolios from independent sorts, the three-factor time-series model, and cross-sectional regressions of returns on stock characteristics—track returns poorly. Some simple alterations improve the performance of these methods. [ABSTRACT FROM PUBLISHER]

Many investors purchase mutual funds through intermediated channels, paying brokers or financial advisors for fund selection and advice. This article attempts to quantify the benefits that investors enjoy in exchange for the costs of these services. We study broker-sold and direct-sold funds from 1996 to 2004, and fail to find that brokers deliver substantial tangible benefits. Relative to direct-sold funds, broker-sold funds deliver lower risk-adjusted returns, even before subtracting distribution costs. These results hold across fund objectives, with the exception of foreign equity funds. Further, broker-sold funds exhibit no more skill at aggregate-level asset allocation than do funds sold through the direct channel. Our results are consistent with two hypotheses: that brokers deliver substantial intangible benefits that we do not observe and that there are material conflicts of interest between brokers and their clients. [ABSTRACT FROM PUBLISHER]

The authors of this article contend that financial service practitioners should invest time to read articles on the cutting edge of their chosen field. They note that many articles that appear in academic journals have significant relevance to financial service practitioners, but the articles sometimes seem too theoretical or are written in legalese. This paper identifies 14 recent academic articles and summarizes them in a way that makes them more accessible to practitioners. Each article is related to one of three areas within the Certified Financial Planner® topic list (investment planning, retirement planning, and estate planning). [ABSTRACT FROM AUTHOR]

The article examines how financial planners are facing new demands when dealing with the baby boomer generation entering retirement. The article points out that baby boomers moving from an accumulation stage to an expenditure stage face a widely different society and economy than any other generation before them. Baby boomers themselves are also vastly different than previous generations, with such factors as longer life expectancy, greater health care, more formal education, and larger accumulations of wealth.

Abstract: The new rules of Circular 230 require changes in the way practitioners document recommendations and communicate with clients in many general tax-planning situations. This article provides an overview of the applicability of Circular 230 including a description of covered opinions and additional detail related to the two types of covered opinions most likely to be encountered by financial professionals - the tax-avoidance strategy and the reliance opinion. A discussion of best practices for tax professionals to comply with these rules is also presented. [ABSTRACT FROM PUBLISHER]

This article reports on the changes occurring in financial planning as many adults have parents still alive later in life. The author notes that the term "sandwich generation" refers normally to people in their mid-40s care for their children and their older parents. The concept has been altered to "senior sandwich generation" to include baby boomers who have started turning 60 in 2006 and still have parents who are living. The boomers also are likely to have children that are college age, which presents more financial quandaries. The author offers computations that could help people with their investing.

The article presents information on retirement planning. Financial planners who have studied financial gerontology know that a person's age measures two different aspects of his or her attitudes and behavior: maturation, typically referred to as aging, and generation, which demographers and gerontologists often refer to as birth cohort. Financial planning is full of ambiguities--personal, family, community, the national economy--and all of these begin in childhood or young adulthood and evolve over the course of a life span. Financial planners know this and individual differences are always taken into consideration when planning for the near and for the distant future. To the degree that one think of decisions as reflecting either tipping points or blinks inconclusive research in such areas as finance and health can become quoted and repeated enough to take on the mantle of truth. This an especially critical concern, some might say dangerous, as increasingly one gravitate toward evidence-based practice where data and numbers can take on too much credibility when offered with too little context.

Financial planners don't talk much to their clients about planned giving. Yet, colleges, universities, medical facilities, libraries, museums, religious organizations, and the thousands of foundations and other charitable institutions in the United States rely on the charitable nature of their alumni and millions of other supporters for their very existence. This article will present many of the various charitable gift techniques and the tax ramifications that can be presented by financial planners to help their clients in this important effort. [ABSTRACT FROM AUTHOR]

This issue is no exception and delivers on that promise by examining how psychological profiles and behavioral prompts affect financial decision-making as well as how racial characteristics influence the financial planning profession. The I Financial Planning Review i uniquely focuses on the intersection of traditional technical tools and holistically human heuristics of financial planning. The next paper addresses the under-representation of Black financial planners, which is related to the mission of the Center for Financial Planning to create a more diverse and sustainable financial planning profession. [Extracted from the article]

Aligning the division of assets of a family business owner for estate planning purposes can often be a challenging proposition for both clients and advisors. However, everyone involved may have to recognize that reaching a solution may require both patience and a practical sense that the "perfect is the enemy of the good." The choice of solutions possible offers a great opportunity for the imaginative estate planner to offer lasting value to the family business owner. [ABSTRACT FROM AUTHOR]

A rational analysis of analyst behavior predicts that analysts immediately and without bias incorporate information into their forecasts. Several studies document analysts' tendency to systematically underreact to information. Underreaction is inconsistent with rationality. Other studies indicate that analysts systematically overreact to new information or that they are systematically optimistic. This study discriminates between these three hypotheses by examining the interaction between the nature of information and the type of reaction by analysts. The evidence indicates that analysts underreact to negative information, but overreact to positive information. These results are consistent with systematic optimism in response to information. [ABSTRACT FROM AUTHOR]

A weekly database of retail money fund portfolio statistics is uneconomical for retail investors to observe, so it allows direct comparison of disclosed and undisclosed portfolios. This makes possible a more direct and unambiguous test for "window dressing" than elsewhere in the literature. The analysis shows that funds allocating between government and private issues hold more in government issues around disclosures than at other times, consistent with the theory that intermediaries prefer to disclose safer portfolios. Cross-sectional comparisons locate the most intense rebalancing in the worst recent performers. [ABSTRACT FROM AUTHOR]

Findings from previous studies generally indicate that relying on advice from financial advisors is associated with investment decisions. This study uses data from the 2013 Survey of Consumer Finances (SCF) to mainly investigate three types of advisors: (a) financial planners, (b) accountants, and (c) lawyers. Getting investment advice from financial planners is found to be positively associated with stock ownership, while this relationship is negative for individual investors relying on advice from lawyers. Evidence from this study also suggests that some personal characteristics, such as age, education, risk tolerance may play a key role in shaping individual investors' investment decisions. [ABSTRACT FROM AUTHOR]

With a growing awareness of the potential of innovation provided by digital technology, insurance companies have increasingly adopted digital agendas in their business activities. Our paper studies the relationship between the expression of a digital agenda in annual reports and the business performance of 41 publicly-traded European insurance companies for the time period from 2007 to 2017. Our findings show a positive relationship, which is particularly strong in cases where companies take a comprehensive approach by addressing digital technology both in the context of internal activities within their own organisation and external activities in connection with customers and business partners. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine the potential effects of consumer financial education on insurance advice seeking with a large and representative national data set in the U.S. Previous research has examined factors associated with insurance advice seeking. After controlling for these factors, financial education, which has not been examined in previous research, is positively associated with this behaviour. Specifically, high school and workplace financial education show positive associations with insurance advice seeking. Further analyses show that there are differences in insurance advice seeking between consumers with and without life insurance. [ABSTRACT FROM AUTHOR]

This article presents the authors' reply to an article that commented on a research paper they published on direct equity financing. They present an improved specification of their flotation cost function in replacement of the central control proxy variable with a direct measure of the blockholder guarantee effect. They note that their findings indicate that firms choosing to adopt a direct offering method are able to replace expensive underwriting and distributive services with a relatively costless promised receipt of desired proceeds. They note that these finding reinforce their original work.

A professional organization or company that portrays itself as setting a higher standard than it lives up to in order to solicit more business is contradicting the very purpose for which it was established. Companies and organizations should not be external factors that make the ethical life of the advisor more difficult. [ABSTRACT FROM AUTHOR]

One of the most common pitfalls that financial planners encounter is the very low percentage of clients who have completed a formalized plan. Along with strengthening the relationship with our clients, there are many other tangible benefits to designing a retirement planning path. Retirement plans should be monitored periodically to increase the probability of successful goal achievement. [ABSTRACT FROM AUTHOR]

The article discusses financial abuse that can be experienced by elderly people and steps that financial advisors can take to protect their elderly clients from financial abuse. Various ways in which care givers and family members can steal money from elderly people are discussed. Several signs that the author feels that financial advisors and family members should look out for in order to determine if an elderly person is a victim of financial abuse are discussed, including that they have become isolated from their family and friends and that they are anxious about their personal finances.

The article discusses grantor trusts, also known as "defective trusts," which are trusts that are disregarded as a tax paying entity and the tax consequences are shifted back to the creator of the trust. The article examines how grantor trusts are used by financial planners, and the three main planning advantages associated with them. The article also looks at two tax rulings, Letter Ruling 20063040 and Letter Ruling 200637025, which appear to support planning techniques that avoid potential problems with grantor trusts.

Prior analyst literature focuses on the impact of financial analysts on the firms they cover, and prior information-transfer literature concentrates on the externalities of information provided by management. This paper fills gaps in both streams of literature by examining the focal firm's market reactions to the closest peer firm's (identified by product similarity) analyst revisions. We find that the focal firm's stock price reacts to the closest peer's analyst revisions made by analysts who are not covering the focal firm. The focal firm's cumulative abnormal return for a five-day window centered on the revision date is 0.54% higher if the peer firm's analyst revision magnitude is in the top decile than if it is in the bottom decile. Cross-sectional tests show that the sensitivity of the focalfirm's market reactions to the peer firm's revisions increases with the revision informativeness and the similarity between the focal firm and the peer firm. In addition, we find that focal firms do not react to peer firms' revisions in industries with strong competition where the competitive effects cancel out the spillover effects. Finally, we find that the focal firm's market reactions can predict its own future analyst revisions, suggesting that the reactions are at least partially rational. [ABSTRACT FROM AUTHOR]