Financial Planning Articles

Financial Planning Articles (August 26, 2018)

“Financial Planning Articles” is a collection of articles and research that I’ve been reading regarding financial planning.

What I’m Reading:

When A Good Offer For A First Financial Advisor Job Really Isn’t (Michael Kitces,

“The key point here is to understand that unfortunately, the financial advisor job offer from a lot of big firms is usually not a good way to start your career as a financial advisor because it’s not a financial advisor job, it’s a financial salesperson job, regardless of what it says on your business card.”

‘Super Robos’ to emerge as digital financial advice evolves (Sean Allocca,

“A super robo would expand far beyond investments to include cash flow forecasts, loan and debt management, insurance coverage, investment allocation, college planning, estate planning, etc., largely replicating the services of a comprehensive financial planner,” Winterberg says.

40% of Americans are comfortable seeking financial advice from AI (Ravie Lakshmanan,

“As technology continues to change the investment landscape, a new Merrill Edge report has found that nearly 40% of mass affluent Americans are comfortable consulting artificial intelligence for financial advice…Americans are more likely to trust AI with their finances than trust it to drive a car (28%), post to social media (28%) or select a wardrobe (26%),’ the report, which was released last week, says.”

The Client Service Premium (Allison Carey,

“82% of US respondents said they want to interact with a real person the more technology improves…Only 3% of people want complete technology automation.”

Smart Beta Performance Isn’t Worth the Cost (Barry Ritholtz,

“Outliers aside, fundamental indexing is still more expensive than old fashioned capitalization-weighted indexing. Costs may be trending in the investors’ favor, but these are still more expensive strategies to manage. The reasons for this are simple: fundamental indexing has more asset turnover and will thus have higher trading costs. One recent AAII study showed a range of turnover from 14 percent to almost 50 percent.”

The Rich Are Betting on Living to 100 (Ben Steverman,

“The rich are more than willing to sacrifice money for extra longevity. Nine of 10 wealthy people agreed that “health is more important than wealth.” Asked by UBS how much of their fortune they’d be willing to give up “to guarantee an extra 10 years of healthy life,” the average responses varied by wealth level. Investors who are barely millionaires, with $1 million to $2 million in net worth, were willing to give up a third of their nest egg for an additional decade of life. Investors with more than $50 million were willing to part with almost half of their fortune.”

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