Financial Advisor Reading List: August 2023

Aug 14, 2023 | Blog Posts

Back to school season is around the corner.

That means a lot of financial advisors are wrapping up summer vacations, prioritizing time with family, and getting ready for the fall. Meanwhile, life at work may be feeling busier than ever due to economic uncertainty.

Still, it’s important to prioritize time for reading. Here are a few valuable resources that our team at CircleBlack suggests you check out.

1. The Best Personal Finance Books Written by Women

Source: Business Insider

Over the last several decades, women’s investing power has been increasing, among younger generations. The gender gap is closing. As of 10 years ago, the gender pay gap between millennial women and men was near parity. At CircleBlack, we’ve written before how diversity and inclusion was one of the driving factors of growth in wealth management.

As a financial advisor, where the average age of the profession is  56 years old, one of the most important strategic decisions that an RIA team can make is to listen to and value the perspectives of women in younger generations.

After all, we are better in our humanity when we commit ourselves to curiosity, learning, and personal growth. Everyone has a lot to learn, especially from people who may have a different perspective. After all, there are 8 billion people, each with their own unique perspective, on planet earth.

2. Schwab Study: Workers Continue to Prioritize 401(K) Saving Amid Anxiety About Inflation and Market Volatility

Source: Charles Schwab

Even when facing economic uncertainty, Americans are demonstrating resilience in prioritizing their futures.

“While many workers are trying to cut back on spending, some costs are unavoidable and certain areas of their finances have taken a hit. Despite these challenges, retirement saving continues to be a priority for workers, who have maintained their 401(k) savings rates and largely stayed on top of their 401(k) investments over the past year.”

Beyond discussing 401(k)s, this study goes deeper into perspectives for how everyday people are seeking personal finance advice.

“Half of workers would feel comfortable asking artificial intelligence tools like ChatGPT for help with financial planning, but for now, actual adoption is very low (4%),” explains the study. “Workers are still most likely to follow advice from a human professional (95%) over computer-generated advice (74%).”

Your perspectives, as an advisor, are more important than ever given tough times.

3. Two Ways to Build Strong Client Relationships

Source: Morningstar

Opening up is always hard.

So how, as a financial advisor, can you support the process of having more meaningful conversations with your clients?

This article explores principles of behavioral psychology to help you build a solid foundation for a more successful relationship with investors.

“Trust is about vulnerability, and for an individual to feel comfortable with vulnerability, they need to believe in the intentions and behavior of the other party,” writes Samantha Lamas, behavioral researcher at Morningstar. “To develop trust with a client, start by putting those intentions and behaviors on display.”

Trust is how you build a strong, resilient business that makes you proud.

4. ESG Has Become Significantly More Important for Clients Say Wealth Professionals

Source: Wealth Professional

The topic of climate change is top of mind for everyday investors.

“A new survey from risk management solutions provider Ortec Finance reveals that 96% of respondents say clients are increasing this focus, including 74% who have seen a slight uptick and 22% who report a dramatic rise.”

A valuable step your advisory practice can take is to articulate your firm’s stance around the topic of ESG. What’s important for investors to keep top of mind? When does an ESG investing strategy make sense?

It’s helpful to be prepared to answer these questions.

5. Time-Starved U.S. Financial Advisors Considering Alternative Options, J.D. Power Finds

Source: J.D. Power

In today’s market environment, proactive communication is crucial. However, advisors are finding it a challenge to give their clients enough attention and focus.

“Nearly one-third (28%) of advisors say they do not have enough time to spend with clients,” explains J.D. Power. “Advisors falling into this category spend an average of 41% more time each month than their peers on non-value-added tasks.”

Some more findings:

“With the average age of U.S. financial advisors being 56 years old, 20% of advisors indicate that they are five years or less away from retirement. In addition, 30% of employee advisors and 28% of independent advisors say they ‘probably will’ be working for their current firm in the next one to two years as opposed to saying they ‘definitely will.’ This suggests that even if advisors are not contemplating leaving the industry or their firm, many may become apathetic about their situation. Among these two groups, overall satisfaction and NPS scores are significantly lower than among advisors who say they are strongly committed to their firms, meaning they could be perceived as hampering efforts to attract and retain talent.”

“Among employee advisors, overall satisfaction and NPS scores are significantly higher among female advisors than among their male counterparts.”

Time and passion are crucial in the financial advisory profession. Remember that your clients need you now more than ever. There’s no better time than Back to School season, to keep an open mind.

About CircleBlack

CircleBlack is an all-in-one technology platform for relationship-focused financial advisors. To learn how our software can help you build, manage, and grow your wealth management practice, get in touch to request a demo.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.

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