Financial Advisor Reading List: July 2023

Jul 17, 2023 | Blog Posts

Facing economic uncertainty, a lot of financial advisors are navigating uncharted territory. Keeping this context in mind, empathy continues to be a superpower when providing support to investors. So how can you build up and harness this skill as a financial advisor? The reading list below will help you answer that question.

1. It’s not just you — 28% of financial advisors say that they don’t have enough time to spend with clients

Source: J.D. Power

Freeing up time is the key to delivering more value to your clients. But doing so isn’t always easy.

“In difficult market conditions like the ones we’ve been experiencing for the past several years, great investment advisors set themselves apart by proactively addressing their clients’ needs, delivering comprehensive guidance and communicating clearly and frequently about the issues that matter most to their clients,” explains Craig Martin, executive managing director and head of wealth and lending intelligence at J.D. Power.

“Right now, many advisors are struggling to find the time to deliver the level of hands-on service they know is critical to growing their business. They’re spending more time on administrative and compliance-oriented tasks and, in many cases, they are starting to question whether their firm is committed to providing them with the support and resources they need to succeed.”

Read more from the study here.

2. Top regulatory issues facing financial advisors

Source: CNBC

Regulations exist for the protection of consumers. As a financial advisor, it’s a good idea to know your boundaries — especially if you are guiding your clients through 

In this 15-minute video segment, Brian Hamburger, a consultant, attorney, consultant, speaker, and columnist helps outline precautions that financial advisors should be thinking about.

Remember, when you participate in marketing, it’s a good idea to run your concepts by a compliance consultant and/or legal counsel to assess the specific risks to you and your firm.

Watch the video segment on CNBC.

3. Artificial intelligence won’t replace financial advisors

Source: Morningstar

Over the last year, the number of U.S. large-cap companies mentioning AI on quarterly conference calls doubled, according to an analysis published at Morningstar. AI is one of the biggest trends in technology, and everyone’s trying to make sense of it. What does AI mean for the financial advisory profession? Here’s one take:

“AI will change the game, but it is unlikely to replace financial advisors,” writes Danny Noonan for Morningstar. “Rather, it will likely be an enabler, helping advisors increase productivity and deliver better advice for complex client scenarios.”

“For advisors who leverage social media for business development, AI can make posting on LinkedIn more efficient. For instance, if an advisor writes a blog on estate planning and wants a one-sentence executive summary plus brief bullet points, this is where AI excels. Advisors could simply paste a link to their article in the AI prompt, provide instructions and a request for a few versions of the summary, pick their favorite, and post to LinkedIn. A job that previously took a half-hour or longer might now take five minutes.”

Read more about AI from Morningstar.

4. Does personal experience with COVID-19 impact investment decisions? Evidence from a survey of US retail investors

Source: International Review of Financial Analysis

A team of researchers recently published an analysis of investment decisions during the early part of the COVID-19 pandemic. The study uncovered that people who personally experienced COVID and who know someone who died because of COVID, increase their investments by 12%.

One of the research goals was to contribute to the field of behavioral finance. 

“In the face of health threats, emotional responses interact with cognitive appraisal and the combination of both determines decision-making,” explain this authors.

Even though the pandemic has passed, the findings may be helpful for advisors to keep in mind when clients are navigating tough times.

The full study is available at ScienceDirect.

5. Major Trends for Financial Advisors

Source: Morningstar

Liz Koehler, managing director and head of advisor engagement at BlackRock, and Jonathan Linstra, managing director of Morningstar Wealth recently teamed up to record a podcast for the advisor community. Here were some topics of conversation that came up:

  • “Everyone has a value proposition, or you wouldn’t be in business. But what we’re seeing more advisors evolve to is, why they’re in the business, why they serve the clients—and linking it to real stories to bring it to life.”
  • “Clients are certainly expecting more transparency, especially when it comes to pricing, pushing advisors to evolve and improve their value proposition.”
  • “The demands on advisors are increasing daily, and they’re navigating so much … particularly in times of volatile markets. The phone doesn’t stop ringing.”

A key takeaway from the article is for financial advisors to keep an open mind. Things are changing, and it’s impossible to know what the outcome is going to be.

You can listen to the full episode from MorningStar or read the article here.

6. America’s economy on the edge

Souce: Financial Advisor Magazine

With so much economic uncertainty, it’s likely that investors have questions about it. This article, written by Michael J. Boskin, a professor of economics at Stanford University and senior fellow at the Hoover Institution,  provides some perspective to help guide responses.

“Still, the situation today is somewhat unprecedented for the United States. Never has government spending increased so massively at a time when the economy was already at full employment,” Boskin writes. “While the White House and Congress were able to reach an agreement to suspend the debt limit and place some modest constraints on spending, the big budget battles are yet to come.”

The best that financial advisors can offer is to stay informed.

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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