Weekend Reading For Financial Planners (September 12–13)

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the news that a recent survey from Vanguard investigates the perspectives of men and women when it comes to investing and working with a financial advisor, finding in some cases that assumptions about these groups might not always hold. Overall, respondents expressed greater confidence in making a range of financial decisions when working with a financial advisor, though women who had left an advisor were most likely to cite the advisor not working in their best interest as the reason for doing so. Both men and women expressed a range of preferences in terms of communication styles from financial professionals, with an educational approach topping the list for women and a data-driven/analytical approach leading for men (though the preference gaps for men and women on individual styles weren't particularly large). Which, altogether, demonstrates the value of exploring each prospect's and client's unique goals and preferences, as they very well might diverge from an advisor's assumptions.

Also in industry news this week:

• An examination of Form ADV filings finds that firms that disclosed AI use actually saw higher staff headcount growth, indicating that for a subset of firms AI adoption is intended to complement, rather than supplant, human team members
• While the SEC under chair Paul Atkins appears to be less interested in pursuing broad enforcement actions related to advisory firms' use of off-channel communications with prospects and clients than in years past, an attorney and former SEC official suggests that implementing and enforcing policies toward electronic communications (and their storage) could help firms avoid client harm (which could make them subject to an enforcement action) or, in the case of broker-dealers, continued FINRA scrutiny of communication failures (even if no client harm has occurred)

From there, we have several articles on retirement planning:

• An analysis of Social Security claims data and self-reported health amongst retirees finds that those who are in poorer health tend to claim Social Security earlier (in many cases, correctly identifying a shorter expected lifespan)
• While wealthier individuals often are able to delay claiming Social Security benefits (to receive their maximum monthly benefit), those who are particularly wealthy might choose to claim earlier to fund insurance policies that could, amongst other purposes, help heirs pay for estate taxes owed
• How the ability to claim six months of retroactive Social Security benefits after reaching Full Retirement Age can both be an opportunity (by giving a client more confidence in delaying benefits) and a potential trap (by having a permanently lower monthly benefit if retroactive lump-sum benefits are taken)

We also have a number of articles on client communication:

• How financial advisors can support clients in riding the 'waves' of emotion (both positive and negative) that can arise during meetings
• A step-by-step framework for working with a client who has recently experienced the loss of a spouse to both give them space to grieve and to prepare them to make key planning decisions
• Strategies for advisors when working with a client experiencing "ambiguous loss", such as a loved one suffering from dementia

We wrap up with three final articles, all about the tradeoffs of being a 'maximizer':

• How certain tax planning strategies could lead to a lower lifetime tax bill but also less enjoyment of one's wealth
• Why much of one's health and financial success is determined by getting the 'big things' right and how trying to optimize for the rest could lead to greater stress
• The value of jumping off the "hedonic treadmill" and taking a step back to recognize when key goals have already been met

Enjoy the 'light' reading!

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