Broker Check

Stuff I Learned Recently

February 25, 2020

I just spent two days in a hotel ballroom occasionally staring at a really nice beach out the windows at AssetMark’s Gold Forum, an annual conference with lots of topics relevant to financial planning.  I took a bunch of notes and thought I’d give you some highlights of what was presented.  You might be interested to know what we are told our clients think about and want (Topic Discussions in Bold):

What do clients want?

  Transparency:  in pricing, our relationships with them, conflicts of interest we have with advice we give

  Social Reinforcement:  they want their values reflected in how we deal with them; don't want to work with companies who don't espouse their values

  Bundling of services:  Our clients are looking for the total package, not piecemeal solutions; they can do piecemeal on their own

  “Know Me”:  they want a holistic experience tailored for them

Regulators want us to communicate price and value clearly; fees should be completely transparent

LeftBrain/Right Brain

  Men have the attention span of 9 seconds, the same as a goldfish.

  The way to connect with clients is to tell stories; we all learn better by associating things with our personal experiences


Boomers own 67% of the wealth in this country, GenX is 16%,  Millennials are 3% (rest is owned by older or younger?  I didn't quite get that math...)

76% of people surveyed want to buy from companies that share their values on social issues

67% of people would stop doing business with companies that they perceive do not share their values; wow.

Clients are more than willing to pay for advice but want low cost investments.  This is driving down investment expenses.  Must deliver more for our fees in terms of service.  Clients want personal service but demand technological sophistication.  This seems at odds but is really just confirmation of what people tell me.

AssetMark is creating compelling technology (my comment based on what they showed us).

Dr. David Kelly, JP Morgan Economist:

We will have economic growth, but is slow.  Can’t go fast because already at full employment and low inflation.  Think of a child’s slide; slope is less at the bottom.

Tight labor markets have not produced inflation, which may be the result of rising income inequality in the US.  Companies have convinced workers they don't need huge pay increases; low inflation reinforces this.

The top 10% of income-earners in the US spend 67% of their income (and save the rest).  The bottom 90% of income-earners in the US spend 101% of their income (borrow the rest).  This means that there is less demand, so less inflation, but slower economic growth.

Economic growth in US had a blip up in 2018 as a result of massive tax cut, but that effect is all gone and we are back to 2.5% growth, now with annual trillion-dollar deficits.  Corporate tax cut made sense, but it should have been paid-for.

Investors overestimate the impact of political risks (I take this to mean that re-electing Trump or electing Bernie will not have disastrous economic effects, but I'm not sure he meant it that way...)

Valuations of domestic equities are high; give extra consideration to International investments.

John Boehner

A few interesting stories.  He didn’t provide much insight, IMO, but he did cry twice. (legitimately; he seemed like a truly sincere guy, just wrong on lots of things)

Social Security

If you plan to keep working, don’t start collecting social security.  Makes no sense tax-wise.

To reduce taxation, focus on Roth conversions, Life Insurance Loans, Reverse Mortgages, HSAs and RMDs direct to charities

Changes in 2015 got rid of lots of Social Security strategies

Likely we will have another re-vamp of the system where our grandchildren won’t get full Social Security retirement until age 70...but they’ll live to 120 so they’ll be fine (humor here)

Understanding Emotional Intelligence

What is Emotional Intelligence and why is it important?   

Assess yourself and your staff to know how you communicate with each other and with your clients

(DISC):  Dominance, Influence, Steadiness, Conscientiousness

Review our communication patterns and the harmful communication methods we want to avoid.

Anyway, that's what I got out of it.  It's good to sharpen the saw, so to speak.  As always, there's a lot to learn.