AdvisorIQ

As part of our ongoing commitment to helping financial advisors succeed in today’s challenging operating environment, CLS has created the AdvisorIQ education series, through which we publish actionable industry-related content designed to help advisors enhance their service offerings and run a better business.

Understanding Investors

An overview of the research

Globally, money and personal finances are one of the largest sources of stress for people. Despite the criticality of personal finances for our lives and futures, research shows a pervasive financial illiteracy at even a basic level of knowledge for most people. The knowledge gap in personal finances is not the only (nor the most predictive) factor influencing people’s financial story—nor are intelligence, statistical abilities, or wealth. Indeed, even if in an ideal world we were to pass a national initiative to increase financial knowledge through targeted education, the reality is that individual decisions about money and personal finances are often emotional and reactive, rather than rational or strategic.

This white paper answers the question, what if we took the broader notion of personal finances out of the equation, and focus specifically on investments and investor-advisor relationships?

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Integrated Independence

Fiduciary technology for the DOL rule and beyond

Orion Advisor Services, LLC (CLS’s sister company) developed this white paper in an e ort to provide information surrounding the DOL duciary rule and how technology can enhance the ability for advisors to e ciently adhere to rapidly changing duciary standards.

When advisors utilize CLS, they receive access to a wide range of integrated technology solutions. Our duty is to clearly transmit investment strategy, market insights, and performance on a consistent basis. We leverage the resources and technology of Orion to bring leading tools to market to continuously enhance the investor experience, including investor portals, quarterly reporting done via video, and weekly market updates published in print on our site and also in video. In addition, we provide advisors with access to an extensive proposal generation platform and risk analysis tools.

We invite you to explore this content and reach out to CLS should you have any questions about the integrated technology CLS can provide you with.

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Bridging The Internal Succession Gap

Strategies for Managing the Transition Between Selling Owners and Empoyee Buyers

The next chapter of “Succession Planning: Reinvent Your Practice,” dives deeper into the the “reinvention” strategy for internal succession. With a focus on the specific challenges of internal ownership transitions, this paper suggests actionable strategies for advisors to incorporate during a transition. In addition it offers guidance in developing a framework for the long-term continuity for founding owners, their chosen successor(s), and the firm’s clients.

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The United States Department of Labor (DOL) has finalized the rule that will impose a fiduciary standard on all investment advice to retirement accounts. In order to impose a uniform fiduciary standard, the rule will broaden the definition of investment advice under the Employment Retirement Income Security Act (ERISA) of 1974. This white paper will discuss how the rule impacts financial advisors, review the current fiduciary landscape, discuss the new definition of fiduciary investment advice, analyze how conflicts of interest will be handled under the new rule, cover the implementation period, and reveal how existing business is impacted by the rule.

This white paper also includes data that CLS has gathered concerning the perceived fiduciary meaning as understood by financial advisors. An appendix of commonly asked questions and their answers can be found at the end of the paper.

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As the wealth management industry continues to evolve, becoming more competitive and complex, advisors need to embrace new business models in order to remain successful. A key trend that is front and center in wealth management today is the movement by advisors to embrace fee-based business models and transition away from a commission-based transactional approach.

How can advisors who have yet to embrace fee-based business models take action and ensure their long-term sustainability in a rapidly changing industry?

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The Coming Automation of Wealth Management

What It Means for Today's Financial Advisors

The financial industry is at a crossroads with the emergence of automated investment services tools, termed “robo advisors.” This new technology is viewed as both a threat and opportunity for financial advisors. A study conducted by CLS found that 80% of respondents felt that robo advisors would either have a positive or neutral impact on their practices, while 79% of the respondents said that the robo threat is significant or potentially real.

Technology waits for no one, and advisors are taking a risk if they wait too long to embrace the advantages that robo advisors offer. This white paper is an in-depth review of industry perceptions of robo advisors, practice management implications, how to deploy a robo advisor solution, and the future of wealth management.

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Reinvent Your Practice

Alternatives to Traditional Succession Planning

Due to the growing “sell your practice” message being promoted by industry experts, roll-up firms, and consultants, many advisors have become convinced that their only succession option is to sell their business. However, the lack of succession readiness for the majority of the industry, along with valuation issues, makes selling a practice a difficult proposition for the majority of advisors.

Fortunately, there are many alternative approaches advisors can pursue, such as “reinventing” themselves and their practices in order to continue working with the clients they enjoy, while streamlining their operations, and their practices. The reinvention option can empower advisors, in their later years, to continue doing the things they enjoy, lessen their workload, and continue to generate income to fund their retirement years.

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Making Retirement Income Last

A Roadmap for Guiding Investors through Retirement Income Issues

This report has been developed to provide financial advisors with a roadmap for helping answer their clients’ important retirement questions, such as:

  • “How do I support my income needs in retirement?”
  • “Will my risk tolerance allow me to use a total return approach?”
  • “What place do bonds have in my portfolio?”
  • “Should I buy a Variable Annuity?”
  • “Will I outlive my money?”

Given the current interest rate environment and increasing availability of investment products, the traditional approach to retirement income may no longer be suitable. This paper explores different options and in order to help an investor and his or her financial advisor best approach the subject of how much savings and income is enough and how to make it last.

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The Employee Retirement Income Security Act (“ERISA”) was enacted to provide minimum standards for retirement plans in private industry and to protect the interests of participants and beneficiaries of those plans. Many of ERISA’s rules are grounded in common sense concepts, the most familiar of which is the fiduciary status requirement. However, application of the fiduciary requirements can become quite complex in the ERISA framework.

Many sponsors of qualified retirement plans that qualify for special tax treatment under ERISA may not have the necessary experience to navigate the complicated fiduciary standards under ERISA. This white paper is intended as an introductory primer on the interactions between CLS’s qualified plan service offerings and the various fiduciary standards under ERISA.

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The Inefficiencies of Target Date Funds

Why a Managed Approach to Retirement Planning Leads to Better Outcomes

This report highlights the various features, benefits, and potential inefficiencies of TDFs, which are among the fastest growing options being offered as a Qualified Default Investment Alternative (QDIA) in many retirement plans.

Due to their unique structure, risks, costs, and limitations, TDFs have certain inefficiencies that may impact investors’ ability to meet their retirement goals. As an alternative approach, incorporating managed solutions that are individualized and customized to investors’ needs, goals, and life situations can be an attractive opportunity to enhance retirement plan investing choices and manage the limitations of TDFs.

By integrating managed solutions that utilize low-cost investments such as Exchange Traded Funds (ETFs) as part of the QDIA continuum, advisors, plan sponsors, and investors will have more choice, flexibility, and personalized solutions available to help meet retirement goals.

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