The Smart Financial Advisor

How financial advisors can thrive by embracing fintech and goals-based investing

Bill Martin CFA

• Publisher: Harriman House
• Year: 2017
• eBook ISBN: 9780857195845
• Edition: 1
• Topic: Business
• Subtopic: International Business
• Index: Business

Improving client outcomes with goals-based investing Financial advisors stand at a crossroads. One path is grounded in traditional investing. Advisors who remain on this route face numerous hazards that impair their clients' long-term wealth and endanger advisory viability. The other path requires practitioners to adapt by embracing technology and goals-based solutions.Choosing the right road is vital for sustaining and growing advisory businesses in the years ahead.Industry veteran and financial technology expert, Bill Martin, CFA, creatively explains how financial advisors can sidestep the seven major hazards their clients face in conventional investing by choosing the smarter path of goals-based investing. This rewarding journey shifts the focus of traditional investing from products and performance towards a collaborative, tech-enabled framework built on personalized advice. Goals-based investing redefines success in terms of achieving each client's unique needs, desires, and aspirations – an approach that clients overwhelmingly prefer and which, crucially, leads to better outcomes for clients and advisors. The Smart Financial Advisor is a must-have guide for advisors who desire to differentiate and grow their practices amid commoditization, fee compression, and increasing regulatory requirements. Martin skillfully combines captivating stories, compelling research, and practical applications to show how you can embark on this path, engaging clients and improving their outcomes along the way. By adopting the fintech and goals-based strategies within this book, not only will you learn the secrets to survive today's industry challenges, but you will also discover how to truly thrive as a smart financial advisor!

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First published in Great Britain in 2017

Copyright © Bill Martin

The right of Bill Martin to be identified as the author has been asserted in accordance with the Copyright, Design and Patents Act 1988.

Hardback ISBN: 978-0-85719-583-8

eBook ISBN: 978-0-85719-584-5

British Library Cataloguing in Publication Data

A CIP catalogue record for this book can be obtained from the British Library.

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Whilst every effort has been made to ensure that information in this book is accurate, no liability can be accepted for any loss incurred in any way whatsoever by any person relying solely on the information contained herein.

No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, by the Contributors, or by the employers of the Author or Contributors.

About the author

Bill Martin, CFA

Chief Investment Officer

INTRUST Bank

www.linkedin.com/in/billmartincfa

Bill leads investment strategy for INTRUST Bank, emphasizing goals-based client solutions, portfolio construction using multifactor risk analysis, and tax-aware portfolio optimization. Prior to joining INTRUST, Bill served as director of managed account services at SunGard Advisor Technologies and Folio Dynamix. In this role, he consulted with and delivered investment solutions to wealth and retirement firms across the US. He has authored numerous industry articles and whitepapers and is a frequent speaker on investment strategies and industry innovation. Bill serves as a wealth management advisory board member for the American Bankers Association and participates on several client advisory councils of fintech and asset management companies. Moreover, as an active board member of Exploration Place, he advocates for science and technology learning across generations. Bill holds an MBA from the University of Kansas, is a CFA Charterholder, and has more than 20 years of investment-related experience.

Disclosure statements

The information contained herein is not meant as a source of specific investment recommendations, and the author and Harriman House make no implied or express recommendations concerning the manner in which any investor’s accounts should or would be handled, as appropriate investment decisions depend upon the investor’s investment objectives. The information is general in nature and is not intended to be, and should not be construed as, legal or tax advice. The author and Harriman House make no warranties with regard to the information or results obtained by its use and disclaim any liability arising out of your use of, or reliance on, the information. The views expressed are those of the author, are subject to change, and are not those of INTRUST Financial Corporation or its affiliates. Past performance is no guarantee of future results.

Contents

About the author

Disclosure statements

Contents

Praise for The Smart Financial Advisor

Acknowledgements

Preface

Introduction

Part 1 . Hazards that Derail Investor Goals

1. Reacting to External Factors

2. Failing to Plan

3. Quarantining Portfolios

4. Mismanaging Risks

5. Relying on Alluring Stories

6. Ignoring Taxes

7. Focusing on Past Performance

Part 2. Improving Investor Outcomes with Goals-Based Investing

8. Goals-Based Investing

9. Determining and Prioritizing Client Goals

10. Managing Client Wealth Holistically

11. Comprehensive Risk Assessment

12. Asset Allocation and Portfolio Construction

13. Tax-Smart Investment Strategies

14. Tracking Goal Progress

Part 3. A Collaborative Framework for Success

15. The Advisor-Client Relationship in a Goals-Based Practice

16. Fintech Solutions to Enhance Practice Growth and the Investor Experience

17. Two Stories of Transformation

Praise for The Smart Financial Advisor

“As an advisor you know the prime directive in financial advisory: care about your client’s goals and values, and advise accordingly. What you may not have noticed, because the tide has been turning slowly, is that technology, analytics and data transparency have been colluding to reveal to your clients just how well or poorly you are fulfilling your prime directive. Bill Martin’s The Smart Financial Advisor is your guidebook to building your craft to safely and successfully navigate this turning tide. It is a foundational text for the 21st century advisor disguised as common sense. Fortunately for you, Martin managed to get this book to print before the tide has consumed your practice. I urge you to take advantage of the timing and read this book.”

— Mark J. Nitzberg, Ph.D., Berkeley AI Research Lab, University of California, Co-Founder, and former CTO, Smartleaf, Inc.

“Bill Martin’s The Smart Financial Advisor is a thoughtful guide on how financial advisors should future-proof their practice in the new millennium – embrace goals-based planning and the Fintech tools that enable it. Advisors thinking about connecting robo advice and digital financial planning into their practice should read this book, or face technological extinction.”

— Lex Sokolin, Global Director Fintech Strategy & Partner at Autonomous Research

“The Smart Financial Advisor offers a thoroughly practical guide for financial advisors to achieve better outcomes both for their clients and for themselves. Over the last decade we have gained new insights about client behaviors that are demanding a fundamental shift in client interactions and investment decisioning. This book’s uniqueness lies in its articulation of how advisors can not only achieve a more collaborative client relationship and better investment outcomes through highly personalized goals-based investing, but also how those benefits can be scaled and extended using advanced financial technology tools and solutions. This clarity of vision provides a tangible roadmap for all advisors seeking to better service their clients while also growing their practices. I thoroughly recommend this book.”

— Simon Algar, Founder a...

Table of contents

• About the author