WEALTH MANAGEMENT

Fifteen Age-Based Client Milestones to Cover

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Source: Bento Engine

 

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Hecker
 Philipp Hecker is a co-founder and the CEO of Bento Engine, a FinTech at the intersection of technology and impactful wealth management advice. At J.P. Morgan he founded and led the Wealth Planning & Advice organization. He holds an MBA from Harvard Business School.

Close the advice gaps.

By Philipp Hecker
The Holistic Guide to Wealth Management

Despite the significant growth of the U.S. wealth management industry over the past few decades, the state of advice in this country falls short of its potential. Americans deserve more and better advice beyond just investment-related matters. Several concerning statistics highlight this issue:

  • A Caring.com survey finds that a staggering 67 percent of Americans pass away without a will, lacking even the most fundamental trust and estate documents.
  • An Edward Jones survey finds just one in five U.S. parents have saved, or are planning to save, for their children’s education using a 529 plan. In fact, two thirds (67%) of survey respondents said they were not aware of the features and potential tax benefits of 529 plans.
  • Vanguard data finds that just one in six retirement account holders over age 50 are making catchup contributions to which they are eligible.

Our firm’s research found that three in five investors (60%) who have advisors are not getting the guidance they need about making retirement catchup contributions, while two in five (40%) lack clarity about fundamental decisions around the optimal timing for initiating Social Security benefits.

Imagine what it’s like for the majority of Americans who don’t have financial advisors.
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How Much Risk Do Clients Need?

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portrait of Aaron Klein
Klein
 Aaron Klein co-founded Nitrogen and led the company to 42 straight quarters of growth as its first CEO. He was named by Investment News as one of the industry’s 40 under 40 executives, and the Wealth Management Industry Awards honored him as CEO of the Year in 2023.

Help them embrace it to reach their goals.

By Aaron Klein and Dan Bolton
The Holistic Guide to Wealth Management

We face risks every day in our lives, from getting into our cars, to eating meals prepared at a restaurant, to flying in planes, to attending parades, sporting events and concerts. Rather than burying our heads in the sand, most of us get on with our daily lives by making calculated assumptions about what risks are safe and manageable and which ones are reckless.

When it comes to our money, however, risk plays all kinds of games on our emotions and often triggers our fight-or-flight response. The Securities & Exchange Commission defines financial risk as “the degree of uncertainty and/or potential financial loss inherent in an investment decision.” In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.

portrait of Dan Bolton
Bolton
 Dan Bolton is vice president of corporate marketing at Nitrogen. He is the creator of the Fearless Investing Summit, one of the most dynamic and well-attended conferences in the wealth management profession, and launched the pre-eminent benchmark Advisor Growth Survey.

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So, if you’re thinking of adding an investment advisory component to your accounting practice, just know that being crystal clear about each client’s unique tolerance for risk is the first step toward getting them invested properly.

What is risk tolerance?

Risk tolerance is an investor’s ability (and willingness) to endure market fluctuations and potential losses without abandoning their investment plan. READ MORE →

What a Wealth Advisor Is Worth

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PLUS: Behavioral finance vs. behavioral coaching.

By Rory Henry
The Holistic Guide to Wealth Management

Malcolm Forbes liked to say, “Advice is more fun to give than to receive.” But the right advice in the right framework can be invaluable. And sometimes, the best advice you’ll ever receive is what prevents you from engaging in harmful behaviors.

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Michael DiJoseph, CFA, a senior strategist at Vanguard Investment Advisory Research Center, has spent a large portion of his career studying how financial advisors advise clients, how they can get better at providing advice and how we can measure the value of advice because these days, everyone from salesclerks at the mall to NASA rocket consultants seem to have the word “advisor” attached to their job title. More on that in a minute.
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Nick Pasquarosa: From Door-to-Door Bookkeeping to a 1,000-Client Cloud Firm | Holistic Guide

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Advisory at Scale Requires Systems, Not Heroics. Plus 5 More Takeaways.

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Build a 7-figure firm in just 4 hours a week!

When firms talk about innovation in accounting, they often start with technology. But in my conversation with Nick Pasquarosa, founder and CEO of Bookkeeper360, it became clear that technology was never the starting point for his firm. It was the result of listening closely to small business owners and building systems to solve their most persistent problems.

MORE Rory Henry and The Holistic Guide | BOLT: Bookkeeper360 Launches Mobile and Web App Featuring AI-Powered Virtual CFO

Pasquarosa founded Bookkeeper360 in 2012, long before cloud accounting was the norm. What began as a door-to-door side hustle helping local businesses reconcile their checking accounts evolved into a nationwide cloud accounting firm serving nearly 1,000 small business clients with a team of more than 75 professionals across 26 states.

“I started this in high school,” Pasquarosa tells me. “It really started with an interest in helping small businesses stop running their business off their bank account balance and [instead] giving them timely, accurate books so they could make real-time decisions.”

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Subscriptions Make Clients Feel Like Members

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Why they beat AUM and hourly fees for wealth management.

By Rory Henry
The Holistic Guide to Wealth Management

Recently I listened to a lively debate about financial advisor compensation between Ramit Sethi, author of the best seller “I Will Teach You To Be Rich,” and Michael Kitces, host of the Financial Advisor Success Podcast. Sethi was highly critical of the traditional 1 percent of assets under management (AUM) model that so many wealth advisors charge. Instead of 1 percent of AUM, Sethi argued that advisors should think of themselves as accountability partners (i.e., personal trainers for clients’ money) and instead charge them based on how they help them modify their behaviors to produce better outcomes.

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For instance, a good advisor can help clients adopt good behaviors such as saving more of every paycheck and sticking to their investment plan during volatile times. Good advisors, said Sethi, also help clients from engaging in their old wealth-destructive behaviors such as speculating on hot stocks in the news or cashing out of the market at the first sign of trouble. By the way, helping clients modify behaviors and produce better outcomes is what an Advis-ROR™ does.

Let’s explore how an AUM/subscription model using a virtual family office is a win for both firms and the clients they serve.
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