Planners Wary of Social Media Payoff

Social media is starting to shake up the world of wealth management, but amid some big success stories, many advisors are unclear whether it's worth their time.

Some advisors are quickly attracting new clients and building thriving practices through social media networking, said three top industry executives at a heavily attended panel at the recent Financial Services Institute annual conference.

As Adam Antoniades, president and CEO of First Allied, described it, advocating for advisor use of social media means having "skin in the game. ... The biggest thing we can do - and everyone can do it because it doesn't cost a penny - is to create awareness, making sure we're enabling them in the right way."

Yet for many, that won't be enough. "I know intrinsically I have to get involved, but I don't know how to get involved," said Steve Chipman, CEO of Foothill Securities. Among the problems with social media: "We've got this regulatory environment that doesn't allow us to operate in a free and open manner." - Scott Wenger

Advisors Cheer as FINRA Backs Off

FINRA appears to be pulling back from its campaign to regulate RIAs - and advisors couldn't be happier.

Richard Ketchum, chairman and chief executive of the self-regulatory organization, which oversees the U.S. brokerage industry, told Reuters he was bowing to political reality. "I'm not a big believer in beating a head against the wall," Ketchum said. "We'll focus on things we can impact."

FINRA spent much of the last couple of years lobbying to become the primary regulatory body for RIAs - spending nearly $5 million since 2008, according to Reuters.

FINRA's decision is "good news for consumers," said Steve Lockshin, chairman of Convergent Wealth Advisors and founder of Advizent, an industry organization that is advocating a new branding campaign for advisors. "Cost aside, a self-regulating organization is likely to fall short of the current highest standard of conduct that exists through SEC regulation." - Charles Paikert

Struggling for Retirement Income

Advisors are struggling to serve baby boomer clients and their retirement income needs, according to a new study from GDC Research and Practical Perspectives.

The study finds that advisors have trouble attracting and engaging with investors who are retired or almost retired. They are also split on the best way to generate sustainable income, according to the report, with many advisors lacking the skills to address basic issues like setting realistic expectations or educating investors on what retirement really involves.

"Advisors working with retirement income clients are most concerned with how economic uncertainty, rising taxes and the potential for increased inflation can undermine a plan," said Dennis Gallant, president of GDC Research and a study co-author. "Advisors are not as concerned with the possibility of rising interest rates and the threat this could pose to retirement income portfolios." - Lee Conrad

Time to Hire Younger Advisors?

Adapting to a changing client universe is critical for advisors, says TD Ameritrade Institutional President Tom Nally. The wealth shift to the echo boomer generation presents big opportunities: The wealth accumulated by Generations X and Y will increase to $28 trillion by 2018 from $2 trillion in 2011, Nally said at the company's annual advisor conference.

But planners will need to adapt for a new client base, he argued, citing a study that found 86% of younger investors said they'd fire their parents' advisors. Advisors will need to upgrade their technology, embrace social media and bring in younger team members to succeed. - Rachel F. Elson

Gen X & Y Ignoring Retirement Saving

Not nearly enough Gen X and Gen Y consumers are saving for retirement, according to an industry-funded research group.

LIMRA found that younger investors are not giving retirement the attention it deserves. The group sounded a warning for younger generations who will have to rely primarily on savings to fund their retirement, estimating that only 16% of the 116 million Gens X and Y consumers in the U.S. have defined-benefit retirement plans.

Women need to be encouraged to save more to compensate for the likelihood of extended longevity and fewer working years, LIMRA said. Only 43% of Gen X women and 27% of Gen Y women listed retirement as one of the top three reasons for saving. - Margarida Correia

'Stratospheric' Forecast for Recruiting

This will be a very active year for advisor recruiting, with lucrative deals available, according to the chief of a New York-based executive search firm focusing on the asset management community.

Mark Elzweig points to demographics: The advisor population is "stagnant and aging," he says; older advisors may not relish the hassles of a moving to a new firm. Meanwhile, barriers to entry for new advisors remain high: Less than 15% of trainees succeed in establishing a viable business.

With productive advisors in demand, Elzweig predicted that incentives from competing firms will remain at unprecedented levels. - Donald Jay Korn