MichaelKitces

Our list of "Best Conferences 2025!", and be sure to take advantage of the discount codes that several have offered to Nerd's Eye View readers! Best in: -Overall Planning: @FPANorCal -Technology: @t3techhub -Advanced Tax Planning: @AICPA Engage and more! bit.ly/4fisUpb

The first half of 2026 has seen significant headline-driven market uncertainty, from geopolitical events to inflation risk. James Liu, CEO of Clearnomics, shares 10 data charts and explores how advisors can put news headlines into context for clients in a data-driven way, helping them maintain perspective and recognize that periods of uncertainty don't necessarily lead to weaker equity market returns. kitc.es/3SJGgF3

A Checklist For Conducting Private Fund Due Diligence: kitc.es/4eA0v0k For RIAs recommending private fund investments, the stakes have never been higher. The fiduciary obligations imposed by the Investment Advisers Act of 1940 – as interpreted by the SEC, reinforced through enforcement actions, and scrutinized in examinations – require more than familiarity with a manager's track record or confidence in a sponsor's reputation.  In this guest post, Rich Chen, founder of Brightstar Law Group, explores the practical due diligence considerations that advisors must navigate when considering a private fund investment, with a particular focus on what to look for in governing documents and the operational systems of the private fund. #advicers

Kitces IAR ETHICS CE Day! Fulfill your entire annual IAR Ethics requirement (6 hours) and earn 6 hours of CFP CE (including your required 2 hours of CFP Ethics), all in one virtual event. kitc.es/4gKVnbi On Aug 27, we've got a lineup of Ethics CE content with industry experts: Shelitha Smodic, Chris Stanley, Amy Irvine, Emil J. Ali, James Lundy, Patrick Noel, and Leila Shaver, hosted by myself and Adam Van Deusen. Full agenda and registration in the link ⬇️ #IARCE #EthicsCE #CE

As the media has increasingly reported on sometimes-eye-popping multiples, the reality is that because of how deals are actually negotiated and terms are written, the "headline" multiple is often not actually a fair reflection of what sellers are receiving in the end! kitc.es/4wcGO56 In this guest post, Rich Chen, founder of Brightstar Law Group, explores how real-world M&A deals are negotiated for advisory firms, and what, exactly, can lead to material divergences between the valuation multiple externally reported in a deal, and what the seller actually gets for the business, with the aim of helping sellers better prepare how to negotiate with buyers.

For some, taking advantage of the Roth conversion 5-year rule is a way for those well under age 59 1/2 to tap their IRA funds "early" without an early withdrawal penalty. For others, the reality is that the Roth conversion 5-year rule is a moot point anyway, because they already meet another exception to the early withdrawal penalty (e.g., already being over age 59 1/2). kitc.es/4fs4MlJ

Building A Systematic COI Referral Partnership Program: A step-by-step approach for how advisors can build a systematic COI referral partnership program (Gordon Stevens |@FPAJournal) More curated articles on marketing and referrals this #WeekendReading: kitc.es/4w9x7US

In the modified RMD approach, the average of the last three years of portfolio values is used to calculate the withdrawal, rather than the value on a single (arbitrary) day. The total portfolio value at a certain point, say December 31st, of each of the last three years is added together and divided by 3. This provides a rolling three-year (RTY) average value. kitc.es/4eU2nkM

A Child's Trump Account Could Grow To $5.5 Million – Or 'Just' $39,000 💰How the ultimate dollar value of an individual's Trump Account could vary widely depending on the pattern of contributions made during their early years and withdrawals made in adulthood (Spencer Look | @MorningstarInc ) kitc.es/4w9x7US

This #WeekendReading kicks off with @CharlesSchwab's annual RIA benchmarking study, which found that firms continued to post strong overall growth in AUM (17%) and revenue (13.2%), alongside a continued 97% client retention rate. kitc.es/4w9x7US That said, results varied across firms (particularly when it comes to organic growth net of market appreciation and acquisitions), with RIAs that have a written marketing plan, ideal client persona, and client value proposition gaining 87% more new clients in 2025 and bringing in 127% more new client assets than other firms.

Reg BI will grant – and in fact, require – that broker-dealers now explain their standard of conduct as being an obligation to act “in the best interests of the customer when making a recommendation.” Which leaves little room for RIAs to market their fiduciary obligation to act “in the best interests of the client” as a differentiator when broker-dealers will be able to use substantively identical words. Raising the question: how will RIAs differentiate themselves in the future? kitc.es/4vmWaCG

For several decades, one of the major revenue drivers for brokerage platforms was the various sub-TA, 12b-1, and other revenue-sharing agreements with mutual funds. Such that one of the non-trivially impactful reasons that ETFs are cheaper than mutual funds is that they don't HAVE these cost layers. The good news is that's driven a heavy shift to ETFs as a lower-cost alternative (in addition to some of their other benefits, obviously). But that's a problem for brokerage platforms (including wirehouses and also RIA custodians for the brokerage layer they provide to RIA), because outflows from mutual funds means their mutual fund rev-shares are on a declining base. So now we're seeing a rise of "ETF platform fees" of various sorts. Schwab and Fidelity are starting to do it, now Merrill is as well. As long as we don't otherwise pay custody/platform fees, the revenue to operate these platforms has to come from SOMEWHERE. Ongoing expansion of this trend will start pushing ETF expense ratios at least a little higher (because their dollars have to come from 'somewhere' to pay the platforms... again, if advisors and clients don't pay custody platform fees, they're going to pay indirectly anyway because the platforms need revenue to operate). What's striking here, though, is that Merrill is just applying this to "active" ETFs. (Queue debate about what constitutes "active".) Practically speaking, this seems like an interesting political maneuver - they leave index funds alone (where investors and advisors are most sensitive to fees), and it also gives Merrill a way to granting platforms like Vanguard an exception without exempting them by name. #Advicers, what do you think of this trend? (And how Merrill chose to do it only on 'active' ETFs?) "Merrill to levy support fees on active ETFs amid rev-share expansion" kitc.es/4fe1emP

What good books are you reading this summer? Any from this list put together by the Kitces team that inspires you? Any suggestions? 😎kitc.es/3QgOP9e

Wirehouses and insurance companies have, for decades and decades, only retained roughly 30% of their new recruits through their 3-5 year training programs. The industry has complained that this signals how "bad" large firms are at training - "100 years of effort and they can't figure out how to get it higher than 30% success rates!?" is usually how it goes. But as we've highlighted previously (e.g., kitc.es/4ynnHXx) the reality is that large firms don't do this because they CAN'T do better; they've done it because it's MORE PROFITABLE to have high failures. Remember, most of these firms are, at their core, manufacturers and distributors of financial product. High churn rates means they only keep recruits long enough to work their natural markets and then stop paying when the results fall off, and firms don't have to pay long-term trails to recruits that churn. So the system is INTENTIONALLY built so only the top ~1/3rd, who can sustainably keep selling company product beyond their natural market, are the survivors, and the rest are cut. So what's changing? The shift to advisory fees and AUM, which creates an environment where advisors have real capacity limitations beyond which they get full. At that point, the firm has to hire more, and needs a talent pipeline. So as Merrill (like many wirehouses) shift to advisory/AUM, the capacity limitations become real, and as Merrill puts it, "The focus on training comes as executives at Bank of America continued to stress that headcount growth would be key to serving an increasing pool of wealthy customers and adding assets under management." Want to grow more in an advisory model? Need more advisors. So what happens? Now, "miraculously", big firms suddenly figure out how to restructure their training from 70%+ attrition, to 70%+ graduation rates. Historical churn wasn't a failure, it was a feature. When the business models and incentives change, so too does the training. (And ironically, changes like this will probably do more to improve the industry's talent shortage woes than all the dollars organizations like CFP Board are spending to attract talent, because big firms still hire the overwhelming majority of all the people coming in.) "Merrill Expects 75% Graduation Rate for Advisor Trainees" kitc.es/4ytfBg8

Really interesting piece of research... an analysis of the impact of a financial literacy program for high-schoolers showed a very significant decline in future financial crimes committed by the students. In other words, the learners were less law-breaking in the future. But not in all crimes, just financial crimes, with a particular impact on reduced likelihood of engaging in embezzlement in the future. Why? Embezzlement is most commonly a financial crime that occurs when someone is under personal/household financial duress. More financial literacy = better financial balance sheet = less likelihood of being in a situation so bad you'd be tempted to commit embezzlement? "Financial literacy and financial crime: A regression discontinuity approach" kitc.es/4vquZqB

The typical advisory practice used 5 marketing tactics in 2024, up from 4 in 2022. Larger practices cast a wider net, with advisors with <$250k in revenue using a median of 4 tactics while practices with $5+ million in revenue deploy 9 different approaches. Full report here: kitc.es/3FAmFAC Client referrals dominate the landscape, with 88% of advisors relying on this approach, making it the most universally adopted tactic. Centers of influence follow at 62% usage, and 60% of advisors use both strategies together. This "referral generation" category clearly represents the foundation of most marketing efforts. The chart reveals an intriguing disconnect between popularity and revenue impact. While social media, SEO, and online listings see moderate usage rates, some of the highest revenue-generating tactics like seminars and networking have more selective adoption. In September, we will be releasing a 50k-word study containing updated numbers for 2026. Though in the meantime, you can check out our 2024 marketing study here: kitc.es/3FAmFAC

For any newer #AdvisorTech companies out there looking for more opportunities for exposure and growth, XYPN is hosting its annual "AdviceTech Competition" and applications are open for two more weeks (through July 30th). The AdviceTech competition is unique in that it's specifically focused on technology that supports the delivery of advice (as opposed to portfolio management or product distribution), though it can encompass support for any element of an advice-centric firm (from operations to financial planning itself). Submissions are limited to new companies (or at least entirely new standalone offerings from existing providers), as our goal from the start has been to highlight new emerging tech companies and offerings (that don't necessarily have the budget for expensive conferences and otherwise struggle to get visibility). The competition has an incredible history of winners. Providers that debuted in the AdviceTech competition include: - Snappy Kraken - Holistiplan - Vestwell - Income Lab - CurrentClient Details (and submission process) in the below for anyone who's interested. Or tag a provider or startup founder you know who you think SHOULD be submitting! 🤣 "AdviceTech Competition | XYPN LIVE 2026" kitc.es/44ximz6

How Much Do Advisory Firms Really Need To Warehouse All Of Their Own Data To Build Better (Agentic AI) Workflows? Will standalone AI software solutions continue to gain momentum, or will advisors prefer to remain with their existing platforms if more AI capabilities are rolled out over time? Will the AI notetakers eventually become CRM systems themselves? Can advisory firms really get the ROI from spending what can sometimes be millions of dollars to centralize and warehouse their own data? Let us know your thoughts! kitc.es/3SFceSK #advisortech

Proper documentation is unlikely to be at the top anyone's favorite activities... but accurate and thorough documentation not only can keep an advisor and their firm out of trouble with relevant regulators, but also deepen a fiduciary practice. kitc.es/4fzIyzf In this article by Shelitha Smodic, she shares how documentation that is important to a financial advisory firm can be thought of in three tiers: documents that are required by the regulatory requirements of the practice (Tier 1), documents that describe actions taken and client communications (Tier 2), and documents that explain an advisor’s rationale for recommendations or actions (Tier 3). #advicers

Getting started as a financial planner is difficult. Financial planning still has quite a ways to go to create the sorts of clear career progression paths that exist in the fields of medicine, law, and accounting. 10 tips for new financial planners looking to maximize their own progression down the financial advisor career path: kitc.es/44Tmiu5

In this latest #FASuccess, Christine DeMao, Chief Operating Officer of Gibson Capital, shares all about taking an intentional approach to succession planning since the early days: kitc.es/4x0AHkv She shares their "Path to Partnership" document that clearly outlines what the firm is looking for in new partners, and how Christine's the firm has had four rounds of partnership offerings (which have included not only executives and senior advisors, but also operations professionals as well). More in the episode 🎧