Weekend Reading For Financial Planners (March 14–15)

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that the latest T3/Inside Information Software Survey shows an uptick in advisor use of Artificial Intelligence (AI) tools, with approximately 52% of survey respondents using AI search and generative language functionality (up from 42% in the previous year’s survey) and 43% of respondents reporting use of AI notetaking tools (with advisor-specific notetaking tools Jump and Zocks leading the way in market adoption in this category). At the same time, AI tools have yet to displace legacy tools in the most popular AdvisorTech categories, including CRM, financial planning, and portfolio management, where established providers continue to dominate market share (suggesting that, at this point, advisors are largely using AI as a supplement, rather than as a replacement, for existing software in their tech stacks).

Also in industry news this week:

In its latest annual “Dirty Dozen” list of tax scams, the IRS highlighted schemes involving non-cash charitable contributions and capital gains fraud (suggesting that financial advisors can play a valuable defensive role for clients who are pitched such schemes)
Amidst the current hot M&A market (and a desire amongst buyers for fast-growing firms), the size and length of earnouts are increasing in some deals, highlighting the value for sellers of looking beyond headline valuations to the terms of the deal to ensure they maximize their return

From there, we have several articles on investment planning:

How a “total portfolio approach” that groups investments by risk and performance characteristics (rather than asset class) could lead to a smoother ride for investors
The pros and cons for investors of holding rental real estate properties (and how financial advisors might be able to recreate many of its upsides within an investment portfolio)
How financial advisors might explain the benefits of portfolio diversification to different types of investors based on their risk tolerance and capacity

We also have a number of articles on client communication:

Given research findings that consumers often aren’t effective at crafting goals on their own, a series of exercises can allow financial advisors to help their clients set better goals (which can lead to more effective planning recommendations)
An alternative approach to setting “SMART” goals that could lead to more inspiring goals (that could also lead to a more meaningful journey along the way to achieving them)
A three-part approach to creating a “statement of financial purpose”, which can serve as a foundational document for clients and lead to better-informed planning decisions

We wrap up with three final articles, all about prediction markets:

A primer on prediction markets, including what makes a particular market effective (and more likely to predict outcomes correctly)
How financial advisors can effectively discuss prediction markets (and the responsible use of them) with curious clients
How prediction markets have extended well beyond front-page news to include sports- and entertainment-based bets that are drawing in younger users

Enjoy the ‘light’ reading!