84 results found

As life expectancies improved, the "Financial Independence, Retire Early" movement was born. But a very long time in "retirement" requires more flexible spending rules.

Retirement bucket strategies tie specific expenses to specific portfolios. But looking at categories of spending doesn't necessarily work. A better approach is to segment spending within each category.

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 1.50 CE

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 0.75 CE

Every financial adviser has access to the same products and portfolios – we must differentiate our advice value and specialisation, innovate new business models, and focus on the client experience.

Michael Kitces | 0.75 CE

Helping clients is about more than just educating them as to the right decision, it's also about helping them to actually take action.

Michael Kitces | 0.75 CE

Where portfolios are invested to achieve goals, the first step in the process should be to align the investor's goals - not the portfolio - to their risk tolerance. Implementation is then straightforward.

While robo-advisors have been the big buzz as replacement humans, they’re not (and data proves it). Technology alone is not enough (otherwise everyone with a FitBit on their wrist would be healthy).

Michael Kitces | 0.50 CE

The combination of man and machine - tech-augmented humans or "cyborgs" - can be more effective than either alone, posing the greatest opportunity to human financial advisers in the long run.

Michael Kitces | 0.50 CE

While economics studies how humans allocate scarce resources, and psychology studies the human mind and behavior, there is a gap at the intersection between the two – an emerging new body of knowledge dubbed, "Finology".

Despite the view that computers will come to dominate certain areas within financial planning, the reality is that there are still ways that computer-human duos can be more effective than computers or humans alone.

A recent research paper that likens the three main retirement planning approaches to shapes provides an interesting way to think about three different retirement planning approaches. In the end, the best option may incorporate all three.

Time-based rebalancing is inefficient. Research suggests that tolerance band rebalancing strategies minimise trading and boost portfolio returns. Such threshold approaches may be used in both the portfolio accumulation and decumulation phase, and act as a pre-commitment device for clients.

Michael Kitces | 1.00 CE

Advisers are increasingly eschewing active managed fund managers, and instead are supplanting themselves as tactical managers of "passive" ETF funds.

Michael Kitces | 1.00 CE

Portfolio construction practitioners have traditionally split into two camps - passive indexers, or active investors aiming to either pick winning companies or fund managers who can identify such companies. In this Critical Issues Forum session at the 2011 Conference, US-based researcher Michael Kitces provided a new and robust framework to understand the opportunities for value creation in portfolios...

While the use of a discount rate to compare strategies or choices that are dispersed or occur over time is useful, the proper discount rate is the investor's expected rate of return, means that the "right" discount rate will vary from one person to the next.

Michael Kitces | 1.00 CE

The classic view of cash when investing is that it's something to minimise. But a recent study found that we're just not content without a healthy allocation to cash. In fact, pushing investors to put all their cash to work increases their financial stress.

The danger that sequence of return risk can devastate a retirement portfolio is both increasingly recognised and frequently misunderstood. Three research-driven strategies can help manage it.

Michael Kitces | 1.00 CE

Research suggests we mentally account for income and assets with an intrinsic hierarchy of priorities - a "hierarchy of retirement needs". So retirement income strategies should be reframed to answer three questions.

Monte Carlo analysis is commonly used to evaluate retirement spending plans - but our cognitive and behavioural biases may interfere with proper interpretation of the results.