Saturday, March 16, 2019

Survey: CPAs, Wealth Advisors Increasingly Pessimistic about Markets, Economy

Hank Berkowitz


DC turbulence, Trump tariffs and overvalued stock market leading causes of concern. But, nation’s financial literacy gradually improving

·       Nearly 90-percent expect market correction within 12 months.
·       More than half (52%) say recession is “somewhat” or “very” likely.
·        Highest-performing firms most likely to publish, speak and do media interviews.
·        Wealth advisors are far more optimistic about their growth prospects than CPAs.
·         Millennials are the most pessimistic generation financially speaking.
·         Two-thirds of advisors (68%) believe America’s financial literacy has not improved—point finger at K-12 schools.

Norwalk, CT—March 16, 2019—Despite a record high stock market and historically low unemployment, financial advisors are taking a more cautious view of the financial landscape than they did at this time a year ago. According to the recently completed Wealth Advisor Confidence Survey conducted by HB Publishing & Marketing Company, LLC in association with The Financial Awareness Foundation and CPA Trendlines, seven out of eight CPAs and wealth advisors (87%) expect at least one more stock market correction of at least 10 percent within 12 months--up from 82 percent who felt this way in early 2018. Additionally, more than half of respondents (52%) believe a recession is “somewhat” or “very” likely within 12 months, up from 33 percent of respondents who felt this way in early 2018.

Leading causes of concern were:
1. DC turbulence,
2. Trump tariffs,
3. An overvalued stock market,
4. Fears about continued interest rate hikes, and
5. Long-term doubts about the Trump tax plan.

While more than three in four advisors (77%) expect their firms to grow in 2019, the percentage that expect “double-digit” revenue growth (i.e. more than 10%) in early 2019 declined significantly to 28 percent of respondents from 49 percent in early 2018.

“Accountants are clearly turning bearish on the economic and market outlook,” according to Rick Telberg, CEO of CPA Trendlines Research. “If there’s ever been a time for investors and taxpayers to be listening to their financial advisors, this is the time!”

Nearly 300 CPAs and independent wealth advisors participated in the 20-question online survey between January and early February 2019. No premiums, sweepstakes or other incentives were offered to encourage participants to respond—just pre-publication access to the results.

Most effective advisor communication tools

As was the case in 2018, firms that communicated frequently with clients were more likely than other firms to be optimistic about their growth prospects. As was the case in 2018, the five communication channels that respondents rated “very” or “extremely” effective were

1.      Public speaking.
2.      Writing articles for publication.
3.      Being quoted in the press.
4.      Publishing books/eBooks.
5.      Hosting webinars.

While respondents said publishing via LinkedIn had some value, most social media channels including Facebook, Twitter, Instagram and Snapchat were rated among the least effective advisor communication tools.

Nation’s financial literacy getting better, but plenty of room for improvement

Only one-third of surveyed advisors (32%) believe America’s financial literacy has improved since the 2016 elections. Nearly half of respondents (42%) believe it has remained stagnant in recent years and more than one in four (28%) believe the nation’s financial literacy is declining. Advisors overwhelmingly state that K-12 schools could make the biggest impact on improving our nation’s financial literacy—far more than any other types of educational, government or religious institutions.

“Unfortunately only 17 states require high school students to take courses in personal finance and not all teachers are financially literate themselves,” noted Valentino Sabuco, Executive Director, The Financial Awareness Foundation and co-author of the survey. “To make the situation even more challenging, many knowledgeable financial service professionals are not authorized to teach K-12 students because they don’t have teaching credentials. But, CPAs, attorneys, CFPs, wealth managers, charitable gift planners and personal investors can still make a substantial difference by joining the Improving Financial Awareness & Financial Literacy Movement,” added Sabuco.

About CPA Trendlines
With more than 200,000 followers, subscribers, and clients, CPA Trendlines is the largest independent community in the accounting profession. Its contributors are experts recognized in the profession as leading influencers, thought leaders, practitioners, professionals and advisors. CPA Trendlines provides exclusive tools, tips, trends, and guidance, plus exclusive research, insights, and commentary on the most pressing issues and fastest-changing trends. The community is dedicated to providing accounting professionals with smarter, faster, data-based decision-making to advance their careers and their organizations.

About The Financial Awareness Foundation
The Financial Awareness Foundation is a 501(c)(3) nonprofit organization whose mission is to significantly help solve a major social problem dealing with the lack of financial awareness and financial illiteracy. The Foundation serves as a nonpolitical “financial awareness advocate” for the general public, the financial services industry, nonprofits professionals and their organizations, educational institutions, municipalities, employers and the news media.

About HB Publishing & Marketing Company, LLC
Established in 1991, HB Publishing & Marketing Company, LLC is a hands-on content marketing and business development firm that helps wealth advisors, estate planners, CPAs, insurance professionals and financial industry associations dramatically improve their client communications, industry visibility, client retention and new client (or member) acquisition efforts. 

50 Washington Street, 7th Floor
Norwalk, CT 06854
(203) 852-9200

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Monday, March 11, 2019

Survey: Another Market Correction Likely in 2019. Should We Be Worried?

Our recently completed Wealth Advisor Confidence Survey™ 2019 found that nearly 90 percent of independent financial advisors and CPAs expect at least one more double-digit stock market correction over the next 12 months. Again, they don’t necessarily think we’ll end 2019 in negative territory, but they do think we’ll see some jarring bumps and potholes along the way.

So what?

Last week the bull market quietly celebrated its 10th anniversary, making it the second-longest running winning streak for stocks in history. Your clients who remained fully invested over that period were amply rewarded to the tune of + 305%. But alas, not all of them followed your advice and much of the American public simply missed out.

As Matt Phillips noted in The New York Times, “The psychological and financial damage inflicted by the 2008 financial crisis and the ensuing Great Recession continue to weigh heavily. Fewer people are invested in stocks than before the meltdown and many of them are wary of taking their gains for granted,” Phillips added.

That’s not very smart and several of clients have explained why in the national media recently. Here are some excerpts:

“Volatility returned to the markets in a big way in 2018, though the absence of volatility is a more abnormal market environment,” observed Anthony Glomski, founder of Los Angeles-based AG Asset Advisory and author of the book Liquidity and You, an exit planning guide for successful tech and business entrepreneurs. “These conditions are often amplified in the tech sector and can be viewed by patient long-term investors as opportunities to buy stocks that perhaps haven’t been discounted for years.”

Chas Boinske, CFA, head of Independence Advisors in Wayne, PA said that while it’s difficult to remain calm during a substantial market decline, it is important to remember that volatility is a normal part of investing. “Additionally, for long-term investors, reacting emotionally to volatile markets may be more detrimental to portfolio performance than the drawdown itself,” Boinske added.

Matt Topley, Chief Investment Officer of Fortis Wealth (Valley Forge, PA) said the surest way to go broke in stock market history is to try to predict market declines. “The U.S. stock market has experienced a dozen 20-percent corrections over the last 70 years and the market is still up by a total of 15,000 percent over that time. The market really works and managing money is not about what you know, it’s about how you behave,” added Topley.

James Nevers, CFP, an adviser with Soundmark Wealth Management (Kirkland, WA) abides by the adage: Time in the market always beats timing the market.” Since no one can consistently predict what the market will do in the short term, “the best any of us can hope to do is to capture as much of the diversified global markets return as possible,” explained Nevers. “Sure, there are plenty of examples of people getting lucky, but there are just as many stories of people losing it all on a ‘sure thing’. When you are constantly looking at when to get in and out of the markets you lose focus on the long-term probability of winning by participating.”

While market volatility can be nerve-racking for investors, “reacting emotionally and changing long-term investment strategies in response to short-term declines could prove more harmful than helpful,” noted Boinske. “By adhering to a well-thought-out investment plan, ideally agreed upon in advance of periods of volatility, investors may be better able to remain calm during periods of short-term uncertainty.”


According to Nevers, “the less you look at your portfolio, the less you will feel regret and uncertainty caused by daily, weekly or monthly declines in the market. The less you look at your portfolio the less chance you have of making an emotional decision to get out of the market and stop participating,” said Nevers.

#Fortis Wealth #Matt Topley #James Nevers #Soundmark Wealth #10 year Bull market anniversary #Chas Boinske #Independence Advisors #Anthony Glomski #AG Asset Advisory

Monday, February 25, 2019

Don’t Let HNW Clients Trip Over Real Estate Opportunities

A recent Spectrem Group study found that one in four investors with a net worth between $1 million and $5 million said they would invest in real estate. What’s more, our annual Wealth Advisor Confidence Survey™ 2019 found that nearly 90 percent of CPAs and wealth advisors are expecting a stock market correction within 12 months. Not surprisingly, many high net worth (HNW) investors are seeking opportunities outside of equities and fixed income. Several of our clients were interviewed by the national media last week about the do’s and don’ts of investing in real estate. Here are some excerpts:

According to Matt Topley
, Chief Investment Officer of Fortis Wealth (Valley Forge, PA), The most common mistake HNW investors make when it comes to real estate is thinking they can do it themselves. “It is a common behavioral failure of investors to think they can easily understand real estate. In most cases, HNW people earn money due to their expertise in a particular professional field. The trouble occurs when then try to park that money in real estate.  Most of the time they fail due to lack of industry knowledge and inability to execute as a landlord.  It’s not because they aren’t intelligent,” added Topley.

Blake Christian, CPA
  a tax partner of Long Beach, California-based HCVT, LLP said the most common misconception for HNW taxpayers who are new to real estate investing is “believing that the inevitable early year tax losses (associated with depreciation, interest expenses and other costs) will be eligible to offset their other income items such as wages, interest, dividends, etc.” For taxpayers making more than $150,000 a year, Christian said “such losses are generally phased out and then suspended until the time the taxpayer has net profits from other ‘passive’ activities, or at the time the investment is disposed of.  Taxpayers making less than $100,000 can claim up to $25,000 of “passive” real estate losses on an annual basis, noted Christian. “The $25,000 maximum loss is phased-out for Modified Adjusted Gross Income between $100,000 to $150,000 for joint filers,” he added.

Topley’s colleague, Randy Hubschmidt, who oversees Fortis’s real estate fund, said clients tend to get started investing in commercial real estate by investing with a friend or family member that has identified a “Can’t Miss” opportunity. “They tend to underestimate the risk of the transaction and therefore, they are not sufficiently compensated for the risk they are taking. More often than not, HNW people tend to learn the hard way that they would have been better off to have had their money professionally managed--and with much better liquidity and flexibility,” added Hubschmidt.
Experts say another common oversight is taxpayers with profitable real estate have neglected to do a Cost Segregation Study. Christian said such studies “allow property owners to claim shorter depreciable lives (i.e. more annual tax depreciation) on certain components of the building – e.g. hardscape and landscape (15 years), special electrical/ plumbing/ etc. (5-7 years) and other non-structural tenant improvements.  These studies can be performed now and apply retroactively to 2018 tax returns,” added Christian.

Topley said another common error he see is HNW investors settling for public REITs just because “REITs they have a high correlation to the stock market.” As a result, Topley said the investor’s “goal of diversification becomes skewed.” The best option for HNW investors is doing private real estate deals with well qualified operators, Topley said. “This gives them a low correlation to public markets, passive tax efficient income, and most importantly it hands off the process of owning private real estate to the experts who know how to do it,” added Topley.


Also, make sure you clients are getting compensated adequately for the risk and relative lack of liquidity that real estate entails vs. other asset classes. As Fortis’s Hubschmidt pointed out: HNW people tend to look at deals and compare the return on those deals to what they think they could get in the market. “That usually means publicly traded stocks. What these investors underestimate is the premium for illiquidity that they should demand from their real estate investment,” added Hubschmidt.  
We’ll share these and other media hits from HB clients in our end of month newsletter.

#Fortis Wealth #HCVT, #Blake Christian, #Randy Hubschmidt, #Matt Topley
#Commercial real estate  #real estate investment mistakes  #alternative investments

Tuesday, February 05, 2019

Benefits of Boredom (Unless It’s the Super Bowl)

For those of you who managed to stay awake for Sunday’s Big Game, congrats. You either had a lot of money on the line or you’re a glutton for punishment. Not only was it the lowest-scoring NFL championship game in the “LIII-year” history of this overhyped event, it was poorly played, lacking in drama and had mediocre commercials and half-time entertainment to boot. Not surprisingly, it was the lowest-rated Super Bowl in 11 years.
Even Tony Romo, one of the sharpest and most excitable announcers to hit the broadcast booth in years, quipped in the second half: “This is getting hard to watch.”

At least the punters for both teams brought their A-Games.

In sports, as in life, you’re going to have blah days. During one of the many lulls in the action, I picked up a copy of Sunday’s New York Times and stumbled across Pamela Paul’s insightful piece “Let Children Get Bored Again.” Give it a read because the article has plenty of applications for you and your adult clients, too.

*** If you practice feels stuck in a rut, take this
confidential 5-minute survey and you’ll so how your peers are finding ways to break through.

In our hyper-stimulated lives, it’s hard to imagine getting bored when vast stores of information and entertainment are just a click or voice command away. But, you don’t always have to have your nose buried in a digital device the instant you have some downtime at the airport, the DMV, the doctor’s office, the grocery line or at your kid’s soccer practice field.
By constantly trying to distract yourself with digitally, you may be dulling your creative senses. According to Ms. Paul, “boredom teaches you to respond constructively, to make something happen for yourself. But unless we are faced with a steady diet of stultifying boredom, we never learn how.”

You might turn inward and use the time to think, she observed. You might reach for a book. You might imagine your way to a better job. Boredom helps you daydream better. Ultimately she said it leads to self-discipline and resourcefulness.
In fact, research shows 80 percent of people see unlocking creative potential as key to economic growth, but only 25 percent feel that they are living up to their own creative potential. From the employer side, McKinsey research found that a whopping 94 percent of execs are unhappy with the innovative performance of their company. That’s a huge disconnect.

*** But here’s the gurus won’t tell you. You don’t need high-priced consultants or brainstorming facilitators to unlock your creativity and focus.

Try to think about nothing

From personal experience, I can tell you that some of my best marathon running results were achieved when I trained and raced without headphones to distract me. Now I’ve never had much success with yoga or meditation, but it’s remarkable what happens when you try to think about nothing and just listen to your heartbeat and your breathing while on a long run. When you spend the rest of your life constantly racing the clock wishing there were more hours in the day, exercising without digital distractions can make time feel like it’s standing still.

Start thinking about your client obligations, a recent fight with your spouse and the latest stock market volatility and guess what? You’ll start to feel tired. But, when you block out all of day-to-day life’s distractions and just focus on the task as hand—finishing your workout—your mind will start wandering in a more constructive way. You’ll start coming up with new products and services for clients, or a great opening line for your next article or presentation, and you’ll start to feel the energy surge back into your cardiovascular system and brain. Chances are, you’ll finally come up with a great gift idea for the significant other in your life.

As Paul observed, “The ability to handle boredom is correlated with the ability to focus and to self-regulate. Research shows that  people with attention disorders are particularly prone to boredom. It makes sense that in a hyper-stimulating world, what at first seems captivating now feels less so; what was once mildly diverting may now be flat-out dull.”
Learn from bored children

Paul also said we should we should teach the children in our lives to learn to endure boredom rather than “ratcheting up the entertainment.” Why? “Because that will prepare kids for a more realistic future that doesn’t raise false expectations of what work or life is really all about.” She said, even if they land a job they love, they may have to spend an entire day answering a backlog of email, checking the formulas in a massive spreadsheet or filling out expense reports and mundane forms. “Perhaps we should get used to it again, and use it to our benefit. Perhaps in an incessant, up-the-ante world, we could do with a little less excitement,” added Paul, implying that will make them tougher and better-adjusted to the real world of work.
Are you stuck in your business?

*** One thing that’s not boring is the outcome of our annual CPA/Wealth Advisor Confidence Survey. See what the highest performing advisors are doing differently than the rest. Take the confidential 5-minute survey before Friday and we’ll send you the information-packed 12 page summary of findings. Here’s the link

Here’s a hint—they’re getting plenty of media attention (see below):

HB clients in the news


Let’s have a great week. Like the Super Bowl, not every idea you come up with will be a winner, but you can’t break through to the next level unless you get into the game and try to make some plays.

#wealth advisor confidence  #fighting boredom #creativity #ideation  #Tony Romo  #Super Bowl disappointment

Saturday, January 19, 2019

HB tells LA media what’s got advisors juiced (and worried) in 2019

Thanks to our friends at the Long Beach Business Journal for including me in their Economic Forecast 2019 special section. The gist of my comments to business owners, based on findings from our annual Wealth Advisor Confidence Survey conducted in conjunction with The Financial Awareness Foundation, was that “The easy money has been made. Now you need an expert to help you.”

We’re keeping our confidential (5 minute) online survey open for another week. Here’s the link

Give us 5 minutes of your time and we’ll rush you a 12-page pre-publication copy of the report. See how you stack up to your peers in terms of opportunities, challenges and growth prospects.

Enjoy the weekend. Best, HB

#wealth advisor confidence, #CPA confidence, #2019 market climate #Long Beach Business Journal

Wednesday, January 09, 2019

Advisors remain optimistic about their growth prospects despite multiple headwinds in 2019

Initial findings from our 2019 Wealth Advisor Confidence Surveyindicate that independent wealth advisors remain confident about their growth prospects despite significant headwinds across the economic, political, tax and investment landscape.

Our confidential online survey will be open for another week or so if you’d like to see how you stack up to your peers in terms of growth prospects, service offerings, client communication channels used and factors keeping independent advisors (and their clients) up at night. Give us 5 minutes of your time and we’ll rush you a 12-page pre-publication copy of the report. Here’s a link to the survey

Here’s a sneak preview of the findings:

As was the case in 2018, nearly half of advisors (48%) expect their firms to grow by double digits in 2019 and five out of six respondents (85.4%) expect to grow at some level in 2019, (up from 82.4% in 2018). The survey, being conducted by The Financial Awareness Foundation in association with HB Publishing & Marketing Company, LLC finds that most advisors (95.9%) expect at least one more stock market correction of greater than 10‐percent in 2019, (up from 82.3% at this time a year ago). Further, three in five respondents (59.5%) say a recession is “somewhat” or “very” likely to occur within the next 12 months. That’s nearly twice as many who feared a recession (32.9%) at this time a year ago.

The survey will be open for another week or so. Please share the survey with a qualified colleague
Again, it takes just 5 minutes to complete the survey and we’ll be happy to rush your colleague a pre-publication copy of the findings.

Thank you for your cooperation. Best, HB and Val
Hank Berkowitz, MBA, MA,

Principal, HB Publishing & Marketing Company LLC
Valentino Sabuco, CFP®
Executive Director & Publisher, The Financial Awareness Foundation

Thursday, December 13, 2018

Fastest-Growing Advisors Contact Clients More Frequently

New research from The Financial Awareness Foundation’s (TFAF’s) Wealth Advisor Confidence Survey™ confirms that it pays to reach out and touch people. According to TFAF, higher performing advisors are more likely than other advisors to contact clients more than once per month. For example, nearly three in five firms (58%) expecting double-digit growth in 2019 contacted clients 2 or more times per month. By contrast just under half of firms (49%) expecting single digit growth in 2019, contacted clients more than once per month.

Is that too often? Not if what you’re sending is relevant, valuable and professionally produced.
As shown below, firms that contact clients with higher frequency have the ability to produce thoughtful content that requires a little more thought than a simple tweet, post or like:

            Communication Channels Rated “Very” or “Highly” Effective

Contact Clients
1x or less
per month
Contact Clients
2x or more
per month
Public speaking
Writing articles for publication
Writing books/eBooks
Get quoted in the press
Publishing articles via LinkedIn
Sources: The Financial Awareness Foundation; HB Publishing & Marketing Company, LLC, 2018

As shown below, firms that contact clients with higher frequency are also more likely to find value in social media—but not at the same level as more conventional thought leadership tactics cited above.

Social Media Channels Rated “Very” or “Highly” Effective

Contact Clients
1x or less
per month
Contact Clients
2x or more
per month
Instagram, Snapchat
Sources: The Financial Awareness Foundation; HB Publishing & Marketing Company, LLC, 2018

The findings are even more striking when looking at the projected financial performance of responding advisors. Firms that expected to finish 2018 with double-digit growth were 1.5 times more likely than less optimistic firms to consider Public Speaking, Publishing Articles and Media Coverage “very” or “extremely” useful (see chart).

annual survey of financial advisor concerns and challenges, conducted in association with HB Publishing & Marketing Company, LLC. asked respondents to rate nearly two-dozen thought leadership tactics. Those in the table above were the ones most frequently cited by advisors as being “very” or “extremely” valuable.


We may live in an instant gratification society, but when it comes to resonating with clients, prospects and influencers, research shows you’ll have to hit the neural gym and do some mental heavy lifting. There are no shortcuts, but it doesn’t have to be drudgery. We’re happy to
talk to you any time if you’d like some suggested workouts for maximizing your thought leadership gains when you have limited time. You might even find those exercises fun.

There’s much more to this survey.  Check out some of the other highlights here.

#Content marketing, #thought leadership, #wealth advisors, #The Financial Awareness Foundation, #Wealth Advisor Confidence Survey