In an article for ThinkAdvisor, John Manganaro shares some concerning research that shows most advisors are not preparing for succession planning and that it poses a significant threat to the industry. It’s also commonly cited as a risk by the leaders of various advisories as there are forecasts of a massive wave of retirements by advisors over the next decade.

Many are incorrectly assuming that they will be able to gracefully exit the business and hand over their clients to the next generation. Yet, this is easier said than done since it assumes that the incoming advisor will have the talent and ability to serve clients and help them reach their financial goals. 

There are additional challenges such as many clients may not be comfortable with younger or newer advisors and elect to go elsewhere. Often, relationships between the retiring advisor and the newer one can fray over questions about leadership, compensation, and the financial structure of the new arrangement. 

It’s ironic because advisors intuitively believe in long-term planning to help their clients reach their goals. Yet, many are not doing the same for their practices.

Finsum: Financial advisors need to embrace long-term planning to ensure a successful exit with the same diligence that they help their clients build a plan to reach their financial goals.

Volatility’s not your game? You’re sure now?

Well then, to tamp down volatility in a portfolio – or generate steady income -- fixed income assets are popular alternatives to dividend stocks, according to money-usnews.com. And the assets pay out a defined stream of income.

It typically assumes the form of bonds, which, essentially, are IOUs investors can reach into their wallet for from a number of sources, like, for example, governments and corporations.

That said, bond investing isn’t as easy as one-two-….you get the ides. Instead, since individual bonds are traded over the counter and mucho calculation is required to price correctly, it can be complex.

"Given the higher risks and costs associated with portfolios of individual bonds, and the time they take to manage, most investors are better served by low-cost mutual funds and exchange-traded funds, or ETFs," said Chris Tidmore, senior manager at Vanguard's Investment Advisory Research Center in Wayne, Pennsylvania. "This is particularly true in the case of municipal and corporate bonds, which are less liquid and harder to purchase than Treasury bonds."

Meantime, this for U.S. investors in exchange traded funds: you might want to mull over taking the splash into medium-term fixed income ETFs. according to marketwatch.com. Why, you might ask? They could not only dispense “attractive carry,” they also could translate into a “buffer” against the volatile returns in the U.S. equity market. That’s in light of the fact that the Fed’s path toward interest rate hiking’s immersed in a lack of clarity, Gargi Chaudhuri, BlackRock’s head of iShares investment strategy for the Americas, said.

Follow the leader?

Thing is, whether due to, for example, the pending retirement of its founder and current CEO or spurred by growth targets that have fallen short, your investment advisory firm needs fresh executive leadership, according to selectadvisorinstitute.com.

One of a number of questions you should ask yourself: should the new leader currently be a member of your firm or not?

Prior to arriving at a decision, bear in mind:

Three reasons to hire from the outside:

• Internal employees may lack the leadership ability
• It’s time for a shakeup
• Removing top talent from the competition

Three reasons to promote from within 

• Save time, not to mention, money
• Your firm’s already on the right track
• Retention and morale

The need for new talent in commodity management’s made all the more important to move off the back burner considering financial advisors managing assets valued at trillions of dollars are preparing to head into retirement, according to financial-planning.com.

Yet, it’s not an easy road for those breaking into the industry, reported Cerulli Associates. In 2022, more than 72% of early career "rookie" advisors didn’t break through and left the profession in the rearview mirror.

In an article for USNews, Tony Dong covers the opportunity for investors in high-yield fixed income and equity ETFs. Currently, investors can lock in risk-free yields above 5% due to rates being at their highest level in decades. 

However, these short-term rates are not likely to linger at these levels for a long period of time due to inflation peaking and now starting to roll over as well as increasing risk of a recession. Although there is divided opinion on which outcome will prevail, the reality is that either scenario will result in lower rates and yields. 

For investors who don’t believe that a recession will materialize, they should be salivating at the prospect of buying a high-yield fixed income or equity ETF to lock in these yields. These ETFs offer higher yields than Treasuries, but they also offer the potential for appreciation if economic growth surprises to the upside. 

For instance, the Invesco Fundamental High Yield Corporate Bond ETF is a diversified basket of high-yield, corporate bonds. These are riskier than investment-grade bonds but less so than equities. Currently, it pays a yield of 6.7% with an expense ratio of 0.5%. 

Finsum: Investors should consider taking advantage of the highest rates seen in decades through high-yield ETFs. 

At the Aspen Ideas Festival, Blackrock CEO Larry Fink surprised many when he said that he will no longer use the term ‘ESG’ because it had been misappropriated by the far left and the far right. Of course, Blackrock and Fink have been one of the leading proponents of the movement and used their station as one of the world’s largest asset managers to push corporations to consider these factors when making decisions. 

Now, many conservatives are pushing back and want to end the consideration of ESG factors when making investment decisions. At the state level, legislation has already been passed in many red states to ban ESG investing by state funds. Florida actually pulled $2 billion out of Blackrock funds to protest its ESG stance. 

Fink’s verbal retreat is an acknowledgement of these forces, but it’s uncertain whether this is simply a rhetorical change or a change in behavior. Previously, Fink has spoken passionately about the risks that climate change poses to companies and the importance of governance and diversity at the highest levels. He believes that long-term financial results are enhanced by considering these factors in decision-making by executives. 

Finsum: Blackrock CEO Larry Fink is one of the original and most passionate believers in ESG investing. However due to recent political blowback, he has said that he will stop using the term.