INVESTED IN ADVISORS | APRIL 2021 Small custodians, big business After the Schwab-TD merger, rival rms are reaching for new business opportunities. Is David sprinting past Goliath? FINANCIAL-PLANNING.COM / @FINPLAN CV1_FP0421_2.indd 1 3/15/21 9:57 AM — BENJAMIN SAX Partner — JENNIE SOWERS Partner KORE Private Wealth CREATE a new standard of excellence Before the partners of KORE Private Wealth opened their doors in 2018, they shared a vision to create a premium destination for ultra-high-net-worth clients by taking a multi-generational approach to wealth management. Today, the team continues that mission with a commitment to create deeper client relationships by providing advice that is both sophisticated and mindful. Watch their story and learn how Fidelity helps firms grow and evolve their businesses and better serve their clients. Visit go.fidelity.com/taketheleap or call 800.735.3756. Transform for the future with Fidelity. KORE Private Wealth is a client of Fidelity Institutional℠ and is an independent company unaffiliated with Fidelity Investments. Its business model’s needs and results may not reflect the experience of other Fidelity clients and are not indicative of future success. Fidelity Institutional℠ provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC. © 2021 FMR LLC. All rights reserved. 911064.2.0 42073-07-AD-KORE-FinPlanning.inddFP0421.indd 2 1 3/16/20213/15/21 3:07:02 3:58 PM Contents 28 On SPACs, 22 GameStop Small cusodians, and crypto: big business Q&A with After the Schwab-TD merger, rival firms Apex’s are reaching for new business opportunities. Is David sprinting past Goliath? Tricia BY JESSICA MATHEWS Rothschild After going public, the clearing firm plans to to grow and nudge further into the traditional advisory space, says its president. BY JESSICA MATHEWS Columns 7 5 lessons learned in 2020 The game changed, and there’s a lot we have learned that can potentially skyrocket our success through 2021. BY CHIP MUNN 8 Advisors’ worst career errors Arrogance, naiveté and procrastination can all undermine best-laid advancement plans. BY MARK ELZWEIG Industry News 10 The retail investor wave: An inside look More than one-third of U.S. brokerage clients opened their first accounts in 2020, according to new research. BY TOBIAS SALINGER 12 Alternative investment fintechs soar New entrants are gaining traction while established players continue to grow. BY RYAN W. NEAL Financial-Planning.com April 2021 Financial Planning 1 001_FP0421 1 3/15/2021 4:03:16 PM Contents Financial-Planning.com 1 STATE STREET PLAZA, 27TH FLOOR NEW YORK, NY 10004-1505 • (212) 803-8200 14 32 EDITOR-IN-CHIEF Chana R. Schoenberger 14 33 MANAGING EDITOR Grandma wins case against How to avoid legal trouble when Andrew Welsch J.P. Morgan and grandsons switching firms Beverley Schottenstein accused the bank and It’s complicated, but possible, for financial ASSOCIATE MANAGING EDITOR brokers of unauthorized trading, among other advisors to limit risk and liability while Andrew Shilling alleged misconduct. moving their practices. TECHNOLOGY EDITOR BY LYNNLEY BROWNING BY MARK KOWALSKY Ryan W. Neal 16 SENIOR EDITOR Big firms likely to benefit from SEC ad Client Tobias Salinger rule update Those with the resources to sort through 35 REPORTER compliance thickets may be better positioned A second look at the 4% rule Lynnley Browning for the long-awaited changes. Based on their stage, each client has different long-term needs. ASSOCIATE EDITOR BY KENNETH CORBIN Jessica Mathews BY VIJAY KHETARPAL 18 COLUMNISTS Morgan Stanley, RBC tangle over Lazetta Braxton, Allan Boomer, Kimberly Foss $600M of client assets Portfolio The dispute highlights the complex nature 36 CONTRIBUTING WRITERS of non-solicitation carve-outs when advisors Chinese firms — delisted Kenneth Corbin, Alan J. Foxman, Jeffrey Levine, switch firms. U.S. exchanges may end trading in shares of Michael Kitces, Donald Jay Korn, Allan S. Roth, BY ANDREW WELSCH certain China-based companies. Here’s what Chip Munn this may mean for your clients. 20 COPY EDITORS Betterment buys Canadian robo’s U.S. BY EARL CARR Dina Hampton, Rebecca Stropoli book of business 38 The first deal under CEO Sarah Levy will net It’s time to revisit the IRA trust. Here’s EXECUTIVE DIRECTOR, BRAND STUDIO the firm 17,000 accounts and $190 million in why Michael Chu client assets. All trusts named as beneficiaries before the DESIGNER BY RYAN W. NEAL Secure Act may need to be updated, says Meen Choi one analyst. Practice BY DONALD JAY KORN SALES MANAGER Kris Kadel (212) 803-8472 30 Social Security tips for women Upfront & more NATIONAL SALES MANAGER, CONFERENCES AND EVENTS Planning needs and strategies should focus Stacy Gellman (212) 803-8841 on longevity and creating lifetime income Retirement Advisor SENIOR MARKETING MANAGER streams after a spouse has died. 5 Confidence Index Jamie Billington (212) 803-6099 BY SOPHIA DUFFY 40 CE Quiz 32 How the pandemic has changed us Career mobility and heightened client dependence are two unexpected byproducts of extreme uncertainty. CHIEF EXECUTIVE OFFICER...........................Gemma Postlethwaite BY JODI L. PERRY CHIEF FINANCIAL OFFICER ............................................Debra Mason CHIEF STRATEGY OFFICER ............................................... 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POSTMASTER: Send address changes to Financial Planning, Arizent, One State Street Plaza, New York, NY 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. Financial Planning is a trademark used herein under license. Copying for other than personal use or internal use is prohibited without express written permission of the publisher. ©2021 Arizent and Financial Planning. All rights reserved. 2 Financial Planning April 2021 002_FP0421 2 3/15/2021 2:24:31 PM THE RICHARDS GROUP TRG JOB #: SAS21_061506_Proof Points 2021 Print CLIENT: Schwab Advisor Services JOB NAME: Proof Points MaryJane - Here’s Why PUB: Financial Planning TRIM: 7.875 x 10.5 LIVE: .25 all sides BLEED: 8.125 x 10.75 INSERTION DATE: April 2021 COLOR: 4/C SWOP/133LS FOR QUESTIONS CALL: Kathleen Pendergast 214.891.2918 Independence is freedom and opportunity. Here’s Why. “Independence has allowed us to grow in so many ways. Schwab inspires us to do so much more, like setting our goal to double in size in three years.” MaryJane LeCroy Wealth & Pension Services Group Learn more at advisorservices.schwab.com or call 877-687-4085 Results may not be representative of your experience. Wealth & Pension Services Group is not owned by or affiliated with Schwab, and its personnel are not employees or agents of Schwab. This is not a referral to, endorsement or recommendation of, or testimonial for the advisor with respect to its investment advisory or other services. Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Schwab. Independent investment advisors are not owned by, affiliated with, or supervised by Schwab. ©2021 Schwab Advisor Services.™ All rights reserved. Member SIPC. (0720-09ZS) ADP111893-00 / 00249057 FP0421.indd 3 3/16/2021 3:07:03 PM SAS21_061506_MaryJane_PP_FP_7_875x10_5_April.indd 1 3/1/21 4:46 PM GO FROM Financial Advisor TO Retirement Hero You don’t need a cape to be your clients’ #RetirementHero ADP is transforming the way people save for retirement by providing your clients with access to the tools and resources they need to help their employees become retirement ready. Like our ADP mobile app, which makes it easy to enroll, manage, and track progress — anytime, anywhere. DESIGN A RETIREMENT PLAN THAT UNLEASHES YOUR INNER SUPERHERO. www.adp.com ■ 844-ADP-ELITE For its retirement plan recordkeeping customers, ADP agrees to act as a nondiscretionary recordkeeper performing ministerial functions at the direction of the plan sponsor and/or plan administrator. ADP, the ADP logo and Always Designing for People are trademarks of ADP, LLC. All other trademarks and service marks are the property of their respective owners. 99-5376-D-ADV03-0520 ADPBD20190225-0655 Copyright © 2019-2020 ADP, LLC. All Rights Reserved. FP0421.indd 4 3/16/2021 3:07:03 PM 99-5376-D-ADV03-0520_v1_RH_Ad_Advisor_man-wbeard_7.875x10.5.indd 1 5/7/2020 10:56:17 AM Benchmark DATABASED INSIGHT FROM FINANCIAL PLANNING AND ARIZENT RESEARCH Retirement Advisor Confidence Index Retirement confidence slides ... slightly Clients are happy to have the