FINANCIAL ADVISOR INSIGHTS: Vanguard — Clients Need Their Advisors To Act As Behavioral Coaches Advertisement
 FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. Advisors Need To Act As Behavioral Coaches To Clients (Vanguard) At a time when investors are still anxious about the Fed tapering its stimulative $85 billion monthly asset purchase program, Vanguard recommends a few key things advisors should consider. In this uncertain environment Chuck Thomas, at Vanguard thinks advisors should act as "kind of a behavioral coach for investors," and prevent investors from being distracted by all the noise. "There’s a lot going on in the world, and investors can be distracted sometimes by the headlines. So we really encourage advisors to get ahead of that and focus the conversation on things that they and their clients can really control. And that’s broad diversification, owning a good mix of markets across the world, having a good mix of both equities and fixed income, and focusing on the long-term." The Not-So-Great Rotation Out Of Stocks (Morgan Stanley) Pension funds arguably helped give rise to the "equity cult." Pension funds took a hit during the crisis but have been recovering during this bull market. As many approach fully-funded status, Morgan Stanley thinks "the de-risking flow should drive an asset allocation shift from equities to long duration bonds." 
It's Important To Teach Financial Literacy To College Students (The Wall Street Journal) College students understand the importance of financial literacy but don't have a good understanding of it, John Caserta of Connecticut-based Caserta & Company writes in a new Wall Street Journal column. "We all see older clients whose financial "plans" aren't much more than an accumulation of products and vehicles. They've compartmentalized their finances so much that they can't really see how it all works together. It's important to help young people start to develop that sense of the big picture; to give them financial know-how now so they aren't scrambling to make sense of it all at retirement." You're Not Listening To Robert Shiller If His CAPE Ratio Has You Scared Of Stocks (Business Insider) If Robert Shiller's cyclically-adjusted price-earnings (CAPE) ratio is over the long term average of 16x, the stock market is argued to be expensive. But Shiller thinks investors shouldn't try and time crashes based on the CAPE ratio, that it is in fact more helpful in forecasting longer term results. "I think the bottom line that we were giving – and maybe we didn’t stress or emphasize it enough – was that it’s continual," Shiller told Business Insider. "It’s not a timing mechanism, it doesn’t tell you – and I had the same mistake in my mind, to some extent — wait until it goes all the way down to a P/E of 7, or something." "But actually, the lesson there is that if you combine that with a good market diversification algorithm, the important thing is that you never get completely in or completely out of stocks. The lower CAPE is, as it gradually gets lower, you gradually move more and more in. So taking that lesson now, CAPE is high, but it’s not super high. I think it looks like stocks should be a substantial part of a portfolio." Three Game Changing Trends That Are Coming To The Financial Services Industry (Advisor Perspectives) There are three big changes coming to the financial services industry, writes Steve Lockshin, founder and chairman of Convergent Wealth Advisors in Advisor Perspectives. 1. "Separation of value services from commodity services." Commodity services in the financial industry include guidance on things like asset allocation, while value services are more uncommon. "The best advisors – the top decile – deliver an enormous amount of value when they provide un-conflicted and customized guidance and information about complex financial planning, taxes and estate-planning situations."
2. "A focus on un-conflicted advice from capable fiduciaries." The industry is already seeing a change from the brokerage model to the independent registered investment advisors (RIAs). 3. "Partner firms that empower consumers will emerge." | 
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