Efficient Advisors

Can you use AI to create a financial plan? ? Coryanne Hicks, a writer who worked in the financial industry, ran a test. She asked both ChatGPT and a human advisor to come up with a plan, then she compared the results. ? "If this were a speed test, ChatGPT would win," writes Hicks. "It took only a few seconds to walk me through the math for calculating a nest egg." ? But the AI's information wasn't completely accurate. And the AI-bot-as-advisor had another glaring deficiency. It didn't know how to do any analysis that didn't involve numbers. By contrast, Hicks's human advisor spent hours learning about her and exploring the what-ifs. ? "The problem with using A.I. for financial guidance is that ChatGPT doesn’t know how to ask all the questions. And even if it can give you a big number to save, it won’t be able to tell you if you should be saving in a pre-tax or after-tax retirement account or how to invest it." ? Read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

When people retire they are faced with big financial decisions. Unfortunately, these are often made under pressure, with time constraints, and in a state of confusion. ? Joseph DiSalvo, ChFC, and Marie Madarasz, AIF, authors of "Income for Life, The Retiree's Guide to Creating Income from Savings," write, "This is a significant life change, and over half of pre-retirees have never done a simple retirement income calculation, let alone understand how best to structure their investments for retirement income." ? To help retirees better visualize what their money needs to do, DiSalvo and Madarasz recommend using a Bucket Plan. Essentially, it maps a retiree's nest egg to the income they will need in the future: ? Bucket 1 includes everything you need in the very short term. Bucket 2 includes everything you will need over the next 5 years. Bucket 3 is your remaining portfolio balance and will be invested for growth. ? For a real life example of how this works, read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

It's not surprising that the majority of Americans are financially illiterate. ? Surveys have shown that 57% of adults do not understand the basic concepts of compounding returns, inflation, and risk. And this has been identified as a major factor in the huge increase in household debt and lack of retirement savings. ? But it wasn't always this way. According to Vox, up until the late 1950s, American high school students were regularly taught about personal money management. ? What caused educators to abandon this topic? Surprisingly, it was the space race. The newly formed Department of Education insisted that students be taught more math, science, and foreign languages in order to keep up with the skills of young people in communist countries. ? To enable this new focus, something had to go. And so classes on personal finance and home management were cut. ? To get all the details on this issue, watch Vox's six minute video. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

Which statement is more likely to get you an appointment with a prospective client? "I can give you my opinion about your portfolio." Or "Let's run a standardized diagnostic to see if you're paying too much." ? People don't want to take time out of their busy schedules to be sold to. But if you can promise them something that will save them a lot of money, they are happy to pencil you in. ? To help advisors demonstrate their objective value to prospective clients, we've created the Evidence Based Diagnostic Report, an objective analysis designed to give prospects greater clarity about their mix of investments compared to benchmarks. (Other areas of focus are risk, return, and probability.) ? The report enables advisors to show prospects their opportunities for improvement through a recommended portfolio constructed with these core principles in mind. And when you can clearly demonstrate your better value, they'll naturally choose to work with you. ? One of the advantages of working with Efficient Advisors is access to our proprietary Evidence Based Diagnostic Report platform, which automates both the assessment and the presentation that is tailored to our investment philosophy. ? Reach out to us in the comments below and we'll be happy to run an EBDR on your behalf and answer any questions you may have. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

Parents who are helping their adult children, financially spend an average of $1,384 a month. ? This is according to a report by Savings.com, which found that nearly half (47%) of parents with a child older than 18 provide them with at least some financial support. ? Yet by other measures, young adults are doing well. ? Compared with their parents at the same age, Gen Zers are more likely to have a college degree and work full time. This is particularly true of women, who are not only achieving increasing levels of education, but also earning more.?? ? But, according to the report, 61% of adult children still living at home don’t contribute to household expenses at all. ? It's not surprising, then, that 58% of parents said they have sacrificed their own financial security for the sake of their adult children. ? Read the full article for more details. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

Not everybody needs a financial advisor. ? Wealth manager Ben Carlson says he's met hundreds of people who've educated themselves, devised a plan, and have been able to follow it. ? However, he's also found that the majority of people do not have the time, skills, or inclination to do this. They will do better financially and emotionally if they can get professional help. ? In his article aimed at investors who are wondering if they should get assistance, Carlson lists seven life events that can trigger a search for an advisor: ? ·??????You have a big life event. ·??????Your financial situation is getting more complex. ·??????You don’t have the time or inclination. ·??????You’re worried about key person risk. ·??????You’ve made a big mistake. ·??????You’re faced with a big financial decision. ? "The best financial advisors don’t just tell you what to do," says Carlson, "they give you a better decision-making framework to make good choices over and over again." ? Read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

Historically, when the yield on the 10-year note falls below the yield on the 2-year note (i.e. when the “2s10s” yield curve inverts), recessions have been soon to follow. ? However, two years ago, the 2s10s yield curve inverted. This emboldened economists who were warning of an impending recession. But we’re still waiting for that recession. ? According to a Goldman Sachs analysis of 2s10s inversions since 1965, seven to 49 months passed before recessions occurred, with a median of 20 months. ? Sam Ro, CFA and financial author, noted that if the economy could go into recession a week, a month, or a year from now, it would arguably confirm the inverted yield curve’s signal. ? But this big lag in the predicted event makes it a less than useful warning. ? As Howard Marks says, "Being too far ahead of your time is indistinguishable from being wrong." ? Read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

When you're in a remote meeting with clients, is it OK for them to see you take a sip from a coffee mug? What about attending the meeting with your camera off? ? YouGov.com took a survey to find out what Americans think are acceptable behaviors during remote meetings. They asked people in various age groups to identify behaviors as "Acceptable in any meeting," "Only acceptable in informal meetings," or "Not acceptable in any meeting." ? While clear majorities of all groups reject some behaviors (like having a TV on in the background), other meeting actions exist in a gray area (such as having other people in the room). ? And there are big age divides: Americans 65 and older are less likely than younger adults to accept each of the 22 meeting behaviors they were polled about. ? For example, when it comes to eating a snack during a meeting, just 24% of those under 30 found this unacceptable. While 57% of those over 65 said it was unacceptable. ? Read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

When people are asked what type of setting they'd most like to live in, the largest percentage say rural. ? But research on people's actual satisfaction with where they live, has borne out a different ideal: the walkable neighborhood.? ? Studies have found that living in walkable neighborhoods, spending less time driving and commuting, and having access to coffee shops and parks are associated with better well-being and social connectedness. And for a neighborhood to support mass transit and amenities like local shops and restaurants, it needs a certain amount of density. ? Additionally, the Happy Cities study found no significant correlation between the type of housing someone lives in and their wellbeing. People are just as likely to be happy in single-family homes, townhomes, and apartment towers. ? These are all good things for pre-retirees to think about as they plan where they'd like to live. ? Read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors

Millennial investors are much more likely to embrace the latest technology in building financial security and saving for retirement. ? But while they see the value of AI-powered tools, they value human advice even more. ? This is according to the recent Investopedia Affluent Millennials Survey, which sheds more light on essential aspects of the wealthier part of this demographic’s attitudes toward finance and technology. ? Millennials (65%) report having a greater trust in financial advisors than Gen Xers (58%). While media portrayals might lead some to believe they are likely to get investment ideas from random TikTok performers, millennials demonstrate savvy in this area, with far fewer saying they would trust videos (27%) than advisors and other experts for financial advice. ? And millennials who consider themselves knowledgeable about investing are twice as likely to have a financial advisor. ? To see all the findings, read the full article. The link is in the comments. ? #financialadvisors #financialservices #financialplanning #evidencebasedinvesting #efficientadvisors