As we’ve seen over the past few years, the values of a firm and its leaders can no longer be a secret. Or separate. They are intertwined with the firm’s brand. And while scary, that can be a good thing.

We see many advisory firms weaving their values into the fabric of how they do what they do. The leaders of these firms are shaping the culture they themselves want to be part of. And the best thing? They’re not alone. Potential hires — even prospective clients — often end up thinking: “Hey, I want to be part of that.” What your firm stands for, the kind of social capital you bank, matters more than ever — especially with the next generation of hires and clients.

There are many ways to build this social capital. One big way is to focus on inclusivity — supporting paths for all types of colleagues and clients, and deliberately structuring the policies and programs that make those paths real. Here’s how some firms are doing just that.

Working for all kinds of families

For Jill Hollander, CFP®, managing partner, Financial Connections Group, Inc., what inclusivity looks like is a firm that serves all kinds of families, no matter what form they take. The Bay-Area team at Financial Connections Group applies their expertise to help clients in non-traditional families, supporting them however they define their family and the kinds of financial relationships they want to have.

As Jill says: “It’s our role to respect someone else’s values and goals, and to help them achieve them.” The firm is known for their focus on LGBTQ families, unmarried couples, singles, and other non-traditional families. And the team enjoys the challenge of protecting these clients, pointing them to other services (such as legal help) as needed. For example, they’ve worked on a financial plan for two people who are not a couple — technically, they’re legal strangers — but who want to split their combined assets down the middle.

“People shape their own family, and we’re there to support them. The most important thing is that we’re open and accepting, and not questioning what they consider to be their own values,” Jill says.

Jill kept telling me she wasn’t doing anything special in her firm. But she is.

Opening opportunities for women

At Abacus Wealth Partners in California and Philadelphia, a major way in which inclusivity is expressed is in how the firm creates opportunities for women. After careful internal planning, they launched what has become a very active “Abacus Sisterhood” earlier this year with the aim of bringing more women into financial planning. The program brings in successful women for panel conversations and hosts regular conversational circles where women can come and just talk — whether they are employees, clients, or other advisors. I’ve been lucky enough to speak on a panel with them and am excited to see how much progress they’ve made — amazing what happens once you make an intentional commitment.

J.D. Bruce, president at Abacus, says that the program, along with the policies that go hand-in-hand with it, has been attractive to potential hires. One associate applied for a job because she read an Abacus blog post announcing a change in parental leave policy from 3 months to 6 months. That particular policy change led many women already on staff to find J.D. and tell him how touched they were that the firm instituted this change. “Even if it wasn’t going to benefit them personally, they were excited and glad to see it being done,” he says.

It’s no wonder that today 50% of Abacus advisors are women. But if you know them like I do, you know they’re not stopping there. The next inclusion initiative at Abacus, focused on racial diversity, is about to launch in some pretty powerful ways —with study groups, internships, and partnerships with minority colleges. Stay tuned.

So go ahead, put the human in your human capital strategy

In this season of sharing cheer and good will, spend some time networking with your associates, clients and peers. And some people you wouldn’t normally talk to, because they aren’t in your normal circles. Ask them about how more inclusion could help them. And keep these examples in mind. Your team, the team you want to build, and the clients you’d like to attract…they’ll all notice.

You will, too. Because feeling good about where and how we work is a great way to stay motivated and energized. As Jill Hollander tells me: “I have fun every day.” What a great thing to strive for in 2019.

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.

That’s why I was so excited about the Financial Planner Reentry Initiative we started as part of the CFP Board’s Center for Financial Planning. As part of the Women’s Initiative, we teamed up with the career reentry firm iRelaunch, in 2017. The aim of this inspired program? Connect advisory firms with experienced professionals who had taken a break from the work force, whether for family care or other reasons, and are ready to re-start their careers.

To me, this is pretty inspired thinking, understanding that a previously interrupted career doesn’t equal a lack of desire or ability to be in the game. Instead, behind that gap on the resume could be someone who’ll make a lasting contribution.

The Financial Planner Reentry Initiative gives these candidates a path back in by helping firms establish internships for returning professionals — a good way to screen talent and increase the number of mid- to senior-level professionals on board.

Not only does this build out an underused talent pipeline, but the program can also increase diversity, since a majority of those who’ve taken a break from a traditional profession are women.

This gets right at my favorite topic: building a more sustainable financial planning industry. So, I want to tell you two stories about how amazingly well it’s working, with a firm we sponsored, and one sponsored by some west-coast custodian (more on that later).

From “feels like an experiment” to “I’ll fight for this”

As her firm re-shapes itself for the future, Jigi Dahagam, senior manager of talent acquisition for Edelman Financial Services says, “This program is one I will fight for.”

Edelman Financial Services was one of the first firms to participate in the Initiative, signing up because they recognize the need for more diversity in the industry.

However, the hiring managers Jigi approached had an understandable reaction: “You want me to spend my time and energy on something that feels like an experiment?” Jigi’s answer? “Absolutely. It’s a great way to see what kind of talent is out there.”

With the initiative’s support, the firm placed two interns, one in client services and one in operations. Both had pervious financial services experience; both had taken a break for childcare reasons.

“The internship was an opportunity for the interns to see what the roles are really like. By no means was it: ‘This is what your path should be,'” Jigi says.

Now one of those interns is a full-time employee. As a client services administrative assistant, she greets clients, preps files, handles clerical responsibilities that help the business run. And she’s studying for her licenses to prepare for taking the next step in her career at Edelman Financial Services.

The other intern realized it wasn’t quite time for her to return to working full time — also something valuable to learn. But she and the firm remain in contact… and she’s definitely on the radar for future positions.

The impact of the program? When it was time to think about participating again, those initially skeptical hiring managers said, “Yes! We’re in.” Impressed by the caliber of candidates, they want more.

Jigi summed it up for me by saying, “Not only did we find a talent pool we weren’t tapped into before, but the program is a wonderful way to work toward the greater good.”

“We just can’t imagine you not being here” 

The team at Yeske Buie is relatively small — 15 people — and quite young. All but two of their CFP professionals are under 31.

This meant there was a distinct benefit for the firm when they, too, signed up for the Financial Planner Reentry Initiative. They found not just a valuable colleague; they also found a mentor.

Lauren Mireles, organization and methods manager at Yeske Buie, describes their “re-intern” (as the firm calls it) as someone who brought experience and maturity to the role. She came with a background in engineering, strategic planning, and business consulting plus an MBA in finance. And she’s passionate about helping people navigate through the financial aspects of life’s sometimes unexpected transitions. Because she’s gone through her own.

While Yeske Buie has a strong college intern program, they saw a difference with this intern.

“She thinks about things from a more mature angle and asks different questions than you’d see from college interns,” Lauren said. For example, when scanning docs as a project to fill some down time, they might have heard from someone younger, “I can’t tell what kind of document this is.” Instead, it was, “Would you like me to include the premium amount in the title of this insurance policy doc?” This may initially seem like a minor observation, but this type of contextual thinking expanded to other areas of focus really made a difference.

Lauren acknowledges that most returning professionals will be older and possibly have been out of the tech realm for a bit. “So, sometimes getting up to speed means investing a bit more time during the training phase,” she said. “But if in the end the work is perfect, I prefer to wait a little longer.”

The firm is thrilled that – no surprise – their intern is now a full-time employee. Because they couldn’t imagine her not being part of the team.

In the first three months, she sat in on 24 client meetings. Now she’s enrolled in a CFP Board program, starting classes to get her license, and has her own clients (under supervision of senior planners). In many ways she’s already almost like one of Yeske Buie’s Assistant Financial Planners, and she’s expected to grow into that.

Competitors and cohorts

Impressed yet? I sure was. The Center for Financial Planning, the sponsors (including TD Ameritrade and that other custodian ;)) and the initial six firms met regularly, with the Center providing structure, resources, and the chance for the participants to share their experiences and ideas.

That’s the best part. By all of us sharing our ideas around recruiting and training these reentry professionals, we’re positioning financial advisors in a positive way. And we’re learning best practices to take these programs to our clients. I’m such a fan of the support and sharing among these firms who are technically competitors. It’s exactly what we need to move our industry forward. Oh, and that west coast custodian?  Schwab.  Yes, we compete.  And we collaborate – because bringing more advisors into this profession to help more Americans get the financial advice they need is that big.

Go here to find out more about the Financial Planner Reentry Initiative. And share what you think with me on Twitter @KateHealy_TDA – use #RIANextGen to join the conversation.

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.

Every market cycle is different. Every bull market ends for different reasons – technology stocks imploding in 2000 and the housing market collapse in 2008 are the two most recent examples. But, despite the differences in how market cycles play out, there tend to be common characteristics visible as the economy transitions from a long growth phase to potential contraction.

Taking a midyear outlook, here are a few things to keep an eye on:

1. The yield curve: On June 13, the Fed raised the fed funds rate by 25 basis points, to a range between 1.75% and 2%. They also indicated that two more rate hikes could be expected in 2018. After the decision, the spread between two- and ten-year Treasuries fell to 39 basis points, the narrowest since August 2007. Typically, as economic expansions mature, the yield curve flattens and can invert (short-term rates higher than long-term) as the Fed raises short-term rates to combat inflation. The spread between three month bills and 10 year notes has inverted prior to each of the past seven recessions, but it should be noted that while it’s not guaranteed to happen, it can take one to two years for a recession to develop after the curve inverts.
2. Commodities and related stocks: In a rising interest rate environment near the end of an economic expansion, this asset class usually outperforms. Although there have been pockets of strength due to rising oil prices and a weak U.S. dollar, this group has yet to fully break out to the upside (see chart). But if it does start to consistently outperform the broader market, this could be another sign that the late expansion phase is upon us, with a potential recession approaching.

Source – thinkpipes© Platform

3. Sector Rotation: At various stages of the business cycle, certain sectors tend to outperform. As the cycle moves from late expansion into early contraction, you typically see the more defensive sectors outperform, such as utilities and consumer staples. As of this writing, the performance of consumer discretionary stocks relative to consumer staple stocks is at an all-time high, confirming investors’ confidence in a strong economy. Nobody knows when that sentiment is going to change, but significant shifts in relative sector strength could provide an early signal that the economic outlook is weakening.

The end of a bull market can feel like a game of musical chairs. No one can say exactly when the music will stop, but investors can use a few key markers to potentially reduce their odds of being left without a seat.

Past performance of a security, strategy, or index is no guarantee of future results or investment success.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/ SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

Rising interest rates and an extremely narrow spread between junk bonds and Treasuries historically doesn’t bode well for junk’s future performance. High yield bonds (measured by ICE BofAML US Corporate B Index) currently yield around 2.75% more than 10 year notes. Historically, this support level has led to a major mean reversion to around 7.5% (see graph below). Despite little to no net earnings, many of these companies have been able to survive and thrive the past few years as a result of the FOMC’s zero interest rate policy. As the Fed hikes toward its 2019-2020 median forecast (3.1-3.4%), it will undoubtedly make short-term borrowing costs more expensive for companies who tap the high yield market.

FRED^® is a registered trademark of the Federal Reserve Bank of St. Louis. The Federal Reserve Bank of St. Louis does not sponsor or endorse and is not affiliated with TD Ameritrade.

Corporate debt levels as a percent of gross GDP remains significantly elevated; more frighteningly, more than 50% of all investment-grade companies are rated just one notch above junk (Bloomberg, Gluskin Sheff). With each FOMC rate hike, financing costs for these ‘shaky’ companies will likely increase notably, causing a readjustment in risk premium or dramatic rise in yield. Furthermore, as the European Central Bank ends its government and corporate bond buying program in late 2018, European corporate bonds’ prices may experience significant yield increases, spilling over into the U.S. junk bond space. Investment managers with leveraged junk bond positions could exacerbate the potential rise in yields, especially relative to Treasuries, if they unwind their positions.

As 2019 approaches, investment managers should be aware of the potentially perfect storm of volatility within the corporate bond space. Global central banks are removing liquidity and as a result, financing costs for these troubled companies could increase exponentially. Speculative leverage may contribute to a major mean reversion in the high yield and 10yr note spread.

That said, those who wait patiently may be rewarded with attractive buying opportunities if current euphoria dissipates and historical mean reversion takes its course. But until that actually happens, it might be a good idea to prepare for bouts of volatility and higher junk bond yields.

Past performance of a security, strategy, or index is no guarantee of future results or investment success.

Investments in fixed income products are subject to liquidity (or market) risk, interest rate risk (bonds ordinarily decline in price when interest rates rise and rise in price when interest rates fall), financial (or credit) risk, inflation (or purchasing power) risk and special tax liabilities. May be worth less than the original cost upon redemption.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/ SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

The Advance/Decline line is one of the indicators that can help identify whether the majority of stocks in an index are rising or falling. This study takes the difference between the number of advancing and declining issues trading within an index and adds or subtracts that value from the previous day’s number. What we are looking for here is a divergence between the price of the index and the Advance/Decline line. If we see higher highs and higher lows on price but see lower highs and lower lows on the Advance/Decline line, that might tell us that the breadth of that index is losing strength, therefore increasing the likelihood that price will follow the indicator and form a top.

The chart below is a one year look at the NYSE Composite Index (NYA) along with its Advance/Decline line. You can see that the Advance Decline line is continuing to set record highs even though the Index hasn’t yet recovered all of the losses it experienced in early 2018. This depicts strength as it’s signaling that the majority of stocks in the NYA are still rising. Even at the price trough in late March, the Advance/Decline line registered a higher low, a sign of strength.

Source — thinkpipes Platform

Watching this indicator may help identify turning points in a broad market, as it can turn down 6 to 12 months before the price of the index follows suit.  In this case, we still haven’t experienced the first turn, so it appears that this bull market still has legs.

This example uses NYA, but most trading platforms offer several indices to choose from in your analysis. The NASDAQ Composite Index can be an important one to analyze this way, considering the vast difference between the sizes of the largest and smallest stocks within it. Today, the Advance/Decline line for NASDAQ is hitting new highs, along with the price of the index itself.

Although 2018 has produced significantly more market volatility than 2017, the broad strength in the U.S. stock market is still intact. Using technical analysis indicators like the Advance/Decline line can potentially help identify this strength and offer a possible warning when changes may be coming.

While this article discusses technical analysis, other approaches, including fundamental analysis, may assert very different views.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/ SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

When the Merrill Rule was overturned by the courts in 2007, an important competitive advantage was preserved for registered investment advisers (RIAs) while, around the same time, TD Waterhouse combined with Ameritrade to create TD Ameritrade. We‘ve been fighting by the side of RIAs ever since.

Part of our commitment to RIA advocacy is keeping clients like you informed of key policy developments that can impact your business. Recently, the SEC proposed a landmark series of rules that could redefine the competitive landscape for years to come.

The three-part package announced April 18, 2018, includes proposals to:

1. Raise the standard of care for broker-dealers, known as Regulation Best Interest
2. Enhance disclosures to clients of both broker-dealers and RIAs through a standardized client relationship summary — Form CRS
3. Clarify and revise the regulations applicable to RIAs, entitled “Proposed Commission Interpretation Regarding Standard of Conduct for Investment Advisers”

The SEC has invited the public to submit comments, but we doubt most RIAs have the time to consume and digest proposals that total nearly 1,000 pages. So we asked a leading authority on advisor regulation, Fred Reish of Drinker Biddle & Reath LLP, to boil down some of the more important aspects to just 10 pages – a 99 percent reduction!

We encourage RIAs to read this brief summary so that you may have a better understanding of what is being proposed, how it may affect your firms and, should you want, submit feedback to the SEC. The deadline for comments is August 7.

We hope you do and we also hope you will share your thoughts and concerns with us. Drop us a line, and take a moment to answer a five-question survey at: www.surveymonkey.com/r/GN7G8N7

As always, we at TD Ameritrade Institutional want to make sure you have a seat at the policy-making table to help ensure the viability of the RIA profession far into the future, for the benefit of you and your clients.

Skip Schweiss is Managing Director, Advisor Advocacy and Industry Affairs, at TD Ameritrade Institutional. He is also President, TD Ameritrade Trust Company.

Individuals are looking for trusted financial advice more than ever and they want to work with someone they feel they can relate to. And right now, the RIA pool doesn’t look like the investors.

A need for diversity among financial planners

The beauty of our country is that diversity increases with each new generation and will continue to do so. While attempting to grow your business and attract next gen talent and clients, it’s important to understand and be able to work with all types of associates and clients.

We know it’s imperative that the financial planning profession work toward expanding and diversifying the ranks of financial planning professionals who can meet the needs of increasingly diverse consumers.

We work closely with the CFP Board’s Center for Financial Planning, and since TD Ameritrade Institutional is the Lead Founding Sponsor, I sit on several councils, including the Diversity Advisory Council. One of our most ambitious projects to date has been a comprehensive study: Removing Barriers to Racial and Ethnic Diversity in the Financial Planning Profession.

Understanding why there is a gap in the industry

This study opened the curtain behind our profession’s worst kept secret: We have an issue with diversity. We know that out of the approximate 80,000 CFP professionals in the United States, less than 3.5% are black or Latino — which is a concerningly low percentage when you consider the overall representation of these ethnicities within the U.S. population.

Now we are learning why. The study provides us with insight from over 2,000 participants. One of the key questions asked black and Latino business professionals why financial planning hadn’t been a top-of-mind career choice, and what their main reasons were for not being interested in the field.

Information collected from these business professionals showed that the number one response, given by 58% of the group, was that they never thought of financial planning seriously as a career choice. Followed by the second most common response that 41% of participants said they don’t know enough about the job.

As head of TD Ameritrade Institutional Generation Next, this is something I hear about too often.

I frequently hear from college financial planning program directors that the number one reason more students in general are not studying to be financial planners is because they do not realize that the profession exists.

The sustainability of our industry and our willingness to embrace the future of the next generation go hand-in-hand.

How we can all make a difference

We can’t quickly solve for the lack of diversity overnight, but we are continuing to work with the Center for Financial Planning, and the rest of the industry, to attempt to break down barriers.

I encourage you to educate yourself further on this topic by reading the summary of study results, and upcoming thought leadership and action plans.

And, there are steps you can take now to help the industry start seeing a change sooner than later.

As part of the study, a mix of ethnically diverse CFP professionals, hiring/recruiting professionals, consumers who currently work with a financial planner, and prospects were asked what they thought could be done to boost diversity in the industry.

Most agreed these four general strategies would be the most effective:

1. Formal mentoring programs. Hire more interns, hire more interns, hire more interns. I can’t stress this enough. It’s an invaluable opportunity for students to get a real feel for the industry and it’s a win for your business. If you need help, check out our RIA NextGen Career Exchange.
2. Boosting awareness of the career – and how it helps. A common misconception about the RIA profession is that it’s a sales job and the thought of a commission-based job can be intimidating. In reality, a career as an RIA can be rewarding on both a personal and a financial level. Helping your community is a big part of why diverse financial planners joined the profession.
3. Introducing the profession earlier in the education path, in part through financial literacy initiatives. Go to a Career Day at your local schools. Talk about the importance of making good decisions financially and the opportunity to help others. Get set up on a local college campus as a guest lecturer, volunteer to host informational sessions at high schools, and participate in recruiting fairs. To help promote careers in financial planning, we launched the TD Ameritrade Institutional NextGen Scholarship and Grant Program.
4. More diversity hiring programs at firms. Minorities do not believe this career is open to them because there is currently not enough diversity in leadership and senior ranking positions to convince them otherwise. You can’t be what you don’t see, and right now, it’s hard to see…
5. And I’m adding a 5^th that wasn’t part of the study. Educate yourself on diversity, and more importantly, inclusion. This is a hot topic right now and there are great resources out there:
   1. InvestmentNews is running features all year focused on Diversity and Inclusion in our profession, with articles from thought leaders throughout the industry.
   2. Listen to 2050 Trailblazers, a podcast series from Rianka Dorsainvil that provides voices and perspectives you probably haven’t heard before.

I’ve been all over the country — to countless universities, conferences, and seminars speaking about this topic. And the good news is that almost none of this information comes at a surprise. And the bad news? Almost none of this information comes at a surprise.

We’re nowhere near done, but we’re garnering more tools each day. Share your ideas with me on Twitter (@KateHealy_TDA) and use #RIANextGen to join in on the conversation.

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.

Roughly 30 months have passed since the Federal Reserve began to exit its ultra-loose monetary policy. The Federal Open Market Committee (FOMC) has raised the federal funds rate from 0% to 1.75% and begun to slowly unwind its massive balance sheet of U.S. Treasury and mortgage-backed securities (MBS) purchased during the Great Financial Crisis. Plus, FOMC officials expect to raise rates two or three more times in 2018. As a result, the yields on longer duration U.S. Treasuries have steadily climbed, especially against their Eurozone and Asian counterparts. Major global central banks, such as the European Central Bank (ECB) and the Bank of Japan (BoJ), continue on with their ultra-loose policies, negative interest rates, and quantitative easing purchases. So the yield on U.S. 10yr notes continues to rise. Yet the Fed’s favorite Trade-Weighted U.S. Dollar (TW-USD) peaked more than a year ago (see graph below). The policy paths of the FOMC and the ECB/BoJ remain radically different, but this massive bifurcation has yet to produce the kind of surge in the dollar many analysts have expected.

For Illustrative Purposes

President Trump has pursued sweeping fiscal policy reform via lower corporate and personal taxes, repatriation of overseas dollars, and a massive infrastructure plan. But the TW-USD’s ascent came to an abrupt halt in early 2017 and has fallen notably since that peak. Despite the recent “relief rally” from deeply oversold technical conditions, the chart outlook for the dollar remains gloomy (see monthly chart of $DXY below) as the market holds below prior key resistance between $96–$98, and momentum now approaches overbought on a medium term aspect.

Source: thinkpipes platform

For Illustrative Purposes

Whether it be the radically different paths of the FOMC and ECB/BoJ, the rising U.S. Treasury yields, the geopolitical uncertainty of the Eurozone, or the fiscal reforms underway in the U.S., the dollar’s inability to sustain its long-term rally may be a warning shot to dollar bulls. If the ECB or BoJ were to begin unwinding their massive stimulus programs, this would likely put significant pressure on the dollar. But, the potential for looming long-term weakness would be welcomed with open arms by another crowd—the S&P 500 bulls. According to Dr. Ed Yardeni’s research (see the graph below from www.yardeni.com), the inverse relationship between the S&P 500 revenues per share and the TW-USD is staggering. This is because nearly half of the revenues from S&P 500 companies, largely multinational firms, comes from outside the United States. Thus, a potentially large fall in the TW-USD would be a tailwind for the S&P 500 into 2019 and beyond, possibly helping U.S. equities continue their bull market. Whether or not the dollar meaningfully falls into 2019 and beyond remains to be seen. But so far reaction to major developments and subsequent performance has perplexed many investment managers and traders.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade

Below is a chart from July 1, 2015 through December 31, 2016 of the S&P 500 (SPX) (top) and VIX (bottom). This was the last time VIX closed above 20. The first spike in VIX in August 2015 was caused by the market drop at the same time. SPX and VIX are inversely correlated so that makes sense, but what stands out is the lack of strength on its second spike.

In early 2016 SPX dropped to a lower level than it did in 2015, however VIX stopped 25%  short of its previous spike. From there, SPX started a rally that would last two years. There were some smaller pullbacks in SPX through that time, but each pullback corresponded with a lower VIX price.

Source – thinkpipes© Platform

We’re seeing a similar pattern emerge today. Here we have the same chart from January 1, 2018 to the present.

SPX is trending sideways within a consolidating triangle pattern, characterized by higher lows and lower highs. If we look at the high points in the VIX corresponding to the lows in SPX, we see that each VIX spike is lower than the one before it. This is showing that even though an uptrend in SPX has not established in the last three months, the fear that it will turn bearish is subsiding, thus leading to a higher probability that this triangle breaks up instead of down.

Source – thinkpipes© Platform

At some point the bear will return  and the relationship between SPX and VIX will be an important analysis next time we experience higher volatility.

The last chart depicts the beginning of the last bear market, April 1, 2007 – April 1, 2008. The VIX spike correlating with the low in SPX on November 23 is a key signal. The low in SPX comes to the same price as it did in August, and the VIX spike also comes to the same level. This is the major difference between heading into a bear market, and a pause in a greater bull market.

Source – thinkpipes© Platform

SPX has had more volatility in 2018 than it has in over two years, however it has seemed to be short lived. VIX has been drifting lower since its initial spike in early February, showing a reduced fear of SPX breaking lower and entering a bear market.

Next time we see a VIX close above 20, watch for the second spike. If its higher than the first, there may be larger concerns at hand.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/ SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

Marjorie’s plan: Do some networking, hear the latest from TD Ameritrade Institutional leadership, investigate new technology, participate in some breakout sessions….pretty standard conference activities.

Kelly’s plan: Lay the groundwork to score the right internship.

A connection made at LINC

Marjorie shared, “I’d been to LINC before and they talked about students but I had never paid much attention. Now, my own children are in college so I was chatting with some of them.  I ended up meeting local students from Temple University, including Kelly.”

As they were both heading into a session about women in the industry, Kelly asked Marjorie if they could sit together. She was the perfect combination of proactive and friendly. The two hit it off and connected on LinkedIn right away so they could stay in touch after the conference.

The internship…

When Kelly asked if she hired interns, Marjorie said, “we never have, but that doesn’t mean we never would.” As a small firm, Marjorie shared she had often considered creating an internship but wasn’t sure how to go about it.

Over the next few weeks they exchanged some messages. Meanwhile, Marjorie ran the idea by her husband, Charlie, who is also the President of the firm. Marjorie shared, “he said yes … as long as I take care of it. So I did. I identified providing 401(k) plans for employers as a potential growth area for our firm, and had not been able to spend time to research it properly. So I made it something for the intern to research. I mapped out a plan for an internship and had Kelly come in and interview.” Marjorie made a key move for a successful internship by creating a plan. This allows you to measure progress from your intern, and gives natural feedback and mentoring opportunities after each milestone.

This was in March. And, although Kelly already had multiple offers and was feeling some pressure to accept something, she held out hoping Marjorie would come through. At the end of the interview Kelly asked, “Are you offering me this job now?” Marjorie said yes. She replied “Is it appropriate to accept right now?”

….Quickly turns into more

Within a few weeks of the internship, the operations manager left the firm. Marjorie laughs, “That’s when my husband stole my intern. He had her doing all kinds of operational tasks. And, anything that we asked, she’d say: “I’m here to learn. I’ll do anything.”

Marjorie Wentz, Wealth Advisor, Trinity Wealth Management; Kelly Bradley, Financial Planning Associate, Trinity Wealth Management

Marjorie shared that toward the end of summer, Kelly was able to schedule her fall semester classes during two days a week. “She worked with us the other three. By November, we knew we had to keep her. Not only was she so effective at operations that we didn’t have to hire a new operations manager, she out-shined our other full-time employee. So, we offered her a full-time position upon her graduation.”

Kelly’s perspective

Upon graduation in May of this year, Kelly will already have a full year of experience at an RIA firm under her belt. She says, “Working almost full time, I feel like I know more than my peers. Thanks to this experience, when we learn about something in class I’m one step ahead because it’s more than a theory to me. I’ve already seen it.” Kelly has already done real-world 401(k) analyses, operations, on-boarding, and sat in on financial planning meetings.

Hoping to add to her credentials right away, she plans to take the Series 65 soon and then focus on her CFP. I have no doubt she’ll crush it like she has her other goals.

Key takeaways

This story shares so many of the things I talk about — and I encourage you to keep these in mind when it comes to internships and recruiting NextGen talent:

• Interns aren’t just for large firms — Trinity Wealth management is a four-person firm.
• Non-advisor roles are important — not all career paths lead to becoming an advisor.
• Don’t be discouraged by a longer lead time — take the time you need to test whether a candidate is a good fit for your firm; it doesn’t happen overnight.
• The RIA model can be a selling point — Kelly held off on accepting other offers, hoping Marjorie and the RIA model would come through. It’s a distinction that can hold value.
• The end of summer doesn’t have to be the end of the internship — local interns may have the flexibility to work part-time during the semester. This continuity is a potential benefit to the firm, and the student is exposed to real-world experience, which could put them ahead of peers.
• TD Ameritrade Institutional can help — The RIA Intern network is a great resource for NextGen talent in your area. Post your positions on RIANextGen.com and search for the right candidate from the hundreds of student resumes already posted. This summer we will also offer comprehensive guidebooks to help you launch, conduct and transition talent from an internship program.

I’d love to hear what interns in your firm are up to and the impact they have on your business. Let me know @KateHealy_TDA #RIANextGen

TD Ameritrade and the above named firm are separate and unaffiliated firms, that are not responsible for each other’s services or policies. TD Ameritrade does not recommend or endorse any advisor that utilizes its brokerage or custodial services.