Using real-life priorities, rather than abstract theories, is important when discussing financial literacy to get the message across, especially concerning those near the start or end of their career, writes FSI President and CEO Dale Brown. "[P]resent the topic as a way to help young people and retirees address their specific emotional needs, rather than presenting it as a path to wealth or becoming overly focused on particular concepts too soon," he writes.
Some in the retirement industry feared President Donald Trump's proposed overhaul of the US tax system would eliminate some or all tax advantages enjoyed by 401(k)s, individual retirement accounts and similar retirement-savings accounts, but that hasn't happened. Gary Cohn, director of the National Economic Council, said tax provisions relating to retirement accounts "will be protected."
Although there are still many details to be worked out, the Trump administration's plans to simplify the taxation structure and make drastic cuts to personal and corporate tax are bound to have consequences for advisors. Potential outcomes include more client resources to invest and an increased appetite for certain investments.
Democratic lawmakers went head-to-head with conservative think tanks in a hearing of the House Financial Services Committee regarding the Financial CHOICE Act. Democrats said the bill's revocation of safeguards could pave the way for another financial crisis, while advocates argued the Dodd-Frank Act has hampered economic recovery.
Treasury Secretary Steven Mnuchin says once the Trump administration has its major tax reforms underway, it will turn its attention to a fundamental overhaul of housing market finance. The issue has remained problematic since the financial crisis of 2008, and many market participants would welcome an initiative to bring private capital investment back into the market and avoid the need for further taxpayer bailouts of Freddie Mac and Fannie Mae.
Clients are unlikely to recommend an advisor if they are not fully aware of services offered or the ideal client profile, write Stephen Boswell and Kevin Nichols of The Oechsli Institute. They offer tips for starting this conversation to increase the number and quality of unsolicited referrals.
Corgenius CEO Amy Florian encourages advisors to help clients prepare for inevitable effects of aging by drafting a diminished-capacity letter that names trusted contacts and covers power of attorney. She says starting this conversation early, before any decline in faculties, is important and applauds a Financial Industry Regulatory Authority requirement that advisors do their best to obtain such information from clients.
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