President Donald Trump has instructed that a reduction of the corporate tax rate to 15% be a key part of a tax-overhaul outline scheduled for announcement this week, sources say. Trump reportedly is ready to proceed even if loss of revenue requires him to abandon a campaign promise to reduce the budget deficit.
Congress' efforts to revise the US tax system should preserve incentives and tax treatment that encourage Americans to prepare for retirement, according to Cathy Weatherford, president and CEO of the Insured Retirement Institute. "[T]he importance of protecting and enhancing retirement savings has never been greater," she wrote in a letter to federal officials.
The Lifetime Income Disclosure Act would promote increased saving through its requirement for employers to provide estimates of their retirement-plan participants' future monthly income, says Lee Covington, senior vice president and general counsel of the Insured Retirement Institute. An IRI survey found that three-fourths of respondents would raise the amount they were saving for retirement 4 to 7 percentage points if they received such estimates.
Questions over what will become of the Labor Department's proposed fiduciary rule have the financial-services industry "in a pretty tenuous spot," said Robert DeChellis, president and chief strategist of Allianz Exchange and chairman of the Insured Retirement Institute's board of directors. The timing of the Senate's vote on R. Alexander Acosta, President Donald Trump's nominee for Labor Department secretary, will have a big effect on the rule's time frame, said DeChellis and other panelists at an InvestmentNews event.
Bank holding companies' annuity-sales income reached $3.22 billion last year, an increase of 2.3% from 2015, according to the Michael White Bank Annuity Fee Income Research Report. Banks' annuity sales could be on an upward trajectory, but that likely will depend on the regulatory environment that emerges from the uncertainty over the Labor Department's fiduciary rule, Michael White says.
Many broker dealers are working ahead of the effective date of the Labor Department's new fiduciary rule to review the way indexed-annuity sales are compensated. Some are considering bringing such sales in-house, which would give the broker-dealers greater control and could increase their revenues.
Newly widowed clients often change advisors because of the way financial advice is being delivered to them, not because there is anything wrong with the advice itself, says Barbara Shapiro, president of HMS Financial Group. "So, when talking to your widowed clients, be patient, but not patronizing or infantilizing," she says.
The Securities and Exchange Commission should take the lead in establishing standards for investment advice, including fiduciary duty, said acting Chairman Michael Piwowar. "We have an opportunity, with a changeover in administration now, for the SEC to reassert its role in this space," he said.
Total fines imposed by the Financial Industry Regulatory Authority shot up to a record $176 million in 2016, almost double the previous year's figure, according to an analysis by law firm Eversheds Sutherland. The biggest factor in the rise was FINRA's increasing use of fines of $1 million or more, the law firm said.
Pension plans may have higher administration fees than other types of retirement programs, and many businesses have moved away from them. However, pension plans also provide benefits in terms of employee recruitment and retention and higher contribution limits, writes Winnie Sun of Sun Group Wealth Partners.
The spring 2017 edition of IRI Insight looks at the retirement preparedness and confidence of baby boomers, finding that millions have limited savings and a poor understanding of the cost of retirement. More than ever, they need financial professionals to help them optimize their sources of income and ensure they do not outlive their financial resources. The spring edition also discusses empowering clients to make decisions in their best interest, the power of qualified longevity annuity contracts, and important retirement information and planning steps associated with age milestones.