Weekend Reading For Financial Planners (July 25–26)
Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that Treasury Department officials this week expressed concern about various “tax alpha” investment strategies, including Section 351 exchanges, “box-spread” ETFs, funds designed to generate ordinary losses, and ETFs that trade in and out of other ETFs to avoid dividend distributions. While Treasury hasn’t yet taken action to restrict any of these strategies (though one official said that “all the tools are under consideration” in addressing them), the comments highlight that certain tax-aware products and strategies that don’t explicitly have the government’s blessing might not be available for the long haul.
Also in industry news this week:
- A report from Russell Investments puts the value of a financial advisor at 4.92% (a figure that exceeds many other estimates of this elusive figure), with an advisor’s ability to keep clients invested during turbulent market periods identified as a particularly valuable service
- CFP Board has submitted a proposal for public comment that would explicitly allow its Disciplinary and Ethics Commission to consider the expungement of a criminal conviction as a mitigating factor when considering an individual’s fitness for certification
From there, we have several articles on retirement planning:
- Fidelity’s latest estimate of retirees’ lifetime health costs jumped 7.5% this year to $185,500, though the fact that many of these expenses are often spread out over the course of a retirement could make them more manageable outlays to plan around
- Why dental expenses can be an underestimated part of a retiree’s budget and how advisors can help clients evaluate potential solutions to mitigate them
- How advisors and their clients can balance the relative unlikelihood of experiencing an extended long-term care event with the potential costs if one does occur when it comes to saving for and/or insuring against this contingency
We also have a number of articles on client communication:
- How advisors can handle a client’s ‘hot’ investment idea tactfully and in a way that demonstrates respect while keeping them on track to meet their investment goals
- While portfolio diversification is a core tenet of many advisors’ investment strategies, clients might have a different understanding of what it actually means for their investments
- How creating a communications matrix can help advisors organize the different types of client communications they produce during the year and better meet particular clients’ needs
We wrap up with three final articles, all about technology and modern society:
- While hybrid workplace arrangements appear to represent a ‘sweet spot’ between working in the office full time and fully remote work for many employees (with potential productivity boosts for their employers as well), experiences can vary significantly based on an individual’s unique circumstances
- How the rise of algorithmic-based recommendations could be driving real-world cultural trends (and leading some individuals to spend significant time waiting in lines)
- Why “skill nostalgia” can develop when technological innovations lead to a reduction (or even elimination) of certain occupations, and how this isn’t necessarily a modern concept
Enjoy the ‘light’ reading!
