Unless Congress takes action, the lifetime estate and gift tax exemption will decrease significantly when components of the 2017 Tax Cuts and Jobs Act expire at the end of 2025. Donor-advisor funds, charitable remainder trusts, and SLATs can help reduce the impact if the so-called Trump tax cuts aren’t extended.
It is imperative for advisors of wealthy families to set in motion proactive estate planning now to ensure wealth remains protected from tax changes.
Financial Stock Selloff
Wealth management stocks got smacked Tuesday, declining more than the broad market. Market observers attributed the losses to the spike in interest rates. This spike is likely to exacerbate cash-sorting issues at companies like Charles Schwab, as well as concerns about investment banking at financial-services companies that have multiple lines of business. Additionally, market declines have had a negative impact on assets under management at wealth managers. The losses proved relatively short-lived for LPL Financial, Raymond James, and Morgan Stanley, whose shares had regained most, if not all, of their Tuesday losses by Friday. Schwab stock, however, continued to slip as the week went on.
Good News for Millennials
Who is more on track for retirement readiness, millennials or boomers? It might come as a surprise that the correct answer is millennials, according to new research from Vanguard. The fund manager looked at savings rates across age groups and found that millennials were doing just fine, despite the well-known pressures they face, including burdensome student loan debt.
Homeowners Insurance Rates Soar
According to a new analysis by S&P Global Market Intelligence, average home insurance rates in more than a dozen states have seen double-digit increases. The national average rise in homeowners’ premiums is 8.8% so far this year. However, the hardest hit state, Arizona, has experienced an average rate increase of 18.4% through Sept. 1. Texas and Illinois follow closely with the second- and third-largest increases at 16.4% and 16.3% respectively. Other states with double-digit rate increases include Arkansas, Louisiana, Tennessee, and Utah.
Pershing X’s Big Plans
BNY Mellon’s Pershing X unit has secured a significant customer for its new technology offering. Integrity Marketing Group, a large insurer venturing into wealth management, is implementing Pershing X’s new platform called Wove for its advisors. Ainslee Simmonds, an experienced professional in tech start-ups within the wealth management industry, heads Pershing X, which operates as a division within Pershing. The name “Wove” represents the capacity to interconnect various wealthtech applications into a central hub.
Avoid Drowning in Credit-Card Debt
Due to the Federal Reserve’s interest-rate hikes, the interest charged on credit-card debt has surged. With Americans having accumulated over $1 trillion in credit-card debt along with rising delinquencies, sound financial management becomes crucial. In our latest Advisor Big Q feature, we asked financial advisors to share their best advice on managing credit cards. They provided tips on debt repayment strategies and leveraging perks available to savvy card users.
Motivating New Hires for the Long Run
To incentivize and motivate new hires over the long term, F.L.Putnam Investment Management takes a unique approach to compensation. The firm ensures that its new advisors receive equity in the company. “We want you to be an owner when you join our organization,” affirms Tom Manning, the CEO of F.L.Putnam Investment Management, in this week’s Advisor Q&A. This compensation feature has played a significant role in the firm’s rapid growth, with its assets under management doubling to $4.3 billion within a few years.
Wishing you a fantastic weekend.
