Headlines you need to know this week

December 12, 2017

How tech will transform wealth management

In a recent survey of 1,000 advisors, most respondents cited automated advice and artificial intelligence as the leading concepts that will change the wealth management industry over the next three years. Yet among smaller practices — those with less than $100 million in assets under management — behavioral finance and advanced risk profiling software ranked higher among transforming technologies. Smaller firms were also particularly focused on ways to enhance the human interaction with clients.

Legislation seeks to expand access to retirement savings

The Automatic Retirement Plan Act of 2017, introduced recently in the house, would require that all employers have a workplace retirement plan. The legislation, introduced by House Ways and Means ranking member Richard Neal, would exempt employers with 10 or fewer employees and new businesses that have been in operation for less than three years. The legislation would offer start-up credits for companies with less than 100 workers, as well as an auto enrollment credit for small employers.

Research finds auto features improve retirement savings

New research found that a combination of automatic plan design features helps improve retirement savings participation and contribution rates. With access to auto escalation, most contributors raised deferral rates by one percentage point each year. Among plans without any auto features, only 44% had savings rates of 10% or more. For plans with auto enrollment, 67% had savings rates of 10% or more, and that total rose to 70% among plans with both auto enrollment and auto escalation.
December 5, 2017

Elder financial abuse may threaten the economy

Financial exploitation of seniors is a threat to the economy, Philadelphia Federal Reserve President Patrick T. Harker said recently. He noted that the size of the problem is not known. Estimates of the annual cost of financial abuse range from $3 billion to $36 billion.

Investors feel they are not saving enough

Many investors around the world believe they are not saving enough for retirement. In a survey of 22,000 investors in 30 countries, respondents said they are saving an average of 11.4% of annual income but believe they should be saving 13.7%. Respondents in Europe said they should be saving an average of 12.0% to be comfortable in retirement. In Asia, investors said they would probably need to save 15.3%, compared with 15.0% for those in the Americas. Among those already retired, 66% said they wished they had saved more.

Gen Xers put off saving for retirement

Burdened by debt, including credit card and student loan debt, many Gen Xers are putting off saving for retirement. In a recent survey, 50% of Gen Xers stated that they cannot save for retirement until they pay off their credit card debt. Gen Xers also have an average non-mortgage debt of $23,000. A full 63% polled believe “everything will just work out” when it is time to retire.
November 28, 2017

Recession impact still affecting millennials

The number of older millennials living with relatives continues to rise, according to a recent analysis of Census data. About 20% of adults ages 26 to 34 are living with parents or other family members, up from 17% in 2012. Nearly 60% of younger millennials live with relatives.

Is shopping debt a growing problem?

Consumers are expected to spend $660 on average during this year’s holiday season, a recent survey found. Respondents said they plan to spend the same amount as last year. But 24% said they overspent in 2016, and 27% are not making a budget. In addition, 24% of millennials still have not paid off their credit card debt from the 2016 holiday.

Even with delay, DOL ready to enforce fiduciary rule

Despite the delayed implementation of parts of the Department of Labor’s fiduciary rule, DOL Secretary Alexander Acosta told the House Committee on Education and the Workforce that if companies intentionally violate the "best interest" standard, the DOL would enforce the rule.
October 17, 2017

Retirement challenges not unique to the United States

Individuals planning for retirement in several countries share many of the same concerns as those in the United States, an international survey found. The study, which surveyed individuals in the United States, United Kingdom, and Australia, found that respondents were concerned about how much to save for retirement and assessing the impact of longevity risk and health-care costs.
September 26, 2017

Income uncertainty weighs on women’s risk tolerance

Women may be less risk tolerant than men but the catalyst is income uncertainty, according to a University of Missouri study. In analyzing more than 2,200 unmarried individuals in the Survey of Consumer Finances, researchers found that women are more likely to have uncertain incomes from one year to the next. Life events and caregiving affect income levels. The study also found that men and women receive different types of advice from advisors.
August 22, 2017

Millennials drive growth in sustainable investing: study

Millennials are driving growth in the $9 trillion sustainable investing market, a Morgan Stanley study found. Interest among millennials grew to 86% in 2017 from 84% in 2015. Millennials are twice as likely to invest in funds with social or environmental goals. Investment products focused on sustainable investing grew at a rate of more than 33% from 2014 to 2016.
August 1, 2017

Financial literacy an issue for retirees, especially women

A recent survey from the American College of Financial Services found that retirement-age women lagged men in their knowledge about securing income in retirement. Although neither group were high scorers, 18% of women passed the college’s retirement-income literacy quiz, compared with 35% of men. The study also noted that effective planning is linked to financial literacy.
May 23, 2017

Advisors organizing family meetings to talk wealth transfer

Many financial advisors are introducing new programs and ideas to talk to their clients, as well as their families, about wealth transfer, CNBC reports. With more than $30 trillion expected to move from boomers to the next generation in the coming decades, heirs will likely need guidance. Some are organizing meetings with multiple generations. Younger advisors are also playing a role in this business building effort.
April 12, 2017

Robo-users prefer human advisors when creating a plan

Despite the rise in use of robo-advisors, many investors prefer to work with a human when crafting a financial plan, according to Investor’s Business Daily. Among investors using a robo-advisor surveyed by the Spectrem Group, only 13% cited the robo as their primary advisor, while 18% said they use a full-service broker as a primary advisor. A full 66% said human advisors did a better job creating financial plans and 50% said people were more capable of making changes to those plans.
Wealth Management Center

Read our views on preserving and enhancing wealth for the future with financial-planning experts Bill Cass and Chris Hennessey

Putnam Perspectives

Explore our thinking about today’s financial markets

Advisor Tech Tips

Stay on top of trends in mobile technology, software, and social media