Headlines you need to know this week
Rising health costs may mean lower retirement savingsMore than 60% of participants in 401(k) plans in a survey cited concerns about rising health-care costs as the reason for contributing less to retirement plans. Higher health-care expenses also have more effect on men than women, with 72% of women noting they spend less on recreation or entertainment to cover health-care costs, compared with 59% of men.
Financial advisors fight against elder fraudA financial advisor could be the first line of defense for seniors against elder fraud. Seniors lose about $36.5 billion each year to financial fraud. In 2015, broker-dealer firms reported nearly 2,300 cases of suspected senior fraud. More than half of those cases involved family members, or other third parties, trying to access seniors' accounts, the report stated.
Technology is disrupting the role of adviceThe role of financial advisors is changing. New research from the Boston Consulting Group cites technology and better-informed clients as drivers of change. Relationship managers in the future will likely be required to have more financial education and the ability to adapt quickly to technology tools.
Women, millennials lead the way in socially responsible investingA survey of high-net-worth investors found the number of women and millennials allocating assets to socially responsible investments surged in the past two years. The percentage of millennials who had begun investing in SRI jumped to 28% from 17% in 2015, and for women the number rose to 18% from 9%. More men said they were interested in this type of investing — increasing to 31% from 16% in the prior study.
Millionaire confidence plungesConfidence among millionaire investors dropped in May, marking the biggest one-month decline in 13 years, according to Spectrem Group. It was the first time in six years that millionaires were less confident than the “affluent investor” group (those with at least $500,000 in assets). Spectrem cited uncertainty around policy, including tax reform, as a factor.
House passes bill to ease banking regulationsThe House voted 233 to 186 to approve the Choice Act, which would eliminate numerous financial regulations enacted by the Dodd-Frank Act after the 2008 crisis. The bill eases rules around capital requirements for banks and would also eliminate the Department of Labor’s fiduciary rule. The measure will now go to the Senate.
How tech can help advisors focus on the big pictureMore financial advisors are using artificial intelligence technology to answer clients’ frequently asked questions and provide tools for simple calculations. Leveraging tech can give advisors more time to focus on financial planning and have in-depth discussions.
U.S. Chamber says fiduciary rule could hurt saversThe Department of Labor’s fiduciary rule could result in higher service fees on retirement accounts and cause millions of investors to lose access to financial advice, according to the U.S. Chamber of Commerce. The rule, which takes effect June 9, is still under a review by the DOL.
Relationship building a top skillMore advisors are focusing on relationship building with clients, guiding them on meeting their goals outside of a financial plan. A study found that these so-called “soft skills” will become more important than technical skills in the next five to ten years. In the survey, 38% cited relationship building as the most important skill.
Advisors bridge generation gap in the workplaceA firm with advisors across generations may have an advantage. Boomer owners may see an opportunity to educate millennials about the business. Millennials may want to be part of the succession plan. Wealthmanagement.com offers some ideas on how to bridge disconnects for a smooth transition.
Millennials working hard to retire earlyMillennials are hard at work trying to retire early. To meet that goal, 80% are already saving for retirement and 75% said they are cutting expenses to boost their savings, according to PlanSponsor. Nearly half of those surveyed said they are willing to take on more risk to grow their nest egg.
Advisors organizing family meetings to talk wealth transferMany 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.
Robo-users prefer human advisors when creating a planDespite 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.
Read our views on preserving and enhancing wealth for the future with financial-planning experts Bill Cass and Chris Hennessey
Explore our thinking about today’s financial markets
Stay on top of trends in mobile technology, software, and social media