Headlines you need to know this week

April 16, 2019

Health savings accounts on the rise

Health savings accounts are on the rise. According to a recent study, the number of accounts totals 25 million, representing a 13% increase from a year earlier. Assets also grew 19% to $53.8 billion. Employer contributions also increased, the report found. The number of HSAs is projected to rise to 30 million by 2020.

Financial advice helps boost retirement confidence

Most Baby Boomers who work with a financial advisor are confident about retirement. In its annual Boomer retirement survey, the Insured Retirement Institute found that a significant number of Boomers lack a financial plan. Most (70%) respondents working with an advisor have a savings goal. Among individuals without an advisor, only 25% have a goal.

Many investors want custom communications

Financial advisors are using more technology to communicate with clients and are more focused on customizing those messages, according to a new study. More than half of investors surveyed noted they receive some advisor communications tailored to their needs and goals. Respondents also reported a growing use of social media. Many Millennials (more than onethird) said they use a smartphone to read communications, compared with 21% of Gen X and 7% of Baby Boomers.
April 9, 2019

Sustainable investing assets surge worldwide

According to a new global report, assets in sustainable investments grew to $30.7 trillion in 2018, an increase of 34% from 2016. Europe had the largest concentration of sustainable assets, followed by the United States, where sustainable assets grew 38%. In Europe, the most predominant strategy was negative screening. In the United States, the top strategy was a focus on ESG (environment, government, and social) characteristics.

Early education about finances could pave a path to saving

Most Millennials (84%) in a recent survey reported that they were not prepared to manage their money by the time they graduated high school. In fact, 76% of Millennials in a separate study believe personal finance courses should be required in high school. Parents may want to consider using apps to teach children about finance. Research by the University of Cambridge found that children as young as seven years old have an understanding of basic concepts of finance.

Defining a niche may help advisors stand out

With more than 300,000 financial advisors in the United States (Cerulli), and an expansion of robo advice, the competitive landscape for financial advice is significant. Advisors may consider specialization as a way to differentiate their business. A recent U.S. News article examines how advisors may identify a niche and communicate their product and service offerings.
April 2, 2019

Longevity risk is a priority for planners

Financial advisors pointed to longevity risk as the issue having the most impact on their practice in a recent survey by Schwab Advisor Services. Increasing longevity, and consequently, more time in retirement, affects how individuals and their advisors plan for adequate funds in retirement.

The 4% rule may be back, for now

A rule of thumb that retirees should plan on withdrawing 4% from a balanced retirement account for annual income may be back on the table for consideration. According to a recent report, the rule may work better in the current market environment of low inflation and higher fixed-income returns.

A 401(k) reminder could help savers

A recent survey by TD Ameritrade found that most people do not have basic information about their 401(k). The survey noted that only 20% of savers knew the maximum contribution level. Also, just 25% of respondents knew that a spouse who was not working could still contribute to an individual retirement account.
March 26, 2019

Washington state considers retirement savings plan

Washington state lawmakers are considering establishing a state-run retirement savings plan for private sector workers. The bill, introduced in January, has already received Senate approval and is under consideration by the House. Nearly two dozen states have considered setting up a state-run plan for workers who do not have access to a retirement savings plan at work. Oregon launched its government-run retirement plan in 2017. California is also preparing to introduce a plan.

Are Gen Xers neglected?

Financial advisors may be so focused on growing the number of Millennial clients that they are neglecting another group — Generation X. New research from Cerulli found that Gen X has a total of $7.6 trillion in investable assets, compared with $1.8 trillion for Millennials. In analyzing the projected wealth transfer over the next three decades, younger Baby Boomers and Gen Xers are expected to inherit the most significant share, the report stated.

Most taxpayers plan to save their refunds

In a survey of adults receiving a tax refund this year, half plan to save the money, according to the National Retail Federation. In another survey, 28% of respondents planned to save most of the funds, and 25.2% planned to save the entire refund. Another 6% of those polled noted they would invest most or all of the refund.
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