Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that the Treasury Department released proposed regulations that would clarify several aspects of Section 530A “Trump Accounts”. The proposed rules would make the allowed $2,500 employer contribution excluded from income to apply on a per employee basis and across all employers (so that an employee could only exclude a total of $2,500 from income no matter how many children or jobs they have), though the proposal does offer some additional flexibility by giving employers the option of allowing employees to make pre-tax salary reduction contributions (up to $2,500 per year) through a section 125 cafeteria plan to a dependent’s Trump Account. In addition, the proposal says that sole proprietors, partners, and 2%+ S-corp shareholders would not be able to make income-excludable employer contributions to their own or their dependents’ Trump Accounts (which is likely to disappoint business owners who hoped to gain the tax benefits of doing so).
Also in industry news this week:
- The Treasury Department said this week that it is issuing a final rule that permanently removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the Corporate Transparency Act
- Advisors and their clients alike appear to be more optimistic than they were earlier in the year, according to a recent survey, with a strong majority of advisors also reporting growth in the size of their client bases
From there, we have several articles on investment planning:
- While increased correlations between stocks and bonds in recent years might have some investors questioning the value of bonds within a portfolio, this statistic alone might not tell the full story of the potential benefits of a bond allocation
- How advisors are working with clients who want to maintain larger cash holdings amidst market uncertainty
- Why diversification might be better thought of as an ingredient in successful asset allocation rather than the goal itself
We also have a number of articles on retirement planning:
- Why the relative flexibility and simplicity of the SEP IRA could make it a useful tool for certain business owners and freelancers
- How cash balance plans have experienced growing popularity in recent years as a tool for high earners to defer taxes and build their retirement savings
- The nuts and bolts of establishing Solo 401(k) plans for self-employed clients
We wrap up with three final articles, all about the role of financial advisors:
- The history of musical conductors and how it mirrors the role of the financial advisor in supporting clients
- How financial advisors might ‘conduct’ clients’ financial lives in a world of advancing Artificial Intelligence (AI)-powered tools
- How financial advisors can once again move to ‘higher ground’ amidst a potential technological ‘threat’
Enjoy the ‘light’ reading!
