FA Magazine March 2023 - Page 10

Editor ’ s Note
Editor ’ s Note
March 2023 • www . fa-mag . com
Roths And RILAs Can this marriage of a Roth and an annuity solve a longevity problem ?
Gresham On Phoning Your Future Self Clients aren ’ t good oddsmakers when it comes to their own futures and risks .

A More Conservative Playbook

Extended RMDs : Gold Mine Or Trap ? It might not make sense to wait for income .
Financial Planning For Couples Who Totally Disagree
When a couple ’ s attitude toward money differs , financial plans often fail . There are ways to restore unity and save the plan .


OME OF THE EARLY RESULTS ON 2022 ARE STARTING TO COME in , and a few conclusions are obvious . Advisors not only survived the 2020-2021 pandemic but many prospered . They also sailed through the 2022 bear market with much greater ease than they did in either of the previous bear periods ( 2008- 2009 and 2000-2002 ). Of course , even though last year ’ s bear market is not necessarily history yet , it still has not been as nasty as the first two big drawdowns of the 21st century .
But in any case , it ’ s clear that the events of the last three years have changed advisors ’ behavior . All the signs are that they have become somewhat more conservative in their management styles , according to the PULSE survey by Philip Palaveev ’ s Ensemble Practice .
What ’ s behind the increase in bottom-line consciousness ? Could it be that firms are nowadays beholden to one large shareholder , namely a private equity investor looking for returns ? Maybe , but many RIAs have become much bigger businesses with multiple stakeholders ( not just one PE firm ), and an 8 % to 12 % drop in revenues is more complicated to manage . Many advisors and their clients also are older , and this , too , might influence an owner ’ s management style .
While conservative financial management is understandable in light of the economic uncertainties , it is projected that the advisory industry as a whole will need almost 100,000 more advisors in five years to meet the growing demand for advice . Attracting young talent — and lots of it — is one way to meet that demand .
Another path is artificial intelligence , though many people believe this is a project for another decade . So far , robo-advisors have enjoyed only limited success . They ’ ve done better than , say , driverless vehicles , but the whole AI phenomenon remains a question mark for a distant future .
It is projected that the advisory industry as a whole will need almost 100,000 more advisors in five years to meet the growing demand for advice .
Closer at hand is the need to deal with clients ’ tax and estate planning . In the current issue of Financial Advisor , contributor James G . Blase looks at required minimum withdrawals in the wake of the SECURE Act , known as SECURE 2.0 , and concludes that it may not be in many clients ’ interest to postpone required minimum distributions , even if the government now lets them .
Another contributor this month , Joseph Darby III , attended this year ’ s Heckerling conference and reports that if there are no changes or amendments to current tax laws , December 31 , 2025 , could be the most active day since December 31 , 2012 , for estate planners . Meanwhile , he addresses the way rising interest rates are influencing grantorretained annuity trusts , or GRATs .
Washington Editor Tracey Longo examines the issue of women in the advisory business and talks about why the profession may finally be seeing some rising numbers among the ranks of female advisors .
These are just a few of the many intriguing articles you ’ ll find in the March issue .
Evan Simonoff
Email me at esimonoff @ fa-mag . com with your opinion .