What Do Financial Planners Do?

Wealth Management

By Victoria Rogers

I had the pleasure of attending the FPA Experience last week. The Experience is the Financial Planning Association’s largest conference of the year. Financial professionals from all over the world attend.

Listening to Neel Kashkari, head of global equities at PIMCO, speak, I was reminded of the movie “The Princess Bride.” When Prince Humperdinck is asked if he wants to watch Wesley’s torture, he replies “Tyrone, you know how much I love watching you work, but I've got my country's 500th anniversary to plan, my wedding to arrange, my wife to murder and Guilder to frame for it; I'm swamped.” Our economy is much the same: many moving pieces, any of which can sink the fragile recovery.

Overall, the tone of the participants was cautiously optimistic. GDP growth is slow but moving forward; housing is starting to rebound; there is renewed interest in manufacturing and promise of research and development. The fiscal cliff is seen as a non-issue. Congress will most likely extend the Bush era tax cuts which, of course, will just extend the uncertainty. Still, there is a lot of money on the sidelines waiting for a stronger recovery and the result of the election. Most experts believe taxes will go up. Spending cuts alone cannot shrink the deficit. Businesses are nervous about the effect of the Affordable Care Act, but the consensus is that the act is a move in the right direction. With an aging population, healthcare becomes not a benefit for those who can afford it, but a necessity. I had the opportunity to speak with planners from Germany and Canada. Each country has socialized medicine and neither can understand what has taken us so long and why there has been such a debate.

Without legislation, estate and gift tax limits will change dramatically from the current $5,120,000 exclusion back to $1,000,000 with the tax rate, currently capped at 35%, jumping to 55%. There are planning opportunities here for those with a large estate. Or consider Social Security. Do you know the best time to begin collecting Social Security? Your benefit will grow if you defer collecting, but are you aware that there are several strategies that can maximize your Social Security income, especially if you are married. What about a Roth conversion? You have to pay taxes upon the conversion, but most agree the current tax rate is the most favorable we will have for quite some time.

The face of wealth is also changing. By some estimates, women control almost two-thirds of the wealth of the nation, but our voices are not being heard. A woman can feel disenfranchised after a divorce or other life event. We explored ways to engage using participatory processes. Conversation, relationships and sharing stories become the tools for better understanding.

This year the planning community has been abuzz with eldercare issues, women and finance, student loan debt, Social Security planning and estate planning. We at Schneider Downs Wealth Management Advisors can help with these issues. Although you know us as investment advisors, we also offer planning services to our clients. Five of the SDWMA team are CERTIFIED FINANCIAL PLANNER™ members. We are educated to balance investment, tax, insurance, retirement and estate needs when developing a life plan.

Do you have questions or concerns about the future? If so, you may just need a financial planner.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.