Investors and financial advisors are not moving into 2022 in the same area as they started in 2021.
They reconsider many aspects of financial planning, such as what retirement will look like and when it is worth the wait. They are also concerned about rising inflation, volatility, and taxation, all of which will change the financial position of 2022.
The coronavirus, entering its third year, has brought many of these questions and concerns to counselors and clients.
For mentors looking at where the next year will lead them, here are some of the best financial advice strategies for 2022:
- Rethinking retirement.
- “The bucket list remains.”
- Preparing for inflation.
- Less grip, more pressure.
- Advanced tax planning.
- Hybrid client communication.
The customer experience during the coronavirus violence was similar to a retirement test, writes Joe Coughlin, director of the Massachusetts Institute of Technology’s AgeLab, in a recent white paper. “According to Drs. Coughlin, because the pandemic has meant spending a lot of time at home, has made us reevaluate things like where we live, how we work, who we spend time with, how we travel, what we do for fun. and how we use technology, “said Ryan Sullivan, chief information officer at Hartford Funds. As a result, many Americans now have a much better view of what retirement life can really be.
“Financial experts can help clients find out what lessons they learned during the violence and apply what they have learned to their financial plans and retirement goals,” Sullivan said. He suggests asking clients similar questions about their pandemic life:
- How do they feel about the place where they lived?
- If they worked remotely, what was the experience like?
- Who do they wish they had spent more time with – or less – with?
- Are they always busy or are they easily bored?
- Did they want to move or be content to stay at home?
- How much did they spend while in custody? Was it more or less than expected?
- How do they maintain their physical and mental health?
“It takes empathy, but helping clients or opportunities to consider those questions may increase their knowledge of what they really want when they retire – perhaps something different than previously thought,” Sullivan said. “And if they can see you, they can plan for you.”
“Life Bucket List”
The concept of a “bucket list life” is simple: Retirement planning should be about enjoying the trip rather than just focusing on the destination.
It is the theme that Brad Levin, managing director, and chief financial adviser at The Colony Group, shared with his clients. And it is one that he sees “becoming a major trend among the financial adviser’s community by 2022.”
Levin has seen a change in customer perceptions over the past two years, which has been partially driven by the pandemic. “After almost two years of not being able to walk, most people are looking forward to traveling a lot, not just when they retire, but even later,” he said. “Some clients are also expressing a desire to retire early, while others are seeking to increase their happiness in life before retirement.”
This does not mean that clients and advisers can stop planning for the future – consultants still need to help clients plan for a retirement that can take more than 30 years. But it can also help clients create programs to finance a healthy sense of life on their retirement journey.
“Showing clients what they will need to achieve these goals can lead to increased financial confidence and help them feel able to give themselves permission to enjoy today while planning wisely for the future,” said Levin.
Inflation Preparedness Inflation
Inflation will continue to be a major problem in 2022, said Brian Stivers, an investment adviser and founder of Stivers Financial Services. Therefore, “investors and advisers alike will be looking to redistribute investments in plants that may perform well in times of inflation,” he said. “Historically, these have been sectors such as energy, resources, consumer needs, health care, banks and other sectors that are prone to inflation.”
Investors who tolerate low risk may be looking to move to a safer place not only due to inflation but also from COVID-19 and mid-term elections. Many advisers, low-risk investors, or those with limited experience may prefer to wait until the end of the recession and see how mid-term elections could affect the market, Stivers said. This could trigger a major movement in the U.S. Treasurys, temporarily fixed tools, even financial markets, and bank accounts.
“One of my long-time clients often says, in uncertain economic times,‘ Zero is his hero, ’” says Stivers, meaning his client is more concerned with avoiding losses than struggling to make a profit. He adds, “2022 could be one of those years when many investors and advisers decide ‘zero their hero.’
Hold Slowly, More Strength
The buying and holding strategy have been a popular investment in recent decades, but Stivers thinks the recent market turmoil could change this by 2022. “The 2018 market turmoil is likely to increase the popularity of strategic and strategic strategies. By 2022,” he said.
The idea of market development and market trend strategies is that investors can use economic and market data to determine whether future trends are a good or bad time to be in the market, Stivers said. You can also use data to determine where the momentum is in market segments at any given time.
“Therefore, it makes sense to repatriate stocks when the trend, and the pressure, rises and rests in a defensive position, such as bonds or cash, when pressure, or trending data, follows below,” he says. This, he predicts, is more than just what investors and advisers will think about investing in 2022.
Advanced Tax Planning
Many advisers have heard the news that federal estate taxes, gifts, and taxes are levied in 2022. Gift tax evasion rises to $ 16,000 while asset exemption and generation tax exemptions are $ 12.06 million per person.
But there is a note on this issue and release: “Under current law, this top building and exemption from gift tax will expire on Dec. 31, 2025, and the release rate will drop to the release rate – expected to be between $ 6 and $ 6. $ 7 million per person – unless the rules are changed before then, “said Marla Petti, a certified public accountant, certified financial planner, and chief financial advisor at MAI Capital Management. more, which can be used during the life of the customer, he says.
“We use a variety of gift-giving strategies that may include the use of non-renewable trusts, including pension fund trusts, spouses’ lifetime trusts, deliberately defective trusts, or irrevocable life insurance trusts,” he said.
Integrated Customer Communication Models
The pandemic has forced many counselors to adopt a visible style of meeting with clients, but consultants may not want to immediately stop the practice. “As things continue to be normal in 2022, financial experts should consider using a permanent combination of models that integrates personal client interactions and ongoing interactions,” Sullivan said.
He points out the many benefits of providing continuous online communication, such as allowing consultants and clients to use their time more effectively and making it possible to “see” regularly. Visible meetings also make it easier for counselors to interact with other people in their clients’ networks, such as family, friends, or other professionals, he says.
“The extent to which each customer prefers visible meetings over personal meetings will vary, including that some may prefer non-participation,” he said. “However, providing an online option can divide a financial professional and can be a significant difference in busy, tech-savvy prospects.”
For a mixed communication model to work effectively, he says, financial advisers will need to put the same amount of thought and effort into refining the meeting experience as they do with personal meetings. “A person’s light, background, eye contact, body language, and voice are as important to the Internet as to a person, if not to himself,” he said.
Add one warning note: Do not book your visible meetings in sequence. “It can be confusing to stare at a webcam continuously and talk to a computer screen,” he said. “Give yourself – and your eyes – a break from time to time.”
Javier Niskanen is a crypto investor who is passionate about helping others achieve success. He has a background in computer science and has been involved in the crypto world since early 2017. Javier is excited to see how blockchain technology will change the world for the better.