Financial advisors vs. AI in FINRA Foundation study; ASA wants a look behind SEC’s curtain; a tax ‘double whammy’ for fraud victims
Financial Planning
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TECHNOLOGY: Despite the hype around and capabilities of AI technology, consumers still trust human financial professionals more — and by a significant margin in certain financial situations, according to a recent survey by the FINRA Investor Education Foundation . But when it came to statements on wealth management and stock performance specifically, respondents said they trusted AI nearly as equally as the human financial advisor.?
The survey, which polled more than 1,000 adults in February 2024, found that only 5% of respondents would seek AI to help make a financial decision, compared to 63% who said they would seek a financial professional and 56% who'd turn to friends and family.?
REGULATION AND COMPLIANCE: An industry group says it has tried asking nicely for information on how the SEC set fines in recent cases that hammered firms for alleged misuses of WhatsApp and similar messaging services.
Now the American Securities Association has turned to litigation. The trade and lobby group for regional financial services firms sued the Securities and Exchange Commission in federal court in Tampa, Florida, over allegations that it had improperly rebuked requests for insight into its penalty-setting methods.
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TAX: As fraud targeting older adults and other victims rises by several billion dollars each year, those suffering losses are more likely to be taxed on the stolen income.
The Tax Cuts and Jobs Act of 2017 changed the casualty and theft loss tax deduction to apply solely to costs related to federal-designated disasters. Previous guidelines had allowed for a fraud-related deduction. That drastically reduced fraud victims' claims in recent years, according to a Senate report earlier this spring. Beyond the rules shift for that deduction, many of the hundreds of thousands of Americans defrauded annually come to the unfortunate realization that they could get hit with higher tax bills thanks to penalties for the withdrawals from or liquidation of their retirement accounts, according to elder fraud expert Paul Greenwood of Greenwood Law.
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