A new tool for client prospecting; tax strategies for 2024; tips on how to retain diverse talent
Financial Planning
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FINTECH: Kanishk Parashar said he saw the need for his latest wealthtech venture long before its public launch this week.
Parashar, who co-founded portfolio projection software firm Real Capital Innovation (RCI) alongside Soo-Yung Cho in 2017, said that financial advisors are just as interested in growing their practices as they are in keeping current clients happy. But while there are countless wealthtech tools focused on client retention, he felt the pickings were slim when it came to solutions squarely focused on modernizing the prospecting process.
TAX STRATEGY: The new, higher limits on retirement savings next year give financial advisors and their clients a fresh opportunity to consider bigger contributions and other strategies in 2024.
Annual cost-of-living adjustments to individual retirement accounts, 401(k) plans and other employee nest eggs boosted the maximum allocations by $500 each to $23,000 next year for workplace savings and $7,000 for the Roth or traditional IRAs, according to guidance released by the IRS earlier this month. Like the inflation-adjusted tax brackets in 2024 and delays in new IRA catch-up contribution guidelines under the Secure 2.0 Act now slated for 2026 rather than January, the tweaks to the rules on max contributions could alter some clients' plans next year.
The hiked maximum contributions could change how much clients set aside for retirement, their overall cash flow and whether to use other types of savings or investment accounts.?
PRACTICE MANAGEMENT: When it comes to improving diversity at a wealth management firm, it's not necessarily who's hired but who stays that counts. And replacing advisors, especially good ones, is a costly affair.?
Key to successful retention is creating an inclusive environment for all employees to thrive, according to Richard Shaw, CFP Board director and principal and senior client advisor at Bessemer Trust. "Without inclusion, retention is not possible," Shaw said, speaking on a panel Thursday at the CFP Board Center for Financial Planning's sixth annual diversity summit in Arlington, Virginia. The panel was a follow-up to a paper the CFP Board published in May that highlighted three firms as "case studies" in creating a specific form of programming to improve diversity, equity and inclusion in a wealth management practice.?
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