As usual, there’s a hunt for assets that can possibly perform well if inflation ramps up. What’s a particular challenge here is understanding how the snowballing sanctions might affect each market. The Russian invasion of Ukraine has already caused a $1 trillion reduction in the global financial markets. Energy, utilities, and staple food sector in particular have been shuddered and face an extremely uncertain future. So, there’s a small room for inflation-time prediction and planning.
- Less holding, more momentum
Momentum and trending strategies are likely to come in place of long-term investment. The algorithm is the following: once the trend or momentum goes up, investors reallocate into equities; when there’s a fall, bonds or cash could be used among other positions to try to secure a bet.
An increase in federal estate and gift tax exemption, as well as in the New York estate tax exemption, are the major tax changes that U.S. citizens have seen in 2022. This adjustments are worth being considered in a short-term perspective, but long-term, there’s less certainty in the U.S. tax landscape.
- Hybrid client communications
While being a forced change, switching to online added flexibility to financial advisors’ workstyle. As now they can return to offline practice at least partially, a hybrid model gains popularity. Preserving all the benefits of occasional face-to-face interaction, such a model allows both an advisor and their client to make most of their time. Also, a more personalized approach is possible when combining online and offline communication.
Retirement planning: What to expect and what to do?
As we have set the background for this year, let’s move to concrete actions your clients can take. Below, you’ll find advice for retirement planning and investing corresponding to the trends mentioned above, provided by The Charles Schwab Corporation, a leader in brokerage, banking and financial advisory services.
- If inflation increases:
- To lessen the risks, go for a variety of assets, both for your current investments and for your retirement plans.
- Consider various active and passive sources of income and assets.
- Reassess your financial plan once in a while to check if it goes in line with new scenarios possible considering the current context.
- If tax law changes:
- Leverage a tax-advantaged account or a few for more flexible tax management.
- Reduce the amount of tax in brokerage accounts.
- Switch to short-term from long-term gains, which are taxed at a lower rate.
- Choose high-yield investments, ideally—those not falling under preferred tax rates.
- Try tax-loss and tax-gain harvesting to help cut on future taxes.
- Keep in mind that current tax laws will expire by 2026. Strategies to use: annual exclusion gifting, spousal lifetime access trusts (SLATs), charitable lead trusts (CLTs).
- If pandemic-like situation returns:
- Health risks are financial risks too, we’ve seen enough examples of that in these three years. Plan your healthcare costs and think about health insurance for your retirement and transition period.
- When planning an earlier retirement, consider that if you apply for Social Security at the age of 62-72, the sum on your monthly check will get higher.
- Manage your risks with volatility. You might not be able to wait too long for money from your investments, so make sure to obtain enough cash when you expect a substantial spending in the near future.
Marketing for financial advisors: Top 10 ideas
Creating a customer’s journey is also a journey. For financial advisors, there’ll be lots of new destinations—or yet undiscovered spots in the familiar areas of marketing. While the world of finance might seem disturbing this year, the world of marketing has more of an invigoratingly exciting vibe to it.
To create an up-to-date and compelling client experience this year, as a financial advisor, you’ll need to underpin your marketing with these three whales: personalization, brevity, and social responsibility. Let’s take a closer look at each of them.
- Personalized and exclusive content
With tons of posts and emails thrown at us each day, people are getting pickier. Because they don’t want to waste our time on generic things as the world goes round faster and faster. That’s why your emails need to be hyper-personalized for your prospect and clients to open and read them, not move to trash right away. The same goes for the whole bunch of content you provide: custom selections of workshops, video series, etc. will let the person feel that they matter.
By segmenting your clients and creating such selections, you’ll get a better understanding of user search intent—a key SEO ranking factor in 2022. Learning what interests your customers is a way to provide unique, relevant and engaging content.
Think of custom solutions for your marketing needs too—instead of using templates, it’s better to create lead forms that match your goals.
Last but not least, personal interaction is something that should be at the core of financial advising. First-party data is what helps you to customize the client’s experience in the best way possible. Talk, ask questions, ask for feedback.
All of that sounds like tons of work, but intentional automation, another trend this year, will save much of your effort. By automating repetitive tasks only, you’ll be able to focus on providing unique value to your clients and won’t fall victim to interest-killing templates.
Social posts are something that needs trimming this year. People have no time to read lengthy pieces, so even a substantial number of your blog posts should be concise.
Long reads will still be there, but audio and video content have outrun texts as capable of presenting quite a bulk of information, but in a more engaging way. This year they’ll gain the largest niche in the financial advisors’ marketing arsenal. However, to drive traffic and conversion, they need to help your target audience solve a problem or tell an inspiring story; better—both.
While content marketing in itself is important, it’s nothing if a business doesn’t have a mission. Championing for a cause might be one, but it’s hardly a case in the financial advising sector. But now people, Millennials and Gen Z in particular, are more likely to choose businesses that are socially responsible. Finding a cause that you are genuinely interested in and using your business capacity to support it will naturally attract clients and prospects.
A financial planning calendar from an expert
Eating a dragon bit by bit applies well to financial planning. Using this approach, Devon Card, a certified financial planner, created a roadmap for a year, with each month dedicated to a particular area of finance. You can use it as a hint when thinking about your next planning steps.
