Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the stunning revelation from a Wall Street Journal investigative report that a substantial number of the Public Comments submitted against the Department of Labor’s fiduciary rule (and supporting its delay) were actually fake comments posted in the names of real people who didn’t even know their names had been used (and more often than not were actually in favor of the fiduciary rule as written). In the meantime, with the DoL fiduciary rule is delayed, New York’s Department of Financial Services has released its own proposed regulation to subject insurance and annuity agents in New York to a state-level fiduciary rule instead (after Nevada implemented a similar rule a few months ago). Also in the news this week was the release of updated “guidance” from the IRS clarifying that deducting a prepayment 2018 property taxes in 2017 is only permitted if the county had actually assessed (i.e., the homeowner had become liable for) the tax.
From there, we have investment related articles this week, from a look at the rise of “digital marketplaces” for alternative investments like iCapital and CAIS that aim to make it easier for independent uses to use alternatives, to a discussion of technology tools that are being developed to allow “direct indexing” (where clients own an index by using software to manage a portfolio of the underlying components of the index, without needing to pay a mutual fund or ETF), and a comparison of some of the most popular “model marketplaces” that gives advisors the opportunity to use third-party models by retain control of (and responsibility for) implementing the trades themselves.
We also have several retired planning articles, from an interesting discussion on the hazards of investing in the markets with the plan to buy “safe” (e.g., annuity) income later, Wade Pfau on strategies to manage sequence of return risk in retirement, and a discussion from Bill Bengen on how to monitor retirees’ ongoing current withdrawal rates to identify those who may be in trouble.
We wrap up with three interesting articles, all around the theme of the way our economy is being reshaped: the first looks at the rise of robots and automation in sectors that were previously thought to be less exposed (e.g., restaurants and hotels), finding that while some jobs may be eliminated, new ones are also being created, and the net job impact could actually still be positive; the second is an interesting 10-year retrospective look from the Cleveland Fed at the factors that led to the financial crisis, the impact of the aftermath, and how the Fed looks differently at the banking system and its risks today; and the last is a fascinating discussion of how in the past, local areas of economic opportunity could create “boomtowns” that attracted those in search of jobs and higher wages (e.g., Chicago grew from 30,000 people to over 2 million in just a few decades), but in today’s world interstate mobility is actually down, and the reason appears to be local housing policies in major metropolitan areas that have made it so expensive to move than people are not able to take advantage of the job opportunities there… which ultimately may help to explain why the U.S. has experienced more sluggish GDP growth in the aggregate over the past two decades!
Enjoy the “light” reading, and have a Happy New Year!
source https://www.kitces.com/blog/weekend-reading-for-financial-planners-december-30-31/?utm_source=rss&utm_medium=rss&utm_campaign=weekend-reading-for-financial-planners-december-30-31
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