Report highlights several key challenges for wealth professionals managing money south of the border in the next year
With the pandemic having already caused significant disruption – and in some cases, acceleration of change – for those tasked with helping wealthy people maximize their money, the recovery will be fuelled by renewed focus.
A new report examines five key societal changes that are refocusing the financial planning environment in the US.
The Northern Trust Institute’s Wealth Planning Outlook considers the shifting values of investors including business owners, executives, multigenerational families, and other wealth owners.
“This year’s Outlook explores significant developments fuelled by the COVID-19 crisis: a heightened awareness of purpose — whether fulfilling one’s personal potential or promoting one’s values through more deliberate investing and giving; a more profound sense of our own and our loved ones’ human fragility; and the startling embrace of technology by millions,” said Northern Trust Chief fiduciary officer Pamela Lucina.
The five main societal changes highlighted include:
- Reinventing Retirement – Shifting perspectives on “retirement” are leading many to rethink this stage of life, with more people finding fulfilment in a second chapter or direct investment venture.
- Planning for Tax Uncertainty – Though it faces an uncertain future in the Senate, the Build Back Better Act proposes several significant changes to the tax code. The underlying uncertainty stresses the need to build flexible plans that can adapt to changing circumstances.
- Creating Value from Values – The rapid evolution of ESG investing and philanthropic giving vehicles is driving increased interest among investors in aligning their portfolios with their values. But there continues to be challenges with doing so effectively and measuring the impact of these investments.
- Preparing for Disability – Mental illness, already on the rise prior to the pandemic, has increased dramatically in the last two years. The uncertainty associated with mental health and disability can have very real implications for financial planning. Preparing for the possibility ensures estate plans fully contemplate the complexity of these conditions.
- Protecting Digital Assets – The proliferation of digital assets and blockchain technology presents several estate planning challenges that demand attention to ensure executors and loved ones have access to the information they need, as well as the assets themselves.
The full report is available at northerntrust.com/wealthoutlook
