Advisors See Clients Benefiting From Tax Reform; Clients Not So Sure

A big majority of financial advisors expect their clients to benefit from recently enacted tax reform, but investors are not so confident this will happen, according to a study commissioned by Jefferson National, Nationwide’s advisory solutions business.

The sweeping tax overhaul passed in December “is anticipated to have winners and losers across the financial services landscape,” Craig Hawley, head of the advisory solutions business, said in a statement.

“Our research shows that despite advisor optimism, investors are less confident, so RIAs and fee-based advisors are taking action to clear up the complexity and develop proactive strategies for clients at every level, from the ultra-high net worth to the mass affluent.”

The Harris Poll conducted an online survey from Jan. 3 to Feb. 21 among 508 registered investment advisors and 464 broker-dealers, as well as 827 adult investors.

The results showed that 79% of RIAs and fee-based advisors were already adapting their approach to tax-advantaged investing in response to the tax reforms.

Still, taxes continue to be complex, and can be one of the biggest investment expenses a client will pay, when their federal and state taxes are combined.

Advisors this year rated taxes among clients’ top three financial concerns over the next 12 months and among the top three macro factors that will most adversely affect clients’ portfolios over that period.