Cattle

The 2025 OBBB created a new senior deduction that provides a $6,000 deduction for taxpayers who have reached age 65 by the end of the tax year. The senior deduction is available regardless of whether the taxpayer itemizes or elects to take the standard deduction.

The 2025 OBBB created a new deduction for "qualified passenger vehicle loan interest". The amount of the deduction is limited to $10,000 (not to be adjusted for inflation). The deduction phases out and is reduced by $200 for every $1,000 (or portion thereof) by which the taxpayer's modified adjusted gross income exceeds $100,000 ($200,000 for joint returns).

The OBBBA created a temporary deduction for overtime pay mandated by the Fair Labor Standards Act (FLSA) (overtime compensation paid above the taxpayer's normal rate). The deduction amount is limited to $12,500 for individual returns and $25,000 for joint returns. The deduction is allowable regardless of whether the taxpayer itemizes or takes the standard deduction.

The OBBB created a temporary deduction for up to $25,000 in qualified tip income (the $25,000 limit applies to both single and joint filers).[1] The deduction only applies for tips received in an occupation where tipping is traditional and customary.

Under the 2024 final RMD regulations, the surviving spouse will automatically be treated as the participant (without the need to make a special election) if all of the following are true:<br /> (1) the surviving spouse is the sole beneficiary, (2) the original participant died before their required beginning date and (3) the surviving spouse will receive payments under the life expectancy rule (rather than the ten-year rule).<a href="#_ftn1" name="_ftnref1">¹</a><br /> <br /> If the original participant died after their required beginning date, the surviving spouse must make a separate election to be treated as though they were that participant.<a href="#_ftn2" name="_ftnref2">²</a><br /> <br /> This election is only available when the surviving spouse’s first RMD would be in 2024 or later. If the original participant would have reached their required beginning date in 2024 or later, the spousal election is permitted.<br /> <br /> Whenever an election to be treated as the original participant is in effect, the Uniform Lifetime Table factor will be used to determine the amount of the surviving spouse’s RMDs up<br /> until the year of the surviving spouse’s death. Generally, this will result in smaller annual RMDs when compared to use of the Single Life Table.<br /> <br /> Also assuming an election to be treated as the original participant is in effect, upon the surviving spouse’s death, that spouse’s beneficiary must continue to receive distributions based<br /> on that spouse’s remaining life expectancy using the Single Life Table if the surviving spouse dies on or after the date they have begun to receive required distributions. The factor is determined using the surviving spouse’s remaining life expectancy in their year of death (based on age), and then reducing that by one for each subsequent year. The surviving spouse’s beneficiary has ten years to empty the account (i.e., they are not treated as an eligible designated beneficiary).<br /> <br /> The proposed regulations also propose that, although the spousal election allows the spouse to be treated as the participant for purposes of the RMD regulations, that treatment does not<br /> apply in all situations. It would, however, apply so that the spouse would not be subject to the 10% early withdrawal penalty for pre-age-59 ½ distributions. The surviving spouse’s RBD would also be determined by reference to the original participant’s age, rather than the surviving spouse. The proposed regulations also provide that when determining the account balance for RMD purposes, all amounts held in a designated Roth account and any other account under the plan are included for purposes of calculating the RMD for the year.<a href="#_ftn3" name="_ftnref3">³</a><br /> <br /> <a href="#_ftnref1" name="_ftn1">1</a>. Treas. Reg. §§ 1.401(a)(9)-3(d), 1.401(a)(9)-3(e).<br /> <a href="#_ftnref2" name="_ftn2">2</a>. Treas. Reg. § 1.401(a)(9)-5(g)(3)(i).<br /> <a href="#_ftnref3" name="_ftn3">3</a>. Prop. Treas. Reg. § 1.401(a)(9)-5(g)(3)(ii).

<p>Starting with the 2025 tax year, the SECURE Act 2.0 requires employers that establish new 401(k) or 403(b) plans to auto-enroll employees in the savings plans. </p><p>The minimum auto-enrollment contribution rate will range from 3% to 10%. Each year, the minimum contribution rate will then increase by 1% until the rate reaches 15%. </p><p>The IRS has released proposed regs confirming that there is no delay--meaning that new plans are currently subject to the auto-enrollment rule starting in 2025. The rules contained in the proposed regulations will be effective six months after the date that final regulations are published. In the meantime, a reasonable, good faith interpretation of the law is required. </p><p>The regulations clarify that there is no provision that excludes any class of participant from auto-enrollment, meaning that long-term part-time employees must also be automatically enrolled if they are otherwise eligible and the plan is subject to the rule. Participants with an affirmative election to opt out of auto-enrollment on file do not have to be automatically enrolled in the plan. The preamble to the proposed regulations clarifies that when plans did not automatically enroll participants who were already participating in the plan, yet did not make an affirmative election, they must automatically enroll the participant by the first plan year when final regulations are effective (presumably, 2027). The participant's default deferral rate must be calculated as though they had been auto-enrolled since 2025. </p><p><b>Under the law, small business employers who normally employ 10 or fewer employees and new businesses are exempt from the auto-enrollment requirement.&nbsp; The proposed regulations clarify that self-employed individuals, independent contractors and corporate directors do not count toward the&nbsp; 10-employee threshold (only common law employees must be included).</b></p>

<strong>by Robert B. Tamarkin</strong><br /> <br /> <span style="font-weight: 400;">October 25, 2024 </span><br /> <br /> <span style="font-weight: 400;">In the rapidly evolving financial landscape, independent RIAs hold a distinct advantage due to their agility. By embracing specific strategies, advisors in the world of independence can drive substantial growth.</span><br /> <br /> <span style="font-weight: 400;">At the core of the RIA model is the client, so any growth strategy must prioritize client needs. This approach benefits both clients and the advisory teams serving them. </span><br /> <br /> <span style="font-weight: 400;">Taking this into account, here are a few strategies that can help RIAs effectively drive growth and expand their footprint.</span><br /> <ol><br /> <li><b> Hire a digital marketing specialist</b></li><br /> </ol><br /> <span style="font-weight: 400;">The simplest strategies can sometimes yield the most significant results, particularly for RIAs focusing on digital marketing. Yet, a recent study indicates that many financial advisory firms allocate less than 1% to 2% of their revenue to marketing. </span><br /> <br /> <span style="font-weight: 400;">Despite marketing's growing importance, many advisors still rely on word of mouth. Hiring a digital marketing specialist can be a game changer for these firms, while inaction only guarantees missed opportunities.</span><br /> <br /> <span style="font-weight: 400;">A recent survey from Broadridge indicates that advisors are struggling more than ever with marketing due to limited time and expertise. Yet, many are finding success by adopting a personalized content approach and leveraging next-generation technologies like artificial intelligence to engage prospective and current clients. </span><br /> <br /> <span style="font-weight: 400;">The survey also found that 70% of U.S. advisors with a defined marketing strategy saw an increase in inbound requests in the past year, compared to just 44% of those without one. The translation here is this: Hiring a digital marketing specialist or allocating a budget for digital marketing efforts is one of the fastest ways for advisors to scale. </span><br /> <ol start="2"><br /> <li><b> Invest in a diverse team</b></li><br /> </ol><br /> <span style="font-weight: 400;">Increasingly, clients in wealth management span generations. Advisory teams should reflect this breadth of experience and perspective. Investing in talent isn't just about filling positions; it's about cultivating a team that can connect with and understand the distinct needs of each client segment.</span><br /> <br /> <span style="font-weight: 400;">To achieve this, RIAs should prioritize a mix of seasoned professionals and emerging talent. Experienced advisors bring invaluable insights and industry wisdom, while next-gen professionals infuse fresh ideas and a tech-savvy approach to client engagement. This combination not only enhances client relationships but also positions a firm for long-term success.</span><br /> <br /> <span style="font-weight: 400;">Recruiting a diverse team also fosters innovation and adaptability. A workforce that combines traditional expertise with modern perspectives is better equipped to navigate industry changes. Firms should also consider implementing mentorship programs that pair experienced advisors with newer team members. This collaboration can facilitate knowledge transfer, bolster confidence and create a culture of continuous learning.</span><br /> <ol start="3"><br /> <li><b> Lean into configurable technology and integrations</b></li><br /> </ol><br /> <span style="font-weight: 400;">Unlike the wirehouse model, independence allows for adoption of agile technology, which advisors should prioritize. This flexibility enables RIAs to integrate solutions rapidly, enhancing efficiency and scalability. A recent survey from Fidelity shows that firms embracing tech-related best practices report higher-than-average efficiency, stronger growth, better client experiences and increased advisor satisfaction.</span><br /> <br /> <span style="font-weight: 400;">According to the survey, tech-forward firms experienced a client growth rate of 20% compared to 8% for others and double the average assets under management growth rate (22% versus 11%). Additionally, advisors at "digitally empowered" firms reported higher career satisfaction (81% versus 59%), greater firm satisfaction (64% versus 44%), and higher average compensation ($489,000 versus $373,000).</span><br /> <ol start="4"><br /> <li><b> Build strategic partnerships</b></li><br /> </ol><br /> <span style="font-weight: 400;">Building strategic partnerships can enhance service offerings and remove barriers to growth. By collaborating with such specialists as CPAs, estate attorneys and other professionals, RIAs can provide a more comprehensive suite of services.</span><br /> <br /> <span style="font-weight: 400;">Clients increasingly desire a "family office" experience, where all their financial needs are managed under one roof. However, not every advisory firm has the in-house expertise to meet these diverse demands. This is where strategic partnerships come into play. </span><br /> <br /> <span style="font-weight: 400;">By creating a robust network of specialists, RIAs can offer clients access to tax planning, legal advice, estate planning and more — all while ensuring that they receive top-tier service.</span><br /> <br /> <span style="font-weight: 400;">Collaborating with experts in different fields also fosters a referral network that can lead to new client opportunities. For example, a CPA may refer clients to an RIA for investment management, while the RIA can direct clients to the CPA for tax-related matters. This reciprocal relationship strengthens both businesses and enhances the overall value provided to clients.</span><br /> <ol start="5"><br /> <li><b> Remember, agility Is your superpower</b></li><br /> </ol><br /> <span style="font-weight: 400;">Independence often goes hand-in-hand with an entrepreneurial spirit. This freedom allows advisors to make swift decisions that benefit clients and adapt quickly to market changes. Advisors should leverage this agility in time-sensitive environments, as competitors with different models may struggle to keep pace.</span><br /> <br /> <span style="font-weight: 400;">By embracing these strategies, independent advisors can grow their practices while providing exceptional value to clients, which remains at the center of the wealth management universe.</span><br /> <br /> <i><span style="font-weight: 400;">Robert B. Tamarkin is a founding partner and head of business development at Elevation Point, a firm that provides the resources and collaborative culture to help advisors build and grow their own businesses.</span></i><br /> <br /> <span style="font-weight: 400;">The original version of this story was published on </span><a href="https://www.thinkadvisor.com/"><span style="font-weight: 400;">ThinkAdvisor</span></a><span style="font-weight: 400;">.</span>

<b>by Kartik Srinivasan</b><br /> <br /> <span style="font-weight: 400;">September 25, 2024 </span><br /> <br /> <span style="font-weight: 400;">We're barely two years since ChatGPT was released to the public and there are already several artificial intelligence tools for wealth management in the market quickly gaining traction, with some attracting millions of dollars in funding.</span><br /> <br /> <span style="font-weight: 400;">What these developments should tell our industry is that "digital transformation" as a phenomenon comprises different aspects — be it a new technology, a more streamlined way of working, a new client demand — but regardless, once adoption begins, it spreads fast.</span><br /> <br /> <span style="font-weight: 400;">The question for advisory firms is, can you keep pace?</span><br /> <br /> <span style="font-weight: 400;">The answer is not only yes, you can — it is also a lot simpler than you think. To get started, focus on straightforward yet high-impact changes that will let you run your business more efficiently and deliver consistent levels of client service, while helping you grow faster, too.</span><br /> <br /> <span style="font-weight: 400;">I want to assure you that AI isn't going to replace advisors any more than robo-advisors did. What will eat advisor jobs, though, is the reluctance of firms to embrace constant and neverending improvement — the so-called CANI principle.</span><br /> <br /> <b>Embracing the Transformation</b><br /> <br /> <span style="font-weight: 400;">There are multiple benefits to your firm in embracing AI and the broader digital transformation beyond just staving off disruptive competition. Let's say you've swapped out a paper-heavy process with a digital-first automated approach, such as an online onboarding process. Instead of hours of paperwork and needing to come in person for signing ceremonies, your prospects can open and fund an account within minutes.</span><br /> <br /> <span style="font-weight: 400;">That's not only a tremendous amount of time saved for your business. Your advisors, administrative employees and those new clients are all happier because they had a convenient, simple experience instead of slogging through a dated process. Your operations team has less headaches to contend with, too, because the process was centered in one place and integrated with the custodian, so all the information was sent according to their set standards and virtually error-free. And as the firm principal, you are happier because your firm can serve more clients as a result.</span><br /> <br /> <span style="font-weight: 400;">Ultimately, you're solving problems for multiple people — maybe even before they realized they had an issue in the first place.</span><br /> <br /> <b>AI and Client Demand</b><br /> <br /> <span style="font-weight: 400;">AI is undoubtedly going to supercharge many of the practice management tools firms are using today. Prospects and clients pushed even the stodgiest firms to make virtual sessions standard even after the pandemic came to an end.</span><br /> <br /> <span style="font-weight: 400;">Soon, those same prospects and clients are going to have their own AI-powered assistants to handle their financial lives, including joining up with an advisor and monitoring their progress toward financial goals, and they'll expect your firm to be able to interact with those assistants. Without a modern technology foundation, your firm will not be able to win that client.</span><br /> <br /> <b>3 Starting Points</b><br /> <br /> <span style="font-weight: 400;">If you're wondering how to get that foundation in place, let me suggest some starting points that will produce quick wins in boosting efficiency and improving your client experience.</span><br /> <ol><br /> <li><b> Automate Your Onboarding Process</b></li><br /> </ol><br /> <span style="font-weight: 400;">One of the biggest time drains for advisors is client onboarding. By implementing automation tools that gather client information, send automated reminders, and streamline account setup, you can drastically reduce time spent on manual tasks. This gives advisors more time to focus on relationship-building rather than paperwork.</span><br /> <ol start="2"><br /> <li><b> Use AI to Enhance Client Communication</b></li><br /> </ol><br /> <span style="font-weight: 400;">AI-driven tools can help advisors stay ahead by automating routine client communications, such as portfolio updates or reminders of important financial dates. Personalized AI-generated insights can also provide clients with tailored financial advice, improving both engagement and client satisfaction with minimal effort.</span><br /> <ol start="3"><br /> <li><b> Automate Workflows</b></li><br /> </ol><br /> <span style="font-weight: 400;">Advisors often juggle many moving parts, from compliance paperwork to client check-ins. Workflow automation platforms can help by setting up automatic task reminders, managing deadlines, and triggering follow-up actions without the need for manual intervention. This allows your team to focus on higher-value work while reducing errors and oversight.</span><br /> <br /> <i><span style="font-weight: 400;">Kartik Srinivasan is President of Advyzon Institutional (www.Advyzon.com), a digital transformation company focused on building the most comprehensive tech platform for financial advisors and wealth managers.</span></i><br /> <br /> <span style="font-weight: 400;">The original version of this story was published on </span><a href="https://www.thinkadvisor.com/"><span style="font-weight: 400;">ThinkAdvisor</span></a><span style="font-weight: 400;">.</span>

<b>by Ryann Ramos</b><br /> <br /> <span style="font-weight: 400;">October 24, 2024 </span><br /> <br /> <span style="font-weight: 400;">I'll be honest; I stumbled into this industry accidentally.</span><br /> <br /> <span style="font-weight: 400;">In need of an internship during college, I found a company that met my meager requirements — a paycheck and flexible schedule that accommodated my other part-time jobs. The opportunity for innovation in the fintech sphere has captivated me ever since. </span><br /> <br /> <span style="font-weight: 400;">Now well into my career in financial technology, I've seen firsthand the distinct challenges that women face in this industry. With finance and tech both historically male-dominated professions, the pairing seems to amplify these challenges. </span><br /> <br /> <span style="font-weight: 400;">However, with some intentional efforts, I believe we can create more inclusive environments in fintech. </span><br /> <br /> <span style="font-weight: 400;">Here are some insights and strategies I believe will help empower women and help close the gender gap. </span><br /> <br /> <b>Understanding the Challenges</b><br /> <br /> <span style="font-weight: 400;">Women in fintech often find themselves in environments with few female colleagues. In fact, women hold fewer than 30% of fintech jobs globally and fewer than 5% of fintech founders are women. </span><br /> <br /> <span style="font-weight: 400;">Many of the root causes of the gender disparity in fintech can be traced back to the gender inequality in STEM (Science, Technology, Engineering and Mathematics) fields. This underrepresentation starts early, with girls often being discouraged from engaging in STEM subjects. And while we are making progress in these areas, the lack of representation is impactful, even at a young age. </span><br /> <br /> <span style="font-weight: 400;">The importance of diversity is increasingly recognized, but many companies still struggle to move beyond token gestures into taking meaningful actions. Workplace culture and unconscious bias play critical roles in perpetuating the fintech gender gap. This can manifest in various ways, such as gender-biased hiring practices, unequal pay and limited opportunities for career advancement. Which begs the question: How can fintech companies implement policies to support gender diversity?</span><br /> <br /> <b>Mentorship and Sponsorship</b><br /> <br /> <span style="font-weight: 400;">One of the best ways to include and support women in fintech is through mentorship and sponsorship. Mentorship offers access to experienced professionals who can share valuable insights, career advice and industry knowledge. This relationship can help mentees build confidence, develop skills and make informed career decisions. Young professionals can consider mentors as a sounding board and an advisor. </span><br /> <br /> <span style="font-weight: 400;">Sponsorship goes a step further, with a focus on active advocacy. This draws on senior leaders' visibility and influence to surface the capability and impact of their protégés, promoting them for key opportunities and ensuring that their voices are heard in important discussions. While formal programs can be beneficial, both mentorship and sponsorship can start informally, particularly in smaller organizations, as a safe place for women to share ideas and offer support. </span><br /> <br /> <span style="font-weight: 400;">Mentorship programs like Innovate Finance's Women in FinTech, which pairs women with experienced mentors in the industry, and networking groups like Women Who Code, which offer events, workshops and online communities for women in technology and finance, are great examples of external organizations put in place to help women succeed. These initiatives not only provide valuable support but also highlight the importance of diversity and inclusion in the fintech sector.</span><br /> <br /> <span style="font-weight: 400;">To build an effective mentorship and sponsorship program, fintech companies should:</span><br /> <ul><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Identify potential mentors and sponsors. Look for experienced professionals in your organization who are willing to invest time and effort in supporting emerging female talent.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Facilitate regular interactions. Create formal programs with regular check-ins and informal opportunities for interaction.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Encourage allies. Those in leadership positions should be encouraged to sponsor and mentor female colleagues, helping to amplify their voices and perspectives.</span></li><br /> </ul><br /> <b>Rethinking Networking Opportunities</b><br /> <br /> <span style="font-weight: 400;">If you work in fintech, you've probably been invited to play golf at a networking event. While golf can be great, reimaging networking so that women are not missing out on business opportunities simply because they don't play golf is a great step toward closing that gender gap. </span><br /> <br /> <span style="font-weight: 400;">Here are some options to help create more inclusive networking opportunities:</span><br /> <ul><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Think beyond golf. Organize networking events where women feel comfortable and included. Examples include workshops, seminars and social gatherings with activities that appeal to a broader audience.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Golf doesn't have to go! Instead, offer lessons and create environments where women feel welcome. Consider mixed-gender teams and ensure that the setting is inclusive.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Host events specifically for women in fintech. These can provide a supportive environment for women to network, share experiences and build professional relationships.</span></li><br /> </ul><br /> <b>Looking Within: Evaluation Is Key</b><br /> <br /> <span style="font-weight: 400;">Self-reflection is often the key to making change, and sometimes companies need to take a hard look at their internal practices to make improvements. To close the gender gap, fintech companies must assess gender distribution at various levels of the organization – from entry-level to leadership – and then identify any barriers preventing women from advancing and take actionable steps to address them. </span><br /> <br /> <span style="font-weight: 400;">They can do this by:</span><br /> <ul><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Regularly soliciting feedback from female employees about their experiences and suggestions for improvement.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Implementing changes based on this feedback and track progress over time.</span></li><br /> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Sharing the company's progress on gender diversity publicly to hold the organization accountable and inspire confidence among employees.</span></li><br /> </ul><br /> <span style="font-weight: 400;">TransferWise, now known as Wise, is a great example of a fintech company that has made significant progress in promoting gender diversity. The company has a strong focus on creating an inclusive workplace culture and has implemented various initiatives to support women in fintech. Wise has established employee resource groups, mentorship programs and leadership development opportunities specifically for women. The company even made a commitment to transparency in its diversity and inclusion efforts by regularly publishing diversity reports. </span><br /> <br /> <b>Promoting Women to Leadership</b><br /> <br /> <span style="font-weight: 400;">I have definitely seen an increase in female hires over the course of my career, but that increase does not seem to be translating to more women in leadership positions. Companies must be proactive in promoting women to management roles if we are to close the gender gap. This involves not only identifying high-potential candidates but also providing the necessary support and development opportunities needed for women to succeed in leadership positions like training, clear career paths, and equal opportunities and access to challenging projects.</span><br /> <br /> <span style="font-weight: 400;">Closing the gender gap in fintech requires creativity, perseverance and planning. By understanding the challenges, fostering support networks, promoting mentorship and sponsorship, rethinking networking opportunities and reviewing internal practices, we can create a more inclusive and equitable industry. I look forward to a time where everyone, regardless of gender, can thrive and succeed.</span><br /> <br /> <i><span style="font-weight: 400;">Ryann Ramos is a product owner, Trading &amp; Rebalancing at Advyzon, a comprehensive technology platform for financial advisors and investment managers. </span></i><br /> <br /> <span style="font-weight: 400;">The original version of this story was published on </span><a href="https://www.thinkadvisor.com/"><span style="font-weight: 400;">ThinkAdvisor</span></a><span style="font-weight: 400;">.</span>

<b>by David Blanchett &amp; Ross Riskin</b><br /> <br /> <span style="font-weight: 400;">May 30, 2024 </span><br /> <br /> <span style="font-weight: 400;">When it comes to tax and estate planning, perhaps the only thing that everyone can agree on is that it can get complicated and confusing very quickly. In a recent series of surveys that included over 2,000 financial professionals, only 13% of respondents felt very confident around their knowledge of tax planning strategies; only 5% of respondents felt very confident with respect to estate planning strategies.</span><br /> <br /> <span style="font-weight: 400;">One way to potentially bridge the knowledge gap and increase confidence, accessible both to clients and financial professionals, is to incorporate visual elements. We find that including visual aids and examples when explaining complex planning concepts and strategies can improve awareness and provide education. It also can lead to a dramatic increase in confidence, particularly among financial professionals who were not confident on a given topic</span><br /> <br /> <span style="font-weight: 400;">This is especially true for those who haven't been exposed to the concepts before or those whose encounters with these strategies may be few and far between depending on their current roles.</span><br /> <br /> <span style="font-weight: 400;">For example, 78% of respondents who noted that they were not confident about a series of tax planning topics, including the gain exclusion on the sale of a principal residence, the alternative minimum tax credit and tax planning considerations for different business entity types, indicated that they felt more confident after the concepts were explained in a webinar that highlighted visual examples.</span><br /> <br /> <b>Baseline Planning Confidence</b><br /> <br /> <span style="font-weight: 400;">To better understand financial professionals' comfort levels with tax and estate planning, a series of survey questions asked how confident they felt around various concepts.</span><br /> <br /> <span style="font-weight: 400;">In a total of five webinars conducted in 2023, we asked the financial professional attendees to rank their confidence levels in several tax and estate planning areas.</span><br /> <br /> <span style="font-weight: 400;">What emerged was a wide range of responses in terms of confidence. It is not surprising to see higher levels of confidence on tax planning, given that many of the financial professionals in attendance were CPAs. </span><br /> <br /> <b>Can Pictures Help?</b><br /> <br /> <span style="font-weight: 400;">To better illustrate how visual aids can help simplify complex information, let's discuss an estate planning strategy that has risen in popularity given the current high interest rate environment and potential reduction of federal gift and estate tax exemptions subject to tax laws sunsetting in 2026. </span><br /> <br /> <span style="font-weight: 400;">For high-net-worth and charitably inclined individuals, the use of a charitable remainder annuity trust has become appealing. The trust can be funded and set up to provide an immediate income benefit for either the donor or beneficiaries of the donor over either a set period of time or the lifetime of the beneficiaries, and the trust will pass through the remainder assets to a qualifying charity at the end of the trust term. </span><br /> <br /> <span style="font-weight: 400;">There are moving pieces involved for which a visual example can be used to better connect them to form a complete picture, such as:</span><br /> <br /> <span style="font-weight: 400;">How much of a charitable deduction the donor would potentially be entitled to claim for the transfer made to the trust ($192,776 based on a gift of $500,000 made to a 15-year trust using the April 2024 Section 7520 interest rate of 5.2%)</span><br /> <br /> <span style="font-weight: 400;">How much the donor or income beneficiaries would expect to receive on an annual basis ($30,000 annuity payments based on a 6% payment rate and a $500,000 gift)</span><br /> <br /> <span style="font-weight: 400;">How investing assets prudently within the trust might result in an even greater amount than was originally gifted being transferred to a qualifying charity to help satisfy the client's future philanthropic needs ($771,521 being transferred to a qualifying charity in 2039 assuming an 8% rate of return). </span><br /> <br /> <b>The Impact of Visuals on Confidence</b><br /> <br /> <span style="font-weight: 400;">In the original surveys, we provide context on a given tax or estate planning strategy to gauge how the financial professionals' confidence on the respective topic changes after being guided with visual elements.</span><br /> <br /> <span style="font-weight: 400;">Even excluding those who indicated they were confident or very confident — because the use of visual aids is unlikely to affect confidence levels as their perceived or actual need for these tools would be low — we can see an improvement in confidence, especially among financial professionals who were not confident, as well those who were only somewhat confident.</span><br /> <br /> <b>Conclusions</b><br /> <br /> <span style="font-weight: 400;">The use of practical examples of planning scenarios is nothing new — most textbooks and news articles are filled with them — but they are delivered primarily through the written word. Given that many people have a preference for visual learning, and are able to better recall information that was consumed visually over longer periods of time, it is not surprising that the use of visuals can increase confidence levels among financial professionals as well.</span><br /> <br /> <span style="font-weight: 400;">If the use of visual aids can increase confidence in the knowledge of a particular planning concept, advisors might be more likely to bring up said strategy in response to a prospect inquiry. They might even be more proactive in their advice delivery and seek opportunities to create educational moments that will resonate with the clients they serve.</span><br /> <br /> <span style="font-weight: 400;">David Blanchett is managing director and head of retirement research for PGIM DC Solutions, the global investment management business of Prudential Financial Inc. Ross Riskin is the chief learning officer at Investments &amp; Wealth Institute.</span><br /> <br /> <span style="font-weight: 400;">The original version of this story was published on </span><a href="https://www.thinkadvisor.com/"><span style="font-weight: 400;">ThinkAdvisor</span></a><span style="font-weight: 400;">.</span>