Insurable Interest Canadian Insurance Blog

What You Need to Know Some people do enjoy paying extra taxes. Most do not. Thoughts about tax bills could affect long-term care planning strategy. Question 1: From a financial planning perspective, which is the better option: Buying a long-term care policy or self-funding that expense? Question 2: When you gave that answer, did you consider the tax consequences for the cost basis, which is the original price paid for an investment? Answer: Planning ahead by buying a long-term care policy means your client doesn’t have to worry about which accounts to spend down and which to preserve, or about the capital gains implications. Fritz Ehrsam, a financial advisor in Bel Air, Maryland, handles this issue by asking his clients to think about these questions: What are the tax consequences if you need to pull money out of your brokerage account to pay the thousands and thousands of dollars for a long-term care event? What happens to the taxation of your taxable investments as a result of the potential future step-up in basis? If a long-term care policy is providing a stream of income, there should not be a need for forced investment liquidations to cover care expenses. “If my...

Continuous learning: Just as Jedi training is ongoing, encourage AI to learn from its past outputs and user feedback. Adjust your prompts based on its evolving capabilities. Human oversight: While AI is a valuable tool, it still needs a watchful eye to ensure quality. Review and fine-tune AI-generated content, ensuring it meets your standards and remains true to your intentions. Your role as an AI user, guided by the wisdom of George Lucas, is to wield AI tools creatively and responsibly, ensuring your content achieves the desired impact. 3. Bad Content Is Going to Proliferate, Just Like Bad Sci-Fi Movies Lucas noted that when something new emerges, it often gets abused, leading to a flood of poor-quality imitations. The same phenomenon can be observed in the realm of AI content generation. As AI tools become more accessible, the internet is inundated with subpar content produced by automated systems.  In the world of finance, just as in the Star Wars universe, the proliferation of substandard content is detrimental. Clients and prospects are inundated with generic, uninspired content that lacks originality and insight. To stand out, financial advisors must embrace AI to enhance their creativity, not as a shortcut to replacing it. ...

Eric Clarke, who founded Orion Advisor Solutions 24 years ago, retired as CEO earlier this month. But that doesn’t mean he’s stopped looking ahead at how Orion will help advisors use artificial intelligence in useful, ever-more sophisticated ways. AI will be “incorporated into the client experience … [and] double or triple the number of households each advisor is able to serve concurrently,” Clarke forecasts in an interview with ThinkAdvisor. Clarke launched Orion at age 26. Unable to find certain technology off the shelf while working at his family RIA, he put together a plan to create a company for advisors that, in 1999, would become Orion Tech. Before retiring at 50, he led Orion to provide thousands of independent advisory firms with advanced integrated technology. It now administers $3.8 trillion in client assets. Clarke guided seven major acquisitions from 2018-2022, including those of Brinker Capital and Redtail Technology. Reflecting on his career, his proudest achievement, he says, is “enabling thousands of advisors to leave brokerage firms and go out as true fiduciaries with the technology they need to serve a significant number of households at scale.” Clarke is enthusiastic about the growing trend of behavioral finance among advisors because “it...

The end of each year brings many tax planning opportunities for financial advisors and their clients, and according to Jeff Levine, Kitces.com’s lead financial planning nerd and Buckingham Wealth Partners’ chief planning officer, late 2023 is no exception. Speaking during a tax-focused webinar a few days ahead of Thanksgiving, Levine said there was a lot for financial advisors and their clients to be grateful for this year, even with some big lingering challenges in the markets and questions about what 2024 may bring. Inflation, while high, has slowed, and retired investors can now reliably source higher-yielding income portfolios with less risk. As Levine noted, some tax planning considerations apply each year, from taking the correct required minimum distributions to ensuring proper withholdings on earned income and investment returns. However, there are also unique items to consider in any given calendar year that depend on recent market movements, anticipated government actions and individual clients needs. According to Levine, the end of 2023 represents a particularly active time when it comes to tax mitigation considerations, due in no small part to the friendlier markets and to anticipated changes in tax laws that will take effect with the sunsetting of key provisions of the Tax Cuts and Jobs Act...