January / February 2025 • www . fa-mag . com

Roths Don ’ t Always Make Sense You ’ ll have to do the math .

You ’ ve Been Breached . Now What ? In the future , we ’ re all going to be cyber-attacked .

N LATE DECEMBER , FINANCIAL ADVISOR MAGAZINE SENIOR WRITer Ben Mattlin penned an article on advisors ’ biggest wishes for 2025 . Topping the list was regulatory clarity .

Some advisors want a more sweeping fiduciary rule dictating the way financial advisors behave ; others are probably hoping the new Trump administration jettisons that rule altogether — as the White House did in Trump ’ s first term as part of his deregulatory agenda . But regulatory whiplash isn ’ t helping anyone .

Over the last decade , the U . S . has had four separate administrations , and it ’ s safe to say the regulation of investment advice didn ’ t rank among their top 25 priorities . That ’ s a serious problem , given that many aging Americans are being left to fend for themselves when it comes to retirement .

The stability of Social Security looks increasingly precarious , and few politicians are even talking about it . If they continue to ignore it , recipients can expect a benefit cut of about 23 % in 2024 .

One alternative proposed late last year by the American Enterprise Institute would be to cap the maximum benefit at $ 2,050 , leaving the system solvent and the most dependent recipients whole . Yet high earners who waited until 70 or thereabouts could see a 40 % cut in benefits and would likely feel shortchanged .

As it happens , better financial education for the average American has also come in near the top of advisors ’ wish lists for 2025 . Advisors whom I speak with often report that they are surprised by the level of ignorance or information gaps among even the most well-educated clients , including physicians and other professionals who they ’ d expect to be fluent in financial basics .

Last year the American Enterprise Institute proposed a dramatic solution to Social Security ’ s funding woes : Capping the maximum benefit at about $ 2,050 , which would leave the system solvent and the most dependent recipients whole .

KNOWLEDGE FOR THE SOPHISTICATED ADVISOR

The Personal And The Digital Joseph Coughlin on AI and advisors .

CHANGE IN WASHINGTON AND THE WORKPLACE

As 2025 begins , investors will be looking at AI , deregulation and the bond market .

Technology is a wild card for financial advisors as fintech and artificial intelligence grow in influence . Fintech is helping advisors with their productivity , though there ’ s still a question about how much new robo-advisor variants will challenge and compete with them . Robos were once seen as an existential threat , but more often they ’ re seen as an advice vehicle for investors who were unlikely to seek out human financial advisors in the first place .

AI is still an unknown . An increasingly powerful tool , advisors are likely using it to enhance operational efficiencies and client communications , and in the next few years it ’ s likely to grow even more sophisticated .

But if AI can develop new life-saving drugs faster than a scientist , can it also write wills and construct outperforming portfolios better than a human advisor ? Maybe or maybe not , but my past experience suggests many clients , including younger clients of the future , are still going to want human advice .

Evan Simonoff

Email me at esimonoff @ famagazine . com with your opinion .

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