Institutional investment management has undergone some changes with the recent reform of the U.S. tax code.

The organizational investment management and portfolio asset allocation strategies in place before the landmark 2017 tax bill’s passage may no longer be appropriate today. As a result, financial planning experts recommend that business owners revisit their benefit-planning strategies.

institutional investment management & tax reform

It is also imperative that your employees take the time to identify how the Tax Cuts and Jobs Act may affect their individual financial-planning strategies.

Will Tax Reform Affect Your Investment Management Strategies?

Fortunately, for most businesses, the sweeping tax reform bill did not significantly affect employee benefit plans. However, it is important to consult with a financial planning professional to determine what changes, if any, you should make to your retirement plan.

As for your overall investment management strategy, this is a good time to review your portfolio’s asset allocation and make any recommended changes. Some provisions of the tax reform may affect deferred compensation plans and maximum allowable tax deductions for pass-through entities. This is especially important if you are a small-business owner.

Will the Tax Bill Affect Your Employees’ Retirement Income Planning?

Some market watchdogs predicted that the tax bill would compel the conversion of defined-contribution plans (i.e., IRAs and 401(k) plans) to a Roth IRA-type structure — which the media termed “Rothification” — in a misguided attempt to raise government revenue.

Had this been the case, income would be subject to taxation prior to funding the investment plan. Fortunately, that provision did not end up in the final version of the bill.

Consequently, the tax bill does not appear to affect individual retirement planning significantly for most Americans. Nevertheless, we recommend that individual employees talk with their financial advisor about how they may be affected.

Discuss Tax Reform with Your Investment Management Specialist

At Divergent Wealth Advisors, our Certified Financial Planners™ understand your potential concerns regarding the tax reform legislation and how it may affect your company’s benefit plan.

This is also a good time to talk with us about potential upcoming volatility in the financial markets, and how it may affect your personal and institutional investment portfolios. Taking proactive steps today can help protect your investments if any significant market losses occur.

For your valued employees, our participant services are designed to provide the guidance they need to prepare for retiring and managing their personal wealth.

Contact the personal and institutional wealth management specialists at Divergent Wealth Advisors today to learn more about our unique approach to financial planning. Our highly personalized services are tailored to the unique needs of each client while keeping investment costs as low as possible. Contact us today to schedule a consultation with an institutional investment management specialist.

DISCLAIMER: It is important to note that this information is not meant to provide investment, tax, legal or accounting advice. This material is for informational purposes only, and is not intended to provide, and should not be relied on for, investment, tax, legal or accounting advice. You should always consult your own financial planning, tax, legal and accounting advisors before engaging in any transaction.

Approved by Rick Collins, Divergent Wealth Advisors LLC, Chief Compliance Officer 3/19/2018