Tratto da Forbes.com
President-elect Donald Trump is going to create a boom in the coffers of wealth management firms focusing on wealthy investors.
The wealth management business has historically been a very profitable one. Managing money for investors as well as providing additional services and products has consistently been financially rewarding for advisors and their firms. In fact, it is the most financially lucrative business model for financial professionals. This is even more the case for wealth managers who cater to high-net-worth clients. While the wealth management business has always been good, strong indications show that the potential for success will increase – possibly exponentially – under a Trump administration.
The proposed income tax cuts on the wealthy will put more money into their hands. A percentage of these funds will likely end up being managed by talented investment professionals. As most self-made millionaires are business owners, lowering the corporate tax rates will also give them additional funds. Also, a decrease in regulations is going to probably translate into lower costs and higher profits. While some business owners will end up reinvesting these monies in the firms, others will hand the funds over to wealth managers to invest.
If the estate tax is eliminated – as proposed by President-elect Trump – then a cohort of ultra-wealthy families will likely be on course to creating financial dynasties. Capable wealth managers can help them navigate this process in many ways. For those less affluent families, the abolition of the estate tax will translate into significant intergenerational opportunities for wealth managers.
The proposed Cabinet appointees also give support to a booming wealth management business. Based on their backgrounds and personal wealth, they are likely to be positively disposed to the financial services industry.
Although no one can, with certainty, predict how the tax code and regulatory environment will be changed or who will end up in the Trump Cabinet and what they will do, all the indications are that wealth managers who work with the wealthy will come out on top. While there is meaningful competition in the field, the smart, capable wealth managers can be confident that the near-term future is going to be a very profitable one for them.
Russ Allan Prince