3 Financial Planning Trends to Look for in 2020

(StatePoint) The latest financial planning trends anticipated by industry experts will have important implications for consumers.

From new tech to new rules and regulations, here are three of the biggest trends to watch out for in the months to come, and what they mean for you:

1. More consumer protections. The recommendations and information you receive from your financial advisor may change if he or she is required to comply with new regulations and professional standards taking effect in 2020.

The U.S. Securities and Exchange Commission recently approved a new rule known as Regulation Best Interest (BI) that requires broker-dealers to recommend investments and other financial products that are in their client’s best interests. Broker-dealers must also fully disclose any conflicts of interest related to the investments and products they sell or recommend to their clients. All broker-dealers must comply with the rule by June 30, 2020.

New professional standards for certain advisors will also enhance consumer protections. The Certified Financial Planner Board of Standards (CFP Board), for example, recently adopted a new standard requiring CFP professionals to act as a fiduciary -- and therefore in their client’s best interest -- at all times when providing financial advice. CFP Board will begin enforcing this standard in June 2020, as well.

2. Streamlined technology. The continued development of financial technologies may lead many firms and advisors to adopt new tools that automate certain tasks in the financial planning process. For example, you may be able to communicate with your advisor, check your portfolio performance, manage your accounts and catch up on relevant financial news using a single online financial portal. Your advisor may also employ artificial intelligence and data analytics tools to help assess investment risk, conduct market research or execute trades, allowing them to spend more time taking a big-picture look at your finances and developing a comprehensive strategy to help you achieve your goals. 

3. More socially responsible investment opportunities. Heightened awareness of climate change and major social issues, coupled with younger generations’ desire to make a positive impact on the world, will likely lead to increased options for aligning your values with your investments. Socially responsible investing; environmental, social and governance investing; and impact investing, all present opportunities to earn financial returns while supporting social change. Your advisor can help evaluate your options in this area, including the risks and rewards of each investment type.

A CFP professional can help you understand and navigate these and other trends. To find a CFP professional near you, visit www.letsmakeaplan.org.

Staying up to date on financial news and developments will help you keep ahead of emerging trends.

Photo Credit: (c) ijeab / iStock via Getty Images Plus

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