Faced with these times of financial hardships and unsteadiness in the U.S. economy, it has become extremely important for people to plan their finances accordingly. Wealth management training can offer helpful skills for financial planners who are eager to help clients regain their financial stability. The recession has left many people confused and worried about their financial prospects. A financial planning course will inform you on how to work on and improve upon issues related to the recession, including unemployment, home prices, and tax diversification. Once informed on financial options, many people will be able to recover and plan for the future accordingly.

The recent recession has hit the US economy hard. According to the National Bureau of Economic Research Business Cycle Dating Committee (NBER), academic economists who settle on the beginning, end and scale of U.S. recessions, the 2007-2009 recession ended in 2009, 18 months after it began. The Bureau believes that an end to a recession does not indicate a healthy economy. In fact, they point out that the only declining economic factors that have ended are things like outputs and incomes. Approximately 7.3 million jobs were lost during the recession and cost Americans 21% of their net worth. It has also been recorded as the longest recession the U.S. has experienced since the Great Depression.
One of the main causes of the recession was the housing market crash, with the government oversupplying mortgages to unfit candidates. The result of that problem has been a dramatic reduction in the average home price. This is a good time for buyers in the market equipped with sufficient funds, but a terrible time for sellers, who will not regain what they have invested into their homes. According to a September 2010 WSJ article, “new home prices have fallen an average of 30%” from their previous peak. The article estimates that prices are expected to fall an additional 5-10%, resulting in approximately 40% of American homeowners with negative equity. For financial planners, this means an asset has now turned into a liability (and reduction of net worth) for the 40% who have negative equity. Wealth management training offers financial planners helpful insights on how to work on reworking lost assets for their client’s portfolios.

In hopes of finding alternative ways of obtaining assets for a client’s portfolio, planners experiment with tax diversification. When doing so, the advisor hedges client accounts by allocating assets across a range of accounts that are taxed differently. These include tax deferred accounts such as traditional retirement accounts and annuities to taxable accounts such as brokerage accounts and bank CDs to tax-free accounts such as a Roth IRA and Roth 401(k). By holding a variety of accounts with different tax characteristics, putting the right kinds of investments into each one and tapping them strategically, the advisor can maximize the client’s after-tax returns. Ideally, taxable bank and brokerage accounts are where living expense and emergency money derive from, especially during this time of economic instability. A financial planning course will teach you that tax-deferred and tax-free accounts are where the bulk of a client’s assets should be placed. In hopes of regaining financial stability, advisors work to manage and deliver clients with alternative sources of income and investments.

Author Bio: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about wealth management training, financial planning course, visit http://www.icfs.com.

Category: Finances
Keywords: wealth management training,financial planning course