Weekend Reading For Financial Planners (January 3–4)

RIA Leaders: Advisor Movement, Service Expansion, More M&A Key Themes For 2026

(Alex Ortolani | WealthManagement)

2025 was an eventful year for RIAs, with key headlines including a positive (though at times volatile) year for markets, the continued rapid pace of Mergers and Acquisitions (M&A) activity, and firms looking to boost their organic growth in a competitive wealth management space. Looking ahead to the coming year, RIA executives have these and several other themes on their minds.

When it comes to market performance, 2025 was positive for RIAs in two ways: overall strong returns lifted client portfolios (alongside AUM-based revenues), while market volatility early in the year might have led many consumers to seek out an advisor to help them navigate a rapidly changing environment. While the calmer market environment experienced in the second half of the year was positive for returns, it could make some clients complacent (perhaps leading them to consider whether they need an advisory relationship) and encourage some individuals to remain 'DIY' investors. Which could encourage some firms to demonstrate how they offer ongoing value that goes well beyond investment management (perhaps reminding clients through regular touchpoints).

RIA leaders also see industry movement as a key theme for 2026. On the business side, the brisk pace of M&A activity is expected to continue, including the possibility of acquisitions of even larger firms in the coming year. For advisors, leaders expect the flow of advisors from the wirehouse and independent broker-dealer channels to remain solid and also have found increased movement of advisors between RIAs to be an emerging trend (perhaps leading some firms to play 'defense' in terms of employee retention while also going on the 'offense' to bring in new talent).

A focus on firm operations is also expected to be a major theme for RIAs in the coming year, according to these firm leaders. For the largest firms, this could mean ensuring they have attractive technology, compliance, and marketing programs to attract advisors and acquisition targets (as well as the infrastructure to integrate these new additions). At the same time, other firms might consider whether they want to build out their operational capabilities internally (or perhaps outsource certain functions) or potentially seek to combine with a larger firm or an advisor platform (allowing them to spend more time on client service).

Overall, while 2025 was a fruitful year for RIAs in many aspects, firm leaders are facing key decisions that could allow their businesses to remain robust as the industry and market environments evolve, whether in terms of improving the client (and advisor) experience (to improve retention in both areas), boosting organic growth, or streamlining firm operations.

Only One-Quarter Of Advisors At Least "Very Satisfied" With Tech Stacks: Survey

(WealthManagement)

While financial planning involves significant human-to-human interaction, technology can play a valuable role in both streamlining firm operations and enhancing client service. However, financial advisory firms vary in their tech adoption, with some taking a forward-leaning approach to upgrading software within key categories (e.g., CRM, financial planning) and adopting software in emerging areas (e.g., advice engagement), others taking a more cautious approach, relying on an established tech stack, and still others staking out a middle ground (perhaps balancing the hard-dollar costs and time needed to learn new software with the ability to translate time savings from software to improved client engagement).

According to a survey of 241 financial advisors by WealthManagement, only 25% of respondents said they were "very satisfied" with their firm's overall use of technology (and an even smaller 2% saying they were "completely satisfied"), with 60% reporting being "somewhat satisfied", 11% "not very satisfied" and 2% "not at all satisfied". These results are largely consistent with our own are a modest 7.3 out of 10 (and satisfaction with integrations averages only 6.4 out of 10).

Given the broad dissatisfaction, it is perhaps unsurprising that advisors do appear to be interested in upgrading their tech capabilities, with 61% responding that these investments are an "important priority" for 2026 (with 13% labeling it as the "highest priority"). Though advisors aren't necessarily looking to invest more, per se, but to get more out of the spending they're already putting towards tech; as a result, only 29% of respondents indicated that they would increase their tech budgets by at least 5% (with advisors overall reporting an estimated mean change of 3.3%, roughly in line with cost increases simply due to inflation).

In terms of tech categories of focus for 2026, advisors most frequently highlighted CRM (34%), financial planning (32%), portfolio management and reporting (29%), digital marketing and prospecting (25%) and digital workflow automation (24%). Advisors also appear interested in investments in Artificial Intelligence (AI) tools, reporting that they plan to spend an average of 5.2% of their tech budgets on AI-enabled tools this year. The most common areas to address with AI tools included streamlining routine administrative and operational workflows (cited by 50% of respondents), summarizing research materials, reports, and market insights (42%), analyzing CRM and client data to identify insights and segment audiences (39%), and automating or personalizing client and prospect communications (38%).

In sum, while advisors surveyed don't appear to be particularly enthusiastic about their firms' tech stacks, they (or their firms) appear to be interested in identifying potential areas to upgrade, albeit primarily by swapping out existing software with more effective tools rather than increasing their overall technology spend. Though given the very real switching costs of learning new software and migrating data, the question at least arises: do most advisors really need to change technology providers, or is there opportunity to spend the same amount of time (often dozens of hours or more for a tech migration) investing into learning and training better on the software they've already got instead?

House Passes INVEST Act, With Implications For Regulation Of Smaller RIAs, Investor Access To Private Markets

(Sam Bojarski| Citywire RIA)

While financial advisors typically look to the Securities and Exchange Commission (SEC) for regulatory guidance, the laws that form the structure around agency regulation come from Congress itself. And a piece of legislation that has now passed the U.S. House of Representatives could have regulatory implications for firms and investors alike.

The INVEST Act, which combined several individual pieces of legislation, passed the house by a 302-to-123 vote and will now head to the Senate for consideration. One part of the legislation requires the SEC to study its definition of 'small entity' and whether it aligns with the Federal Regulatory Flexibility Act and the recent growth of the financial markets, given that RIAs currently must manage $25 million or less in assets to qualify for this status (which can provide some relief when it comes to implementation of certain regulations). If the INVEST Act becomes law, the SEC study would be followed by a rulemaking process.

Also in the legislation is a measure to expand who can qualify for "accredited investor" status, which gives these individuals access to private funds and certain other often-complex investment vehicles. Currently, accredited investor status is based on meeting certain income or wealth thresholds; the new legislation would allow individuals with certain licenses and educational experience (to be determined by the SEC), as well as those who pass an exam (that would be created) to qualify for this status.

While it remains to be seen whether this legislation will advance through the Senate (notably, the small entity portion of the legislation appears to be much less controversial than the measure to expand the definition of accredited investors), the INVEST Act could provide regulatory relief to a greater number of RIAs who would qualify as 'small entities' and could reshape the way investors engage with private investments (perhaps highlighting the role interested advisors could play in helping clients evaluate whether a particular vehicle is a good fit for their portfolio?).

What Is Modified Adjusted Gross Income Now?

(Lewis Braham | Barron's)

When it comes to income taxes, there are several important definitions of income, including taxable income, Adjusted Gross Income (AGI), and Modified Adjusted Gross Income (MAGI), with thresholds often applied to these levels for determining eligibility for certain deduction or other opportunities. Notably, while the One Big Beautiful Bill Act (OBBBA) includes several key thresholds, the definition of certain income types is unclear.

For instance, OBBBA raised the maximum deduction for State And Local Taxes [SALT] from $10,000 to $40,000 for those filing jointly, but only if their MAGI doesn't exceed $500,000 (with a phase-out region between $500,000 and $600,000). A question that has arisen, though, is what types of income qualify for MAGI. Because while MAGI typically takes AGI and adds back in normally tax-free items like municipal bond income, some tax experts reading the new tax law believe muni income won't be included for relevant parts of OBBBA. While the IRS usually issues guidance on such matters, then suggested regulations with a public comment period, and finally formal rules, it has yet to issue guidelines or final regulations for how OBBBA should be interpreted for MAGI (perhaps due in part due to the government shutdown).

Which means that taxpayers will be left waiting to determine the exact types of income that will be included for MAGI as it relates to OBBBA provisions (which could make a significant difference, whether in terms of the SALT deduction or other parts of the law involving a MAGI threshold, including the deduction for qualified tips and qualified overtime compensation), and that advisors could potentially offer clients hard-dollar value by keeping abreast of developments in IRS guidance (and perhaps manage client income accordingly) to ensure they can take full advantage of potential OBBBA deductions.

Coordinating QCDs With RMDs In The New Year

(Laura Saunders | The Wall Street Journal)

For retirees with 'traditional' (i.e., pre-tax) IRAs, Required Minimum Distributions (RMDs) can represent a significant source of taxable income in retirement (for those with particularly large account balances, these RMDs could exceed their spending needs and push them into a higher tax bracket than they would have been in otherwise).

One way to reduce the size of these RMDs (and the potential tax burden a client faces) is to engage in Qualified Charitable Distributions (QCDs), which allow individuals who are at least age 70 1/2 to give up to $111,000 (for 2026) to charity directly from an IRA. Not only can QCDs reduce the size of future RMD obligations (by reducing the account balance used in RMD calculations), but also, for those who have reached their required beginning date for RMDs, reduce the amount of ordinary income realized in a given year (e.g., if an individual has a $20,000 RMD obligation but makes $20,000 in QCDs, they won't realize any ordinary income from the RMD).

A common mistake that individuals make, however, is not timing IRA withdrawals and QCDs appropriately. Because the first dollars distributed from an IRA in a given year (whether to an individual's bank account, as a QCD, or otherwise) are counted towards satisfying their RMD obligations, interested individuals will want to make their desired amount of QCDs before reaching their RMD amount through cash distributions or in-kind transfers to a taxable brokerage account. For instance, if an individual with a $40,000 RMD distributes this amount from their IRA to their bank account in January and then makes $10,00 of QCDs later in the year, $40,000 will be treated as ordinary income since it came out of the account first (though the QCD still reduces the size of the account for calculation of future RMDs). If the individual made the $10,000 QCD first, they would only be required to distribute an additional $30,000 from the IRA (which would be treated as ordinary income for tax purposes) to fulfill their RMD obligation.

Ultimately, the key point is that while individuals typically give to charity for altruistic reasons, financial advisors can help ensure they receive the maximum tax benefit possible (perhaps allowing them to give more?), including by coordinating QCDs with other IRA withdrawals as they relate to RMDs (perhaps representing a useful early-year talking point for advisors with clients who have RMD obligations!).

Navigating The Capital Gains Bump Zone: When Ordinary Income Crowds Out Favorable Capital Gains Rates

(Nerd's Eye View)

While long-term capital gains have had preferential tax rates for most of their history (and receive similar treatment in most developed countries around the world), they are subject to not just one, but a series of tiered preferential rates, from a 0% rate for those in the lowest tax brackets, to 15% for those in the middle, and 20% for the highest earners (albeit still a "deal" relative to a 37% top tax rate on ordinary income). Plus a 3.8% Medicare surtax that stacks on top of a portion of the 15%, and all of the 20%, long-term capital gains rates.

The significance of this phenomenon is that, similar to ordinary income tax rates, generating "too much" in capital gains can drive the household up into higher capital gains tax rates. And because capital gains income stacks on top of ordinary income, even just increasing ordinary income can effectively crowd out room for preferential long-term capital gains rates.

In fact, the interrelationship between ordinary income and long-term capital gains creates a form of "capital gains bump zone" – where the marginal tax rate on ordinary income can end out being substantially higher than the household's tax bracket alone, because additional income is both subject to ordinary tax brackets and drives up the taxation of long-term capital gains (or qualified dividends) in the process.

For instance, individuals who would normally be in the 12% tax bracket may face marginal tax rates as high as 27% due to the capital gains bump zone. And upper-income households eligible for the 35% tax bracket may face a marginal rate of 40% as the top capital gains tax bracket phases in. The effect can be even worse for retirees who also claim Social Security benefits, where the combination of phasing in Social Security benefits, and driving up long-term capital gains to be subject to the 15% rates, can trigger a marginal tax rate of nearly 50%(!) for a household otherwise in the 12% ordinary income tax bracket!

As a result, it's crucial to consider the coordination of long-term capital gains with ordinary income, and the phase-in of Social Security taxation. For those with negative taxable income, it is generally still appealing to do partial Roth conversions at a marginal tax rate of 0%. But for others in the bottom tax brackets, it may be preferable to harvest 0% long-term capital gains instead (and not do partial Roth conversions that will undo the 0% rate on those capital gains!). Higher-income individuals may prefer to once again do partial Roth conversions in the 22% and 24% brackets, or even the 32% bracket… while avoiding the additional capital gains bump zone that occurs in the 35% bracket.

The bottom line, though, is simply to understand that with seven ordinary income tax brackets, plus four long-term capital gains brackets (with the 3.8% Medicare surtax), tax planning and evaluating marginal tax rates is a function of not just the ordinary income or long-term capital gains rates themselves, but also the interrelationship of the two and the indirect but substantial tax impact of adding more ordinary income when there are already substantial long-term capital gains stacked on top!

How Does A Cryptocurrency Allocation Interact With A 60/40 Portfolio?

(Stephen Margaria | Morningstar)

Very few assets have generated as much attention and debate in recent years as cryptocurrencies, which have often paired eye-popping cumulative returns with significant volatility. While investing in cryptocurrencies previously came with friction (e.g., the decision of whether to use an exchange, a hardware wallet, or another method to hold the cryptocurrency), the introduction of "spot" ETFs for Bitcoin, Ether, and now several other cryptocurrencies has made investing in these assets much easier (for advisors and their clients alike). A key question remains for those interested, though, how an investment in cryptocurrency might interact with other assets in a portfolio.

Looking at rolling one-year standard deviations since 2016, Bitcoin and Ether have been 8 and 12 times more volatile on average than a portfolio consisting of 60% stocks and 40% bonds (notably, the volatility of these cryptocurrencies has declined over time, though it still remains significantly higher than a 'baseline' 60/40 portfolio). Nonetheless, because few clients are likely to invest their entire portfolio in cryptocurrencies, deciding what portion of the portfolio to allocate to these assets becomes an important consideration. Margaria finds that while an allocation of up to 5% of a portfolio's value to a 50/50 combination of Bitcoin and Ether (with the dollars used to buy the Bitcoin or Ether coming from the investor's equity investments) has overall volatility that is 1.3 times that of a baseline 60/40 portfolio, going beyond this level greatly heightens volatility (with a 25% allocation leading to twice the volatility of the baseline portfolio). At the same time, because the cryptocurrency allocation also lifts total returns (e.g., the 5% allocation led to 12.1% annual portfolio returns since 2016, compared to 7.10% for the baseline 60/40 portfolio), some clients might be willing to accept more volatility for the potential return boost.

Given that accessing the return boost that cryptocurrencies have previously provided comes with the risk of significant drawdowns, investors and advisors might wonder whether rebalancing could serve to mitigate volatility. Margaria finds that rebalancing can be effective in reducing maximum drawdowns, though it comes with the tradeoff in dampening total returns, with a portfolio that allocates 5% to a 50/50 mix of Bitcoin and Ether with annual rebalancing achieving double the returns of a monthly rebalancing strategy (with annual rebalancing only having slightly lower total return than a buy-and-hold strategy, which comes with significantly higher drawdowns). Looking at measures of risk-adjusted returns, annual rebalances had the highest Sortino Ratio, while quarterly or semi-annual rebalances had the best Sharpe ratio.

Ultimately, the key point is that while cryptocurrencies are unique in many aspects, like other assets, the decision to invest in them depends on an investor's risk tolerance and portfolio objectives, among other factors. Which makes financial advisors well-placed to help clients determine whether an allocation to cryptocurrencies might be appropriate and, if so, select an allocation that fits their unique preferences and goals!

A Bitcoin ETF Doubled Its Value. Its Investors Made Only One-Fourth Of That

(Jeffrey Ptak | Morningstar)

The introduction of 'spot' cryptocurrency ETFs has made investing in these assets much simpler. Like other investments, though, an individual investing in one of these ETFs will achieve a particular return based on when they invested in an ETF and the dollar amounts initially invested and added over time.

Ptak finds that while the popular iShares Bitcoin Trust ETF has earned a 46% annualized return since its January 5, 2024 inception (through November 26, 2025), investors' average dollar (i.e., accounting for the timing and magnitude of the purchases and sales they made during the period) 'only' gained 11.2% during this timeframe. Part of the reason for this discrepancy appears to be due to the timing of returns and the availability of the ETF, which gained more than 65% during its first 66 days (alongside a spike in the price of Bitcoin), a time when it wasn't approved for use on some of the major direct brokerage or financial advisor platforms. Notably, investors in the ETF appear to be staying put, with the ETF receiving positive net flows on 80% of trading days since inception (suggesting that market timing isn't likely the primary cause of the difference between the fund's total return since inception and the return of the average dollar invested).

In the end, investments in cryptocurrency ETFs face a similar issue to investments in other asset classes in that price gains can sometimes be concentrated in a short period of time. Which perhaps serves as a reminder for investors to 'stay the course' with their chosen portfolio allocation (in addition to being an example of the axiom "past performance doesn't predict future results", as the gains experienced in a previous period for a particular fund might not reoccur in the future!).

Why Bitcoin Might Not Be A Suitable Replacement For Gold In Investor Portfolios

(Richard Bernstein | Advisor Perspectives)

Bitcoin has sometimes been referred to as "digital gold", with some observers citing its potential to serve as a diversifying asset during periods of market uncertainty, one of the reasons investors include an allocation to actual gold in a portfolio (another possible similarity is the relatively limited and inelastic supplies of both Bitcoin and physical gold). The question, though, is whether Bitcoin's price activity has performed similar to gold.

In terms of correlations, Bernstein finds that rather than being highly correlated (which would suggest that Bitcoin has many of the same return characteristics that investors seek in physical gold), during the five years ending September 30, 2025, the two assets had a 0.00 correlation (which suggests that, rather than moving in the same direction, gold and Bitcoin could serve as diversifying assets for each other?). Another way to compare the two assets is to determine the factors that drive their price movements. Bernstein finds that Bitcoin performance appears to be driven by liquidity in the overall economy (with returns highly correlated to those of high-yield bonds, which tend to perform better during periods of high liquidity), whereas physical gold seems to be driven by economic uncertainty (with a high correlation to the National Federation of Businesses Uncertainty Index).

In sum, Bitcoin doesn't currently appear to be a substitute for physical gold for investors looking for an asset with similar performance drivers and characteristics (though, given that Bitcoin has existed for fewer than two decades, it's possible this could change over time). And while investors might have a wider range of reasons to invest in one or both of these assets, advisors can play a valuable role in helping them identify the performance characteristics that have come to fruition.

How To Stick To Your New Year's Resolutions

(Dimitrios Tsatiris | Psychology Today)

While making New Year's Resolutions is a common activity, actually sticking with them often ends up being harder, whether because they fall to the back of one's mind amidst other tasks or because the hurdle seems so steep that it feels easier to move on to another priority.

For those looking to make a New Year's resolution that will 'stick', a first step is to set the bar low, perhaps by setting intermediate targets on the way to achieving a larger goal (e.g., while being able to run a marathon might seem like a distant goal, moving from running one mile at a time to three miles will be more achievable in the short run and help build momentum to the more challenging target). Following through on a New Year's resolution can also require patience. Given that fulfilling many resolutions requires incremental progress over a long period of time, being willing to accept setbacks (particularly if it's a new activity or practice) can help overcome perfectionist tendencies. Relatedly, giving oneself grace and practicing self-compassion can help individuals get past the inevitable bumps in the road that arise on the path to a challenging goal. Finally, bringing in an accountability buddy to help keep the resolution on track (as it's harder to slack off when someone's watching!).

Ultimately, the key point is that New Year's resolutions are not short-run, all-or-nothing endeavors. Rather, making incremental progress and having patience with oneself can ultimately increase the chances that the resolution will be completed (and that the process will be more enjoyable along the way)!

New Year's Resolutions For Financial Advisory Clients

(Steve Garmhausen | Barron's)

There is no shortage of potential New Year's resolutions, from living a healthier lifestyle to organizing the various parts of one's life. Another common category for these resolutions is personal finance, with many potential options for individuals to choose from, whether they want to get the basics 'right' or to finally take on a task they've been putting off.

For instance, individuals might resolve to review (or create) an estate plan, a task that's easy to put off and not particularly enjoyable but could be incredibly valuable if certain contingencies were to occur during the year. Individuals (particularly those who feel they might be in a precarious employment situation) could also (re)assess their liquidity needs and determine if their cash holdings and portfolio are positioned accordingly. Another potential resolution is for an individual to review their Investment Policy Statement (IPS) to remind themselves of their investment principles and to stay true to them throughout the year (or, if they don't have one, create an IPS to help prevent ad hoc portfolio changes throughout the coming year). Also, revisiting a list of one's financial goals can both help keep an individual focused on their long-term aims and give a chance to revise or add new ones as their circumstances change.

Notably, financial advisors are well-positioned to help with these resolutions, whether it's proactively helping a current client review their estate plan or showing a prospective client how an alternate portfolio allocation could help them meet their short-term liquidity needs and long-term goals. By serving as an accountability partner, advisors can help ensure that their clients follow through on their resolutions (given that many individuals implementing New Year's resolutions on their own eventually forget or give up on them) and ultimately achieve their financial goals!

11 Daily Habits For Success In The New Year

(Adam Grant | CNBC)

When trying to accomplish a New Year's resolution or other major goal, one might assume that big leaps of progress are the key to achieving these objectives. However, Grant argues that small, daily habits can lay the foundation for finding success in the new year, or any time.

One key habit is to actively seek discomfort, not for its own sake, but rather to try new things that might not work out. Similarly, setting a "mistake budget" of the minimum number of mistakes to make per day or week can be a good way to ensure an individual is pushing their boundaries. Another way of thinking about this is that while it can be tempting to pursue perfection, sometimes it's acceptable for certain work to be good enough (if perfection is even possible).

Beyond setting personal standards, individuals who find success often empower others as well. This could come through teaching (which has the positive effect of reinforcing the information for oneself) and seeking to open doors for people who are underrated or overlooked (which could provide a talent advantage to one's team).

In the end, success isn't necessarily about individual acts of greatness, but rather the culmination of small 'wins' that emerge from taking chances, being willing to make mistakes, and keeping an open mind for one's hidden talents (and those of others)!

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We hope you enjoyed the reading! Please leave a comment below to share your thoughts, or send an email to [email protected] to suggest any articles you think would be a good fit for a future column!

In the meantime, if you're interested in more news and information regarding advisor technology, we'd highly recommend checking out Craig Iskowitz's "WealthTech Today" blog.