Weekend Reading For Financial Planners (July 4–5)

Author: Adam Van Deusen, CFP

Team Kitces

Adam is a Financial Planning Nerd at Kitces.com. He previously worked at a financial planning firm in Bethesda, Maryland, and as a journalist covering the banking and insurance industries. Outside of work, he serves as a volunteer financial planner and class instructor for local and national non-profits.

Read more of Adam’s articles here.

IRS: Contributions To Trump Accounts Within Safe Harbor Don't Require Gift Tax Returns

(Kevin Matz | Wealth Management)

One of the more surprising features of last year's One Big Beautiful Bill Act (OBBBA) was the introduction of a new type of retirement account intended to be opened and contributed on behalf of minor children, which the law named the Trump Account (TA). Conceptually, the purpose of these is to give kids a head start on saving for retirement, and these accounts can be opened and funded beginning on July 4th.

A key issue though, given that TA beneficiaries are subject to significant restrictions on the ability to receive distributions during the "growth period" (i.e., the period ending before January 1 of the calendar year in which they turn 18), is that IRS Code Section 530A (that governs TAs) is silent regarding whether contributions to TAs by parents or others would be treated as completed gifts (as gifts of future interest in property must be reported on a gift tax return because they aren't eligible for the annual gift tax exclusion).

However, this week the IRS issued Revenue Procedure 2026-25, which provides a safe harbor for taxpayers, allowing those who meet all of its requirements to avoid having to file a gift tax return for TA contributions. The requirements include that the taxpayer must be an individual, that contributions must be made in cash (i.e., cash, check, money order, or electronic funds distribution), that the total gifts to the individual (including TA contributions) don't exceed the annual gift tax exclusion amount ($19,000 for 2026), that contributions to TAs don't generate a gift or Generation-Skipping Transfer Tax (GSTT) liability for that year (after application of the taxpayer's remaining applicable credit amount against the gift tax, or remaining GSTT exemption), and that no gift tax return is required to be or is filed for that calendar year by or on behalf of the taxpayer (whether for GSTT, portability, or other purposes).

In sum, the IRS revenue procedure appears to lift a potential administrative hurdle for those considering contributions to TAs for their children or others. That said, those considering contributing to these accounts (perhaps in consultation with their financial advisor) might consider how TAs stack up compared to other methods of building savings for future generations (e.g., taxable custodial accounts or 529 plans) on measures such as flexibility and ultimate after-tax proceeds before deciding whether (and how much) to contribute to them.

SEC Advances Proposal To Make Electronic Delivery Default For Financial Documents

(Kenneth Corbin | Barron's)

For many financial advisors and other financial professionals, one of the least enjoyable parts of the job is dealing with the paperwork required to compliantly keep clients informed, including a current requirement to send (physical) paper unless clients opt in to electronic delivery. Which would seem to be an anachronism at a time when electronic documents are ubiquitous elsewhere in life, but has long been a sticking point for when much of the country didn't have stable access to broadband internet, and remains an issue today for a subset of senior or lower-income consumers who are still materially less likely to use or have consistent access to computers or at least a secure internet connection.

The default for documents could change, however, as the Securities and Exchange Commission (SEC) has advanced a proposal that would potentially set as the default electronic delivery of financial documents (rather than paper). Which would ostensibly preserve the ability of those who don't have good access to computers to still be able to receive paper copies, but they would have to proactively request it. While exact details of the proposal are not yet public, it's expected to enable investment advisers, asset managers, and others sharply reduce the amount of paper sent to clients (as often paper delivery remains simply because clients didn't get around to taking the step to receive electronically, even if they otherwise would have been willing to).

The proposal now sits with the White House Office of Management and Budget (OMB) for review, which would be followed by a public comment process. Industry groups would likely be supportive of the proposal (with the Investment Adviser Association and the Investment Company Institute [which represents asset managers] both expressing support for defaulting to e-delivery). Potential opponents of the proposal could include consumer advocacy groups such as the Consumer Federation of America (which has argued that e-delivery could make it easier for financial firms to hide important disclosures concerning issues such as fees and conflicts of interest), Congressional representatives still concerned about the impact of older investors (who might not be as adept at handling e-documents and might not recognize their ability to still receive paper copies), and the printing industry (which would stand to suffer if the quantity of prospectuses and other financial documents printed in hard copy were reduced).

In the end, while it remains to be seen whether the SEC proposal will be adopted, and/or whether it might still require certain important disclosures to be paper-printed-and-delivered, it signals another push by the SEC under Chair Paul Atkins to relax regulatory burdens and their associated costs on firms the regulator supervises. Which could ultimately lead to less time and money spent on printing documents by RIAs, and less time during and after the onboarding process of trying to get and remind clients to opt into electronic delivery (though many [particularly those with less tech-savvy clients] might still make clear to clients that paper copies are still available, to ensure that clients have the opportunity to review key disclosures within them?).

"Purpose Of Wealth" Frameworks Becoming Increasingly Popular Amongst HNW Clients: Survey

(Leo Almazora | InvestmentNews)

When it comes to estate planning, much advisory work focuses on transferring assets to future generations (and charities) in line with a client's wishes and in a tax-efficient manner. Another issue that appears to be gaining attention amongst high-net-worth individuals, though, is the question of influencing how inherited money and charitable assets are stewarded by the next generation.

According to a survey of 126 family office principals and executives by AITi Tiedemann Global and Campden Wealth, 48% of respondents have begun implementing a clearly defined approach to the purpose or intended use of family wealth (up from 33% last year). Priorities amongst those who are creating such frameworks (which can address family wellbeing, generational continuity, philanthropy, and community impact) include providing guidance to the rising generation (cited by 65% of respondents), giving the family wealth meaning beyond preservation (61%) and a desire to reduce family conflict and disagreement (54%). However, this appears to be a top-down affair for many wealthy families, with just 17% of respondents reporting that rising generation members are very engaged in defining or updating the family's purpose of wealth (with 41% somewhat engaged).

Ultimately, the key point is that many wealthy families appear to be looking beyond the efficient transfer of assets to linking wealth to family goals. Which could offer financial advisors the opportunity to bring the idea of "money mission statements" into estate planning conversations (with clients across the wealth spectrum who are planning to leave money to heirs perhaps interested in this topic), perhaps also offering an opportunity to engage with next-generation family members as well (who stand to one day inherit and could become clients themselves).

Updated Research Shows Why Retiree Spending Patterns Could Resemble A 'Smile' Or A 'Smirk'

(Dinah Wisenberg Brin | ThinkAdvisor)

Helping retired clients determine how much they can sustainably spend from their portfolio is a key service for many financial advisors. A helpful input for working on this question can be how a client's spending might change over the course of retirement. For instance, previous research has identified the "go-go, slow-go, and no-go years" where retirees might particularly active early on (perhaps spending more on travel and activities) before slowing down as their physical capabilities become more limited, and eventually relying more on health care support in their later years. Retirement researcher David Blanchett a decade ago described this concept as a "spending smile", where real (i.e., inflation-adjusted) retiree spending decreases slowly in the early years, more rapidly in the middle years, and then less slowly in the final years.

In a new research paper that leverages more recent data from the Health and Retirement Study, Blanchett confirms that, on the whole, retiree spending doesn't increase annually with inflation (though individual retiree's experiences will vary). He notes that this real decline in spending occurs for both those with relatively modest means (who might be forced to reduce spending if they deplete their assets) as well as those who are relatively well off (suggesting that while they might have the means to spend more, they don't).

Blanchett also found that the "spending smile" appears to persist for the average retiree, driven in part by high healthcare-related spending costs for certain retirees (e.g., a prolonged long-term care event) that brings mean spending up. Notably, the median retiree appears to demonstrate a "spending smirk" where real spending continues to decline throughout retirement (as the median is impacted less than the average by outliers with very high late-life healthcare spending). He concludes that given the tendency for retirees' real spending to decline as they age, they could potentially benefit from higher initial withdrawal rates (allowing them to spend more in their 'go-go' years) compared to a model that assumes they will maintain inflation-adjusted spending throughout retirement.

In sum, while each retiree's circumstances will be different, Blanchett's findings that real spending tends to decline throughout retirement suggest that retirees (especially those with relatively more assets) might have more flexibility in their retirement spending (including early in retirement, when they might be inclined to spend more anyway) than they might assume. Which could be supportive of advisors in helping clients achieve their retirement goals while drawing down their portfolio in a sustainable manner (while still being aware of the potential for a high-cost long-term care event down the line).

Planning For The Possibility Of A 'Lost Decade'

(Amy Arnott | Morningstar)

While there have been several market downturns over the past 15 years, the recovery from them to new highs has typically been a matter of months rather than requiring several years. Which has meant relatively little disruption to many retiree's income plans. Nonetheless, many might fear the prospect of a 'lost decade' (i.e., where stocks fail to generate positive returns over an extended period) and what it would mean for the sustainability of their spending plan.

On the plus side, since 1925 there have only been two major periods where rolling 10-year U.S. stock market returns have been below zero (in nominal terms), during the Great Depression and, much more recently, during the one-two punch of the dotcom bust and the financial crisis of the 2000s. Altogether, nominal 10-year rolling returns for stocks were negative approximately 4.6% of the time. Notably, when considering inflation-adjusted returns, the period between 1964 and 1976 enters the picture, as while nominal returns were positive during the period, high inflation led to negative real returns.

Given the potential for a future 'lost decade' to eat into a retiree's spending sustainability (particularly if they are unlucky enough to retire near the beginning of one of these periods), several tactics could be considered to protect against it. To start, implementing 'realistic' withdrawal rates can prove protective (e.g., even if the stock market might return 9% over the long-term, a negative sequence of returns could make such an initial withdrawal rate unsustainable). Also, asset diversification can provide a measure of defense against an extended downturn in one particular asset class (e.g., Morningstar found that portfolios with 50% to 70% in bonds and cash allowed for the highest starting safe withdrawal rates for investors seeking a 90% probability of success over a 30-year retirement period). Other potential strategies include 'bucketing' (i.e., setting aside cash to cover expenses for a certain period so risk assets don't have to be sold during a downturn), Treasury Inflation-Protected Securities (TIPS) ladders (which can be designed to cover spending needs while other assets are invested for growth), or implementing a more flexible approach to retirement withdrawals (which can allow for higher initial withdrawal rates but require a willingness to reduce spending if the portfolio balance decreases).

In the end, while 'lost decades' are relatively rare, preparing for the possibility of such a period in the future can help retired clients avoid a potential sharp (and perhaps permanent) reduction in their spending ability. Nevertheless, doing so doesn't necessarily require strict austerity, but rather can benefit from an advisor's touch in crafting and managing appropriate portfolio strategies and retirement income strategies that meet their client's preferences for spending flexibility.

Helping Clients Grasp Abstract Retirement Income Strategies With Historical Market Visualization

(Derek Tharp| Nerd's Eye View)

For many financial advisors, a core part of the retirement planning process involves simulating whether the client's assets will last through retirement. Traditionally, these simulations take the form of either Monte Carlo analyses – showing the percentage of simulated outcomes in which the client finishes with assets remaining – or stress tests that assess plan durability under a handful of adverse scenarios. Yet while these tools offer mathematical metrics, they often fall short in helping clients connect the numbers to their real lives. The reality is that most people struggle to make confident decisions based on abstract reasoning. Although the numbers might work out mathematically, clients still need to do the mental work of translating the numbers on the page into something that feels tangible and real – something they can imagine actually living through.

One way that advisors can help bridge this gap is by using Historical Market Visualization (HiMaV) as a more intuitive alternative for illustrating retirement income strategies. HiMaVs leverage the brain's natural preference for narrative and visual information by showing how a retirement income plan – such as a risk-based or guardrails-based strategy – would have fared during actual historical periods like the Great Depression, Stagflation of the 1970s, or the 2008 Global Financial Crisis. With reliable data from more than a century of market history, advisors can anchor planning scenarios in real events that clients may already be familiar with through lived experience or cultural memory.

What works about HiMaV is that it grounds financial projections in a story-based context. Rather than modeling a generic environment of below-average returns and above-average inflation, advisors can show how the same dynamics played out during a known time period – making the scenario more accessible and relatable. For example, when clients can see how their plan might have fared during a historical market downturn they already recognize, it becomes easier to imagine how they might respond and adapt. That emotional connection supports confidence and increases the likelihood that the client will stick with their plan and stay committed through both good markets and bad.

Retirement planning, then, isn't just about getting the math right to work out between the client's desired spending level and their income and assets available, nor is it about achieving the highest Monte Carlo score. It's about developing a dynamic spending plan (e.g., a guardrails-based strategy that adjusts spending levels if the client's portfolio either exceeds or drops below specified thresholds) that clients can understand, trust, and follow consistently. HiMaVs support this process by showing how those strategies would have played out in real-life historical scenarios, helping clients grasp when and why spending adjustments might have occurred.

Ultimately, the key point is that retirement income planning is not just about statistics – it's about helping clients believe in their plan. HiMaVs give clients a powerful lens through which to view their strategy, transforming abstract probabilities into lived, relatable experiences. And when clients feel grounded in the history of what's come before, they'll be better equipped to navigate the uncertainty of what lies ahead!

4 Non-Obvious Metrics For RIAs To Track To Evaluate If Their Marketing Is Working

(Kendra Wright | LinkedIn)

Many financial advisors make an investment in marketing, whether in terms of 'hard-dollar' costs (e.g., paid advertising or hiring marketing professionals) or 'soft-dollar' expenses (e.g., the time advisors spend creating content). Which means that firms will want to see a return on this investment and track metrics that actually move the needle

Wright suggests that advisors looking to determine whether marketing investments are driving revenue can start by establishing (and tracking) baseline and stretch revenue goals (e.g., going beyond "we want to grow this year" to say "we want to add $400,000-$600,000 in new revenue this year") to provide clarity on what success actually looks like. One specific metric she suggests tracking is average client value (in terms of revenue), comparing it to previous years, which can show firms whether their marketing is resulting in higher-revenue clients (which can allow growth to compound over time). Another valuable data point is to determine the percentage of new leads that are qualified (as an increase in leads resulting from a marketing tactic might not pay off if they wouldn't be good-fit clients for the firm). Finally, defining Key Performance Indicators (KPIs) with clear, measurable objectives (e.g., "50 new Google reviews" versus "Get more Google reviews") can both help determine what marketing tactics might be of most value in the first place and whether, after implementing them, they are successful.

Altogether, given the investment that goes into advisor marketing, using key metrics targeted at a firm's specific goals (whether it's client growth, moving 'upmarket', or otherwise) can help determine whether it's receiving a sufficient payoff for the time and dollars put into it (and perhaps show whether a change of course might be necessary).

Deciding Whether To Outsource Marketing Or Keep It In-House

(Design At Work)

Most financial advisors aren't marketing professionals themselves. Nevertheless, engaging in marketing to attract new clients (whether by seeking referrals, creating content, managing the firm's online presence, or other tactics) is an important part of running a growing firm. Which can create a challenge in deciding whether to keep marketing in-house (perhaps by giving an employee marketing responsibilities, or, for firms with sufficient financial wherewithal, hiring a dedicated marketing professional or team) or outsourcing marketing responsibilities to an external agency.

Keeping marketing in-house can be attractive because it gives a firm greater control over the marketing process and leverages its greater knowledge of its brand voice and values (compared to an external partner who would have to learn these to represent the firm well). However, doing so can take time away from other firm functions (if responsibilities are divided amongst one or more team members) or come at a hard-dollar cost if the firm hires one or more team members to take on marketing responsibilities on a part- or full-time basis.

Leveraging an external agency can both provide an advisory firm with time savings for its team members and can allow the firm to tap into an agency's expertise across multiple areas of marketing (e.g., content creation, web development, and search engine optimization). An external agency can also tap into its experience working with other firms in the industry and offer innovative marketing ideas advisors might not have considered. Of course, this expertise comes at a price, suggesting that firms that go down this path will want to track key success metrics to understand the return they receive on this investment.

Ultimately, the key point is that while either in-house marketing or working with an external partner (or perhaps a hybrid approach where an in-house marketing professional manages multiple external sources of expertise?) can work, it's up to firms to determine the balance of time and hard dollars they want to invest in marketing (as well as the level of control they want to maintain over it) and select an approach accordingly.

Your Marketing Isn't Failing – It Just Doesn't Have An Owner

(Crystal Butler | Advisor Perspectives)

Many discussions surrounding advisor marketing involve the ins and outs of different marketing tactics, from nurturing client referrals to creating content that attracts good-fit prospects. However, a particular tactic (or a firm's broader marketing strategy) won't be effective if it isn't actually executed upon. Which suggests that having a 'point person' to ensure that the actions needed to make a firm's plan work are completed. And while larger advisory firms might be able to afford to hire an in-house marketing professional (or team), the burden for smaller firms often falls to someone who already has plenty of non-marketing tasks on their plate.

For a solo advisor, marketing tasks (e.g., writing a blog post or engaging with target prospects on social media) can sometimes feel secondary to the more immediate concerns of current clients. Which can eventually lead to large gaps in published content or other chosen tactics. Advisors in this position might decide whether they want to focus on marketing themselves (e.g., by setting aside specific time during their day or week to follow through on their marketing plans) or perhaps hire an external marketing partner (which can save time, though does come with a hard-dollar cost). Notably, even if a solo advisor does look to engage an external marketing partner, they will still maintain some 'point person' responsibilities, including reviewing, approving, and providing input (in a time-sensitive manner) to the output created by the partner.

Advisor teams have the benefit of sharing responsibilities when it comes to marketing. Nonetheless, having a designated 'point person' can be valuable to ensure that team members actually follow through on their designated tasks and that success metrics are tracked. Butler suggests that such a person will want to have, among other traits, sufficient bandwidth to take this task on, be detail-oriented to ensure marketing output is high quality, and understand the compliance obligations related to the firm's marketing program (notably, these traits apply whether a firm decides to keep marketing in-house or use an external partner, as in the latter case they will serve as a 'bridge' between the firm's vision and consistent execution).

In the end, a marketing strategy is only as good as its execution, which suggests that determining who within the firm will be responsible for ensuring that needed tasks are completed (and perhaps tracking whether particular marketing tactics are successful) can increase the chances that plans will actually come to fruition (and lead to actual client and revenue growth!).

The Showy Science Of Fireworks

(Kendra Redmond | American Physical Society)

A hallmark of Fourth of July celebrations is the fireworks display, wowing young and old alike (and, from an economist's perspective, representing one of the ultimate 'public goods', as it's hard to exclude someone from watching them and one person's 'use' of it doesn't take away from another's). While fireworks have a history going back millennia, modern touches have enhanced their excitement.

The first firecrackers were found in ancient China (perhaps appearing in the first or second century BCE). When bamboo was thrown into a fire, the buildup of steam caused the stalk to explode with a loud crack. With the invention of black powder around the ninth century, fireworks expanded to create louder bangs and flashes of light. Over the coming centuries, firework technology expanded with the use of twisted paper fuses and gunpowder-propelled rockets, which allowed for the aerial displays seen today.

One of the favorite features of fireworks displays is the vibrant colors they can produce. These are created by adding small bits of metals or other compounds to firework shells. For instance, red fireworks are made by adding strontium salts, orange comes from calcium, yellow from sodium, and green from barium. Notably, blue is the hardest color to achieve, requiring copper chloride to be heated to a precise temperature (which suggests that the quality of a fireworks display can be judged in part by the purity and brightness of its blue effects).

Sound effects are part of the experience as well (though perhaps not so positively for some dogs and young children), with the trademark 'booms' created by combining large shells with tightly wrapped fireworks containing flash powder. The 'whistling' effect of other fireworks is created by pressing a special mixture into one end of a long, narrow tube or rocket, with an empty cavity and small opening above it. The fast burn rate of the mixture excites the tube's resonance, generating the distinctive whistling sound. Still other fireworks offer a 'crackling' sound, created when fireworks contain many encapsulated micro-particles or granules that rupture when heated, creating this signature sound.

Altogether, while fireworks have a long legacy, more modern scientific innovations (from automation and sequencing to color, shape, and sound types) keep viewers coming back for more (and provide fodder to impress friends with your newfound fireworks knowledge this weekend!).

The Science, Techniques, And Recipes To Elevate Your Grilling

(Matt Moore | The Art of Manliness)

A summer weekend is a great time to get out the grill and prepare tasty meats, vegetables, or other items for friends and family. But with many options to choose from in terms of grill types, fuels, and techniques, looking into the 'science' of grilling can be instructive.

The distinctive look, smell, and taste of 'browned' food comes from a process called the "Maillard reaction", in honor of French chemist Louis-Camille Maillard who, in the early 1900s, discovered that once temperatures begin to reach and exceed 300 degrees Fahrenheit, food experiences the benefits of browning (e.g., a rich, caramel-like, umami flavor). Notably, this effect doesn't just apply to grilled food, but also breads, roasted coffee, and beer with malted barley. Given the benefits of exposure to high temperatures, pre-heating the grill, drying ingredients (to avoid steaming the food), and not overcrowding the grill (which can skew the heat and moisture ratio) can all lead to a better grilling experience.

A key decision when it comes to grilling is to decide what fuel to use. Many grilling purists prefer dried, natural hardwoods (e.g., hickory or mesquite) for grilling, though this fuel source can be inconvenient for amateur grillers, as it can be time consuming (requiring dry, accessible wood and a period of burndown to produce coals for grilling). For those who want a more convenient way to get wood flavor, grills that use wood pellets could be an attractive alternative (though these grills can be costly and require an external power source). Other grillers might use charcoal, which is created when wood is heated in an environment without oxygen, creating a 'lump' that can be lit quickly and reliably reach high temperatures (with some purists preferring 'lump' charcoal over the 'briquette' alternative, which come with additives and produce a significant amount of ash). Finally, gas offers a convenient fuel source with precise temperature control, though this method doesn't come with the natural flavor-enhancing ability of wood products.

In sum, grilling offers the opportunity for a customized experience, allowing the cook to decide how they want to balance cost, taste, and convenience. Which can ultimately lead to a more enjoyable day for both the person standing behind the grill and those who benefit from its output!

How To Choose And Use Sunscreen

(Alisha McDarris | REI)

A holiday weekend often means a trip to the pool or beach. While being outside on a sunny day can be a great way to relax, it also can involve exposure to the sun's rays, which have the potential to cause painful burns in the short run and could lead to aging skin or skin cancer in the longer term. While it's common knowledge that sunscreen can be used to prevent some of the negative effects of sun exposure, choosing the 'right' option for one's needs can be a challenge given the variety of types and brands available.

Sunscreens generally fall into two categories, mineral (which create a physical barrier that reflects the sun's rays, often appearing white when applied) and chemical (which absorb ultraviolet [UV] rays to protect skin from sun damage). In terms of types of applications, options include creams or lotions, solids, and sprays. While each of these can be effective, it can be valuable to balance convenience with coverage (e.g., sprays can be easier to apply than other types, but it can take care to ensure all areas are covered). When looking for a sunscreen, finding one that offers protection from both UVA (which is associated with aging effects) and UVB (which is associated with sunburn) wavelengths is often recommended by experts.

One of the common data points on sunscreen packaging is its SPF, or sun protection factor, which measures how much UV radiation it takes to redden the skin through generously, evenly applied sunscreen as well as how long a sunburn is delayed compared with the damage from UV rays on unprotected skin. As SPF increases, so does protection from sunburn, though it's not an even progression (with SPF 100 only blocking 6% more UV than SPF 15) and the Food and Drug Administration recommends reapplying sunscreen every two hours, regardless of its SPF rating. Other best practices for effective sunscreen use include applying it comprehensively (to avoid uncovered spots), doing so at least 15 minutes before going outside (as it can take time for the sunscreen to be effective), and being particularly aware when sweating or spending time in the water (as these activities could call for more frequent reapplications).

Ultimately, the key point is that while sunscreen can be a helpful tool, care is needed to ensure its full benefits are achieved (notably, those headed outside can increase their protection by reducing the amount of skin exposed to the sun in the first place, whether by staying in the shade when possible or by wearing clothing with UPF-rated fabrics). Which can lead to happier days in the sun with fewer painful burns afterwards.

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.