Blog: Millionaires Want to Talk Taxes


This week, President Trump has been celebrating the successes of his first year and touting how much better America is today than a year ago.  One of the largest achievements of his first year has been tax reform.  But despite the President’s rambunctious rhetoric, not all Americans are convinced that tax reform will be beneficial for them.

In research recently completed by Spectrem Group, we found that 42% of investors are supportive or very supportive of tax reform.  Twenty-two percent are uncertain.  More than half (54%) of wealthy investors under the age of 35 are uncertain about the impact of tax reform.  Young investors were, however, more likely to be positive than negative about tax reform (30% vs. 17%).   Nineteen percent of all wealthy investors view tax reform somewhat negatively and 17% view tax reform very negatively.  It’s unclear if those individuals who feel negatively regarding tax reform have specific reasons or if it is just the animosity they feel towards this administration.

When asked about the impact of tax reform on their own household, more than a third of respondents indicated that their taxes would decrease.  Forty six percent of those under the age of 35 indicate their taxes will decrease.  Seventeen percent of all investors felt their taxes would remain the same and 20% are uncertain of what will happen.  Thirty percent felt their taxes would increase.  This was particularly true of households with more than $5 million of net worth (36%).

Half of investors (49%) will be reaching out to their financial advisors to discuss the impact of tax reform.  This means that financial advisors need to be aware of the impact of the new laws on various types of households… will it impact their investment portfolio?  What types of changes should they make?  Those investors between the ages of 52 and 70 are the most likely to be asking for their financial advisor’s advice (52%).

Each month Spectrem asks investors what they would like to discuss with their financial advisor.  While the stock market is generally the top choice (48% this month), tax reform is a topic that at least 30% of investors are looking to their advisor to discuss with them.  This means it’s time to reach out with information and examples via blogs, newsletters, Twitter or whatever type of communication an advisor may use with his or her clients.  Millionaires, Baby Boomers and female investors are the most likely to be seeking this advice.

Tax reform is confusing and investors are looking to professionals to identify the impact it will have on their household.  While it’s easy to defer this topic to the accounting industry, investors are more likely to want to understand how tax issues impact their investments.  That means it’s up to financial advisors to proactively address this topic.