Clients who are fed up with high state income tax rates might consider a move to another jurisdiction with lower tax rates or no income tax at all, but advisors are cautioning them to consider other factors, including higher property or sales taxes, as well as other costs or lifestyle changes a move might entail. No-tax states are funding citizen services somehow, so advisors recommend talking to clients about the holistic impact of a move, touching on other forms of taxes, as well as issues like out-of-state sources of income, cost-of-living differences, and distinct considerations facing retirees and families with school-age children.
In other most-read wealth management articles this week:
CalSavers survives. Now that the U.S. Supreme Court has declined to review a lower-court ruling affirming California’s state-run retirement plan, the legal challenge to CalSavers appears to be over. While an antitax advocacy group had sought to overturn the plan, which requires all but the smallest businesses to offer some type of workplace retirement plan, the courts concluded that federal law does not pre-empt CalSavers, leaving the program in place.
Onramp CEO takes off-ramp. Tyrone Ross, the co-founder and CEO of Onramp Invest, a crypto asset platform, is leaving the company. Declining to go into detail on the reasons for his departure, Ross indicated that he had a different vision for the company’s future than fellow co-founder Eric Ervin, who says his “team is laser-focused on providing RIAs the foundational tools they need to add a cryptoasset proficiency to their practice.”
Think before you sell. In a white-hot M&A market for registered investment advisor firms, some practice leaders might feel the exits calling and worry about missing out on a sky-high valuation. But experts caution firm owners to slow down and think about what’s motivating them to sell, whether a more modest move like a partial sale would make sense, and, if selling the firm is the way to go, to consider as many possible acquirers as possible.
Crypto crackdown. The Securities and Exchange Commission has charged a former Ameriprise advisor with a cryptocurrency scheme that allegedly defrauded six clients out of more than $600,000. The commission alleges that Arthur Hoffman, who declined to comment, failed to disclose an array of conflicts of interest, including that he had borrowed money to solicit investors from a cryptocurrency trading firm.
UBS’ reorg for the ultrawealthy. Next month, UBS plans to debut a new, consolidated business operation that will bring together various units that serve ultrawealthy clients. The Global Family and Institutional Wealth unit will knit together UBS’ family office, global markets, global lending, and prime brokerage operations.
Beacon Pointe Advisors has grown to an impressive $26 billion in assets under administration and now has offices across the country. But Shannon Eusey, who founded the Newport Beach, Calif.-based registered investment advisor firm two decades ago, sees a lot more growth ahead. In this week’s Barron’s Advisor Q&A, she explains how the firm expects to expand to as much as 10 times its current size in just the next five years.
Have a great weekend.
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