How developments out of D.C. are affecting financial advisors

Advisors have been carefully observing the Fed's monetary policy for the past two years to get a sense of what impact it will have on the economy. Despite Fed indications that interest rates would be cut at some point this year — and optimism that the first of those cuts would come quickly — rates remain unchanged so far.

"Given how far we have come, along with the uncertainties and risks that we face, the Committee is proceeding carefully," Fed Chair Jerome Powell said after the agency's February meeting.

With caution appearing to be the watchword, Nathan Place, retirement reporter at Financial Planning, spoke with six industry analysts to get their thoughts on where the Fed's latest action, or inaction, leaves wealth managers.

Read more: Crash or land: What does the Fed's decision mean for wealth management?

The Department of Labor's pending proposal on regulating retirement advice will need to overcome two significant hurdles before it sees the light of day, according to Benjamin Edwards, a professor of law at the William S. Boyd School of Law at the University of Nevada.  

"One of the factors that might affect whether the rule makes it is exactly when it comes out and when that review period is and who is in Congress at the time," Edwards said. "If you get it done before the election and that period expires before a new Congress comes in, then it'll be up to the courts."

With advocates and opponents both inside and outside Congress, as well as trade and industry groups waiting to issue a challenge in the courts, the rule faces a long, arduous journey that may be heavily influenced by the winner of the presidential election.    

Read more: DOL retirement proposal faces 2 potential checks before election 

The likelihood of any changes in the amount of tax paid by high earners before the election is exceedingly slim, but what may happen thereafter has wealth managers prognosticating on what the next president and new Congress will do.  

"Taxes for ultrahigh net worth individuals have always been complicated," said Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy. But whether the rules are simple or more complicated, "Either way, there's plenty of work for financial advisors and wealth managers."

Financial Planning talked with Wamhoff and two other authorities from nonpartisan organizations to find out their views on the tax proposals for wealthy individuals that advisors should note.

Read more: Will voters veto 'billionaire taxes' and other plans to tax wealthy clients?