Wealthy Cutting Back on Investing, Spending: AICPA

Financial planners’ high-net-worth clients are asking for guidance on investing and spending, as they reassess their holdings following the devastation of 2008, the American Institute of Certified Public Accountants found in a survey.

While planners are helping their clients revisit their risk tolerance, their advice varies widely. Eighty percent of CPA financial advisers are strongly recommending growth and income securities, 65% are also recommending fixed income, and 40% are calling on them to increase cash holdings. Thirty percent are recommending commodities such as gold and precious metals.

Half of the clients are increasing contributions to qualified retirement plans, and 67% are accelerating capital gains in anticipation of future tax increases. Fifty percent of CPA financial planners are recommending gifting devalued assets as a tax-efficient mode of wealth transfer.

Overall, 57% of their clients are reviewing their portfolios more frequently.

“We are reassessing our clients’ risk tolerance and, when necessary, reallocating their current portfolio assets,” said CPA Lyle K. Benson, Jr. of L.K. Benson & Co. “Now more than ever, our clients are seeking our financial expertise to guide them through these uncertain economic times.”

The financial planners said that many of their clients are dining out less frequently, ordering less expensive items and repairing items rather than purchasing new ones.