Of all the goals of the tax review proposed by President Joe Biden, companies are the most likely to experience a rate hike, said Greg Fleming, director of wealth advisor Rockefeller Capital Management.
“If you lower the corporate tax from 21% to 28%, that’s about $ 1,000 billion over the period the president is looking at,” Fleming said Tuesday in an interview with the Bloomberg Wealth Summit. “It’s hard for me to see that they don’t try to go after that, given the need for income and the few places you can really get it. This one looks a bit like a jar of honey to me.
Fleming, former chairman of Morgan Stanley Wealth Management, helped found Rockefeller Wealth Management in 2018 as an offshoot of Rockefeller & Co., once the family office of oil magnate John D. Rockefeller. He said the company had $ 75 billion in customer assets, a figure that has more than quadrupled in the past three years. Client net worth ranges from several million dollars to over $ 100 million.
Much of this growth is due to acquisitions. Rockefeller has hired in recent years, adding advisers across the United States from rivals such as Morgan Stanley and Merrill Lynch. The company added about two dozen new teams in 2020, expanding its footprint in Texas, California and Arizona.
Regarding the hikes Biden planned for the wealthy, Fleming said it was too early to say what the impact would be. They advise clients to be patient.
“There is a lot to come in terms of what will actually become law in the United States,” he said. “There is a lot of wood to be cut before you get to an invoice.”
Other topics included:
• Inheritance tax: Fleming said he expects any potential increase in inheritance tax to likely provide exclusions for family businesses that have been owned for generations. Any change in the mark-up base can be more targeted at financial assets.
• Cryptocurrencies. Rockefeller advisers are urging clients interested in assets to be cautious given price volatility and the challenge of gauging value. Cryptocurrencies will be mainstream, “they’re part of the future,” but central banks and governments will have to weigh in and their impact will have an impact.
• Rules of the family office. After that of March collapse of the capital Archegos Management, regulators will likely step in and examine whether there are any gaps in oversight of family office structures, Fleming said. Increased regulation can increase costs and reinforce the need to outsource family office operations.
• Expansion. Rockefeller is looking to expand primarily in the United States and may expand to 20 more cities in the future. Locations under consideration include Colorado, Nashville, Seattle and the Midwest, he said. “We go to cities and places where there are clients who match our client profile and where we can find elite financial advisors who serve those clients.”
• Inflation. Fiscal and monetary stimulus increases the risk of inflation after years of rising prices “stifled by the incredible pace of productivity thanks to technology,” Fleming said.
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