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Financial Planning > Tax Planning

Nationwide poll: tax code changes concern affluent investors

By Warren S. Hersch

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More than six in ten high net worth investors are concerned that forthcoming tax code changes will negatively impact their investment portfolios, according to a new survey.

Nationwide Financial, Columbus, Ohio, published this finding in a summary of results from a poll of 751 high net worth investors with $250,000 or more in annual household income or investable assets. Nationwide commissioned Harris Interactive, New York, to conduct the poll.

The survey reveals that 63 percent worry about the affect of pending tax code changes now that President Obama has been reelected president. And three in five (64 percent) don’t believe that adjustments to offset pending tax increases are possible.

The poll further reveals that 60 percent of survey respondents say they either won’t or are unsure if they will meet with a financial advisor to discuss how tax code changes may affect their portfolio.  More than half (56 percent) of the respondents believe their individual federal taxes will increase.

Additionally, nearly half (48 percent) expect tax rates to increase, particularly for the wealthy. And almost one-third (30 percent) believe tax rates will increase across the board. Nearly seven in ten of the poll respondents think Bush-era tax cuts will be eliminated (35 percent) or reduced (33 percent) for the wealthiest Americans.

Despite these concerns, the survey states, six in ten (61 percent) will take no action, saying they don’t plan to make adjustments to their portfolio or don’t know what adjustments to make. Of those who do plan to meet with a financial advisor, a quarter (26 percent) will wait until 2013 or after tax code changes take affect.

While only one in ten (10 percent) survey respondents have already met with an advisor, nearly all of those who did found it to be helpful in understanding tax code changes and planning changes to their portfolio that will minimize the potential impact.

Just over half (55 percent) of respondents currently have a financial advisor and most (82 percent) are somewhat comfortable talking to them about tax code changes and have confidence in their advisor’s ability to help prepare for changes in the tax code (88 percent).

Four in ten (41percent) survey respondents want more education on the tax advantages of annuities and about a quarter want more education on the tax advantages of life insurance (21percent) and 401(k) plans (25 percent).

Six in ten (59 percent) are not aware of changes to estate and gift tax limitations and say they do not understand very much or at all how a life insurance policy can help them take advantage of the current gift tax exemption limits (60 percent). Forty-three percent would like more education on that topic, the survey reveals.

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