Financial Advisors Will Be Facing Profound Changes In Their Industry In 2006, According To Impact Technologies Group

Impact’s 2006 Industry Forecast Predicts Significant Activity As a Result of Federal Tax Reform, Estate Tax Repeal and Retiring Baby Boomers

Charlotte, NC, December 21, 2005 - 2006 will be a year of sharp changes for financial advisors and their clients, according to Impact Technologies Group, Inc. (Impact), a provider of financial sales software for the banking, capital markets and insurance industries. The company’s industry trends forecast for 2006 predicts that federal tax reform, changes to the estate tax laws, and the first wave of baby boomers retiring will result in an unusually busy year for advisors and wealth planners.

According to Impact, action by the federal government to change the tax code and reform or repeal the estate tax will have the most impact on how advisors handle their clients’ financial plans. Under proposed changes to the federal tax code, one area in particular will likely have a significant effect on how Americans plan for their future – retirement savings options.

“There may be sweeping changes to retirement accumulation options, which may ultimately result in more ways to save for retirement,” said Maxey Sanderson, vice president of product development, Impact. “This will have financial planners busy for some time as they re-educate clients and modify their clients’ investment portfolios. This makes for an exceptionally busy year for advisors.”

Impact is also predicting increased activity in estate planning. “Many individuals have deferred planning for their estate, waiting to see if there would be reform, repeal, or possibly see the previous high rates restored,” according to Sanderson. “Reform appears to have the upper hand at the moment with a large exemption (probably $5 million) and lower estate tax rates (probably 15% to 20%). Repeal would result in a similar amount of tax, but it would be as capital gains tax when the heirs sold the inherited property instead of when they inherited it, with a large exclusion for the spouse, and family. Either way, there should be an increase in planning this year.”

2006 will also be the year that the first wave of baby boomers begin retiring, which will have financial planners putting significantly more focus on post-retirement distribution plans.

“The boomer exodus to retirement has always seemed far off, but now it’s here. We feel as though this will be one of the hottest market areas in the industry,” said Kevin Clay, president, Impact. “It’s going to have a positive affect on the financial planning industry, but advisors need to put more emphasis on developing boomer post-retirement plans, something that we really haven’t seen too much of yet in the industry. While accumulation is alive and well, advisors must take action on distribution planning if they plan to capitalize on this market opportunity that will last for the next 10 years.”

Impact is basing its predictions upon numerous conversations its financial planning experts have had with representatives from brokerage firms, banks, and insurance companies, as well as with the company’s technology partners. The list of conclusions and predictions is intended to generate discussion and healthy debate on the subjects of tax and estate law changes and how they will affect financial planning firms.

About Impact Technologies Group

Impact Technologies Group, Inc. (Impact) provides software and services to financial institutions in the banking, capital markets, and insurance industries. Founded in 1981, Impact provides innovative sales, communication, and planning tools that facilitate the sales process and help advisors and their customers make informed decisions by presenting complex financial concepts and calculations in a sensible format. Developed with a firm understanding of sales psychology, Impact’s solutions are built on the Microsoft® .NET Framework and deliver integrated, easy-to-use technology that streamlines the financial sales process. For more information, or to listen to Impact’s latest pod casts, visit www.impact-tech.com.

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Neal Stein
Inline Technology Marketing
321.253.8225
nstein@inlinetechmarketing.com