How an RIA Eases Clients' Worries on Volatility, Inflation, Health Care

RegentAtlantic advisors were “defensive short duration and now we think rates are likely to still increase through the end of the year,” she said. “But if you look at yields on investment-grade intermediate-term corporate bonds, for example, you’ve got really high quality there.”

However, she says advisors at her firm are explaining to clients that “even if there is some recession risk, the yields are pretty compelling and … in a recessionary environment, locking in those rates at this point could work out very well.”

Rising interest rates are a major issue for clients with debt, she said.

Her recommendations for those clients affected by the Fed’s interest rate hikes include to use their credit card “like a debit card, get your points and pay it off every month.”

While most of her older clients do not carry credit card debt, their children are “not as fortunate” on this front, she said. For this group, “I think it becomes even more important than ever to pay off any variable rate debt that you might have,” she added.

Health Care Worries

Clients’ health care concerns extend to Medicare and Social Security, Weisz said, noting that the Inflation Reduction Act includes the expansion of the 3.8% Medicare surtax to help shore up Medicare.

“I think the inflation on health care is certainly a concern,” she said. “So, where we can, for people who are still accumulating” wealth, she and other RegentAtlantic advisors are “looking at health savings accounts, taking advantage of flexible spending plans, making sure that we’re modeling health expenses sort of separate from other expenses the same way we would college tuition.”

The rise in health care costs is “running at significant premiums to the core inflation” we are experiencing, she said. “Making sure that we’re modeling and really planning for health care” is so important because it is, after all, “such a significant expense and it’s really the only expense that goes up throughout retirement, where our discretionary expenses, we have a lot more control of.”

Recession-Ready

“I think that clients kind of know” already that a recession is likely, Weisz said.

“I actually think that March 2020 was really, really hard on clients,” she said, but added: “I think that they’ve actually [become] a lot more resilient, and sort of staying on plan versus [saying], ‘whoa, this is unprecedented. What do we do?’”

(Pictured: Melissa Weisz, wealth advisor at RIA RegentAtlantic)