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Vol. 79, No. 4, July 2025

FEATURED ARTICLES

The Health Care Benefit Crisis, Twenty Years Later: Part 3
Eric Parmenter, PhD, MBA, CEBS, SPHR, REBC, RHU, CLU, ChFC, LUTCF
Amer Haffar, MBA
Irena Kaplan
Caitlin Hohman, PharmD
Twenty years have passed since the article, "Health Care Benefit Crisis: Cost Drivers and Strategic Solutions," appeared in this Journal (Parmenter, Journal of Financial Service Professionals 58, no. 4 (2004): 63-78). And nearly 10 years have passed since Part 1 and Part 2 of "The Health Care Benefit Crisis, Ten Years Later," were published in 2015 (Parmenter, Journal of Financial Service Professionals 69, no. 2 and no. 3 (2015): 67-83; 83-91), evaluating the state of employer-sponsored self-funded health benefits in the decade from 2004 to 2014. In this current three-part series, Part 1 examined how the drivers of cost have evolved over the past two decades since those original articles were published. Part 2 summarized the viewpoints of employers, employees, and consultants from survey data, along with contemporary employer actions. Part 3 proposes a new set of legislative initiatives that align incentives to improve the cost and quality of health care for key stakeholders.

On the Inadequacy of Common Financial Tools for Potential Homebuyers
Craig Furfine, PhD
This article examines the inadequacies of two commonly used financial tools in homebuying decisions: cash flow analyses of the buy-versus-rent (BVR) decision and home affordability calculations. Standard BVR analyses generally fail to account for the interdependence between rent and home price growth and the differing risks associated with homeownership and renting. Similarly, home affordability calculators prioritize lender criteria rather than aligning housing decisions with buyers’ long-term financial goals. These limitations highlight an opportunity for financial professionals to provide more comprehensive guidance and assist clients in making informed decisions that align with both financial feasibility and personal objectives.

Central Bank Digital Currencies and User Privacy
Brian J. Halsey, JD, LLM, CISSP
Julie D. Pfaff, JD, MA
Central bank digital currencies (CBDCs) are on the horizon. They are actively discussed as an alternative to traditional currencies by many national governments. Financial service professionals require a workable knowledge of CBDCs’ possibilities and pitfalls. This article provides a fundamental primer regarding the privacy issues inherent to CBDCs within a rapidly changing landscape to ensure professionals can adequately advise their clients as CBDCs enter the political and financial arenas.

DEPARTMENTS

Editor’s View
Where Do the SECURE 2.0 Individual Retirement Planning Decisions Stand Today?
Kenn Beam Tacchino, JD, LLM
The SECURE Act 2.0 (Public Law 117-328) was passed on December 29, 2022. Some changes were effective immediately; other changes had enactment dates 1, 2, and, in some cases, 3 or more years in the future. Some of the SECURE 2.0 provisions provide unique opportunities that impact retirement planning for individual (not business) clients. Now that the dust has settled on some of these issues (including, in some cases, receiving guidance concerning the finer points of the legislation), it is time to gauge the financial planner's grasp of the new landscape. To this end, we present a 14-question quiz. Pay close attention to the answers provided at the end of the column to gain insight into some of the details you need to know.

Economics & Investment Management
Inflation Hedging
Kenneth Washer, DBA, CFA, CFP
Srinivas Nippani, PhD
This column examines inflation risk with strategies for reducing nondiscretionary spending by focusing on such areas as health and wellness, debt reduction/elimination, and investing in housing to lock in significant costs. We also focus on the investment portfolio. Stocks have been a great long-term hedge against inflation, but they do expose investors to short-term volatility. Near-term investments include short maturity Treasury securities that include inflation protected securities (TIPS). A laddered approach to TIPS is ideal, yet building the ladder can be complicated. TIPS funds are much easier to employ; however, they provide less certainty regarding future cash flows. This uncertainty can be managed by periodically calculating the present value of near-term cash flow requirements and then adding to the fund if necessary.

Estate Planning
When Emojis Mean Business: The New Legal Frontier for Financial Firms
Mark R. Parthemer, JD, AEP, ACTEC Fellow
What once felt lighthearted has become legally loaded. Emojis have crossed into business communications—often via messaging platforms like email, Slack, Teams, and text—and courts are now treating them as part of the evidentiary record. In the financial sector, where every word (and now, every symbol) can have regulatory or contractual significance, this development raises serious implications. Can a thumbs-up be interpreted as approving a transaction? Might a heart emoji be seen as endorsing a client’s investment decision? These questions are no longer hypothetical. As legal standards catch up with communication trends, financial professionals must treat emojis as substantive expressions capable of influencing client expectations, contractual obligations, and compliance risk.

Financial Gerontology
Truths about Successful Marketing to the 50+ Consumer
John N. Migliaccio, PhD, RFG, FGSA, MEd
While financial services firms and professionals, their clients, and the general public have all been exposed to sometimes unpredictable changes and fluctuations at the global, national, local, and personal level, there are some core aspects of their lives and finances that reflect constancy. Understanding the interaction between client age, generational demographics, personal traits, and family characteristics assists in creating a customer-focused orientation that helps solidify a responsive client relationship, one that is not only perceived as valuable by the client, but also one that benefits the financial advisor.

In the Client’s Best Interest
The What, Who, and Why of Suitable Insurance Product Recommendations
Richard M. Weber, MBA, CLU, AEP (Distinguished)
Gerard J. Vanderzanden, CLU, ChFC, CLTC
FINRA Rule 2111 requires registered representatives to align product recommendations with the client’s circumstances. The admonition to "know your client" is essential for fulfilling this obligation. However, New York is the only state mandating that licensed insurance producers apply suitability principles to buyers of non-security life insurance (including term) and annuity products. A wide spectrum of products exists, varying in premium outlay and the degree to which the transfer of insured risk is complete or has inadvertently (and often unknowingly) reverted to the policyowner. Herein, we discuss the need to address suitability and best interest principals.

Insurance & Risk Management
A Glimpse behind the Actuarial Curtain: Life Insurance Pricing
Todd L. Laszewski, FSA, CLU, MS
Actuaries are using a highly interdependent combination of “actuarial science” and “actuarial art” (intuition, flexibility, and educated guesses) to design, price, and manage sophisticated financial products/tools, while advisors are using their creativity, training, and experience to provide the sage advice and guidance for the unique needs of each and every one of their clients.

Social Security Planning
Taxation of Social Security Benefits
Bruce D. Schobel, FSA, MAAA, CLU, CEBS
The taxation of Social Security benefits has a long and storied history. Understanding the evolution of the current system is an important key to discerning next steps. In addition, it would be wise to understand the projected Social Security shortfall that is predicted to occur in less than 10 years.