Latest news with #Boneparth
CNBC
09-08-2025
- Business
- CNBC
Crypto may be coming to 401(k) plans, but it'll be a while before it's easily accessible
The crypto market this week cheered as President Donald Trump signed an executive order meant to open retirement plans to alternative assets including cryptocurrencies. The move from the White House has the potential to be a game changer for the adoption of digital assets. It could help turn them into mainstays of the U.S. financial market by expanding access and encouraging longer-term investing in crypto. Bitcoin , which has been riding a big wave of institutional acceptance and adoption since last year's debut of U.S. bitcoin ETFs , could one day become more established within financial services. It probably won't happen soon based on the White House's greenlight alone. It's even more unlikely investors will be directing BONK , Pudgy Penguins or other meme coins to their retirement accounts. "On the surface, it's exciting to see digital assets getting presidential-level attention," said Doug Boneparth, certified financial planner and founder of Bone Fide Wealth. "It signals continued legitimization of the space and shows how far we've come since bitcoin was just an internet curiosity. But the reality is a lot more nuanced." Employer adoption is key First of all, under the Employee Retirement Income Security Act of 1974 (better known as ERISA), major changes to investment menus require thoughtful guidance and buy-in from plan sponsors – especially if they involve volatile and still-maturing asset classes like crypto, Boneparth noted. For example, Fidelity in 2022 became the first retirement plan provider to give savers the option of putting bitcoin in their 401(k)s. However, employers must be willing to adopt the offering in the first place. That "came down to employers' risk tolerance and fiduciary responsibility. That's not changing overnight with an [executive order]," Boneparth said. Employers' fiduciary duty requires them to comply with ERISA and to run the plan in the best interest of the participants and beneficiaries. Further, too many investment options can be a barrier to participation, said Preston Cherry, CFP and founder of Concurrent Financial Planning. While increased access to crypto may be a plus, "people become overwhelmed with the investment menu options" which leads to a "lack of participation," he said. Even when there is education available on these investment options, employees have to elect to receive it — and those participation rates are typically low, Cherry added. Combine those considerations with high-risk assets, and employers' fiduciary responsibility has to kick in. "What happens with all the other altcoins?" Cherry said, separating out bitcoin, ether and the Solana token. "There should be oversight on that from the investment committee or plan sponsor overseeing what digital currencies actually get accepted and should for sure be educating on it." "There's potential upside in digital currencies, but a lot of folks can't understand 30%, 40%, 50% drawdowns – and it could be destructive," he added. "I'm not saying don't invest in crypto, but be crypto cautious." It depends on recordkeepers and 401(k) plan providers The retirement market had $43 trillion in assets in the first quarter, almost $9 trillion of which was held in 401(k) plans, according to the Investment Company Institute. The crypto market cap is nearly $4 trillion today. The executive order is the latest in a series of efforts under the Trump administration to make the U.S. the "crypto capital of the world." In July, he signed stablecoin legislation known as the GENIUS Act into the first official U.S. crypto law . The Securities and Exchange Commission recently debuted " Project Crypto ," an initiative to modernize securities regulations to allow for crypto-based trading. "The plan providers, the third-party providers, the recordkeepers, are going to decide the end result here, if they want to put crypto in or not," said Tyrone Ross, CEO of registered investment advisor 401 Financial. "This is part of this administration's goal to make crypto the epicenter of the world and to have it grow here," he added. "They're all-in, but the Fidelities of the world, the Schwabs, the MassMutuals, the Vanguards of the world – I don't know if they're just going to go, 'OK, we're going to do it.'" Boneparth echoed that the order is more "more symbolic than structural right now." However, this shouldn't diminish the significance of Washington's blessing of the crypto industry. Further, an education opportunity has just opened up in the retirement sector. "As someone who believes in the long-term role of bitcoin in a diversified portfolio, I'm hopeful," Boneparth said. "But as a fiduciary, I know our job is to help clients weigh the opportunity and the risk." "If we do this right, the door opens a little wider to the future of retirement investing," he said. "If we don't? Well then, who knows what meme coin we're going to see on a retirement plan statement."
CNBC
25-06-2025
- Business
- CNBC
Buy now, pay later plans will soon impact your credit score—what you need to know
One of the benefits of buy now, pay later loans is changing. FICO, the company that calculates most of Americans' credit scores, announced Monday it would be releasing a credit score model this fall that considers BNPL loans, The Wall Street Journal first reported. Banks and lenders will be able to see one score that considers users' BNPL loans and one that does not, and decide which to use as they consider borrowers' creditworthiness, WSJ reports. The three credit reporting bureaus — Equifax, Experian and TransUnion — can then decide which score borrowers see and what's included in their credit reports. "This is an area where I welcome greater controls when it comes to borrowing," says Douglas Boneparth, a certified financial planner and founder of Bone Fide Wealth. Boneparth recently called BNPL plans a "scam" in a LinkedIn post. "If someone who's demonstrated bad borrowing behavior in the past is trying to continue that behavior through buy now, pay later programs, but now is unable to do that because [of] credit reporting, then I welcome those types of controls," he added. Currently, BNPL plans don't directly impact users' credit scores. There's no hard inquiry for users to get approved for the installment loans and if they don't make their payments on time, they typically incur late fees or interest fees. However, they could eventually have their debt sold to a debt collector, at which point the loans could affect their credit scores. Around 40% of BNPL users say no impact to their credit score is one of the top benefits of the plans, according to a recent survey of over 1,000 Americans by affiliate marketing agency PartnerCentric. The same survey found that 45% of users wouldn't change their BNPL use if the plans started affecting their credit score. On the surface, BNPL plans could be useful tools for consumers who may have limited or poor credit histories but need to finance major purchases. In 2022, nearly two-thirds of BNPL loans went to users with low credit scores, a Consumer Finance Protection Bureau analysis found. But data shows some concerning behavior among BNPL users, including taking out multiple loans at once and carrying higher balances, on average, than non-BNPL users, CFPB found. Around 63% of BNPL users took out multiple loans at the same time in the last year and 33% of users borrowed from multiple lenders. Further, partnerships like delivery app Doordash's partnership with Klarna have critics like Boneparth sounding alarm bells because they seem to encourage users to finance smaller purchases that generally shouldn't require a loan. "I think there's a world where buy now, pay later could be a useful tool to help young or early borrowers build good credit, but given the current framework and behaviors, it just doesn't seem that way," Boneparth says. BNPL users routinely spend more than non-users, a recent study showed. Plus, 41% of BNPL users were late on a payment in the last year, a recent LendingTree study found. More traditional methods of building credit, such as using a secured credit card or opening a regular credit card with a relatively small limit, have guardrails in place to help prevent consumers from overextending themselves financially, Boneparth says. But BNPL plans typically don't have those kinds of limits or credit checks, which can allow users to overspend or take on numerous loans at once. Of course, plenty of people get themselves into trouble using traditional financing like credit cards. Ultimately, it's up to individuals to learn how to use financing options wisely. "Using credit requires discipline," Boneparth says. "Whether it's credit card lenders or buy now pay later programs, it is not a great consequence when you cannot make good on [your loans]."
CNBC
25-06-2025
- Business
- CNBC
Most Americans say this financial milestone makes you an adult
These days, it's common for parents to give their adult children some financial support. But it wouldn't take a lot to be considered independent. About three-quarters, or 76%, of Americans say that coming off a parent's cell phone plan is one of the "ultimate signs" of adulthood, according to a recent survey of over 2,000 adults by AT&T. Roughly two-thirds, or 66%, of those polled also say they believe adult children should aim to reach this financial milestone by age 21. However, of those who pay their own cell phone bill, most waited until age 27 — and 18% didn't start paying for their plan until age 40 or later, AT&T found. Here's a look at other stories affecting the financial advisor business. It makes sense that paying for a cell phone plan would be a telling sign of financial freedom for many young adults, according to Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida. "Eventually they have to get their own car insurance because they can't stay on their parent's plan once they are no longer living them after they've finished school," said McClanahan, a member of the CNBC Financial Advisor Council. "At 26, they have to get their own health insurance. So it is not surprising that they stayed on the family phone plan as the last break for independence." Many experts argue it's harder today for young adults to make it on their own. "Separating from a parent's cell phone plan might seem minor, but it symbolizes something much bigger: financial independence and personal responsibility," said Douglas Boneparth, an CFP and the president of Bone Fide Wealth in New York. "In today's world, where young adults are often burdened by high living costs, student loans and delayed milestones like homeownership, even small acts of autonomy feel like major wins," said Boneparth, who also is a member of CNBC's Financial Advisor Council. According to J.D. Power, the average monthly cell phone bill is $144. In addition to soaring everyday expenses and housing costs, millennials and Generation Z face other financial challenges their parents did not at that age, other studies also show. Not only are their wages lower than their parents' earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances. "'Adulting' isn't always about hitting big life events," Boneparth said. "Sometimes it's about taking ownership of the basics, like paying your own phone bill. These micro-milestones offer a sense of progress and control when other financial goals feel out of reach."
Yahoo
18-04-2025
- Business
- Yahoo
How to protect your money when markets get rocky
Americans are nervous about their investment portfolios, and it's easy to see why, given escalating trade tensions and gloomy economic forecasts. The probability of a US recession within the next 12 months has jumped to 45% from 25% last month — the highest since December 2023, a recent Reuters poll found. President Donald Trump's sweeping tariffs, which have sparked a global trade war, have prompted worries about inflation, slower growth and layoffs. Welcome to a 'risk-off' environment, a time when investors pull money from volatile assets like stocks and search for safer ground. 'Uncertainty couldn't be any higher right now,' said Douglas Boneparth, a certified financial planner and founder of wealth management firm Bone Fide Wealth. 'Imagine being the CFO of a Fortune 100 company trying to plan for the year, let alone multiple years.' But he said investors who aren't CFOs of multinational corporations don't need a finance degree to protect their money. They just need a plan. When markets get choppy, it's tempting to hit the panic button. But financial experts say the smartest move you can make is pause — and plan. 'Short-term volatility is part of the game,' Boneparth said. 'The worst thing you can do is sell at the bottom or make an emotional decision that sets you back for years.' In other words: Pulling your money out during a downturn can lock in losses, and you may miss the market's biggest recovery days, which often drive long-term gains. Catherine Valega, a certified financial planner with Green Bee Advisory in Boston, agrees with taking a moment to think things through. She suggests that investors work with financial advisors who can help with their long-term plans. 'I like to say we set the guardrails, like a GPS for their financial life,' she said. She also recommends continuing to invest, especially for people who work and have 401(k)s. For those without a 401(k), you can set up automated investments, Valega said. In shaky markets, many investors turn to cash equivalents — think high-yield savings accounts, US Treasury bills, money market funds or CDs. These are typically insured or backed by the government, offering peace of mind. 'Cash gives you flexibility and control,' Boneparth said. 'But going all to cash out of fear? That's often the worst move.' Fixed-income investments like bonds are another option, though Boneparth cautions that some have significant risk. Even the S&P 500, which is often seen as a solid long-term investment, comes with risk. 'Warren Buffett says to invest in the S&P 500, but he also says to do it for 10 years or more,' Boneparth noted. 'Risk and reward go hand in hand.' If investors are feeling uneasy, there are ways to reduce risk without abandoning the market entirely. Start by building a solid cash reserve, ideally at least three to six months of living expenses. 'That gives you the cushion to handle emergencies or opportunities without touching your investments,' Boneparth said. Once investors have built up a large enough cash reserve, it's smart to diversify, Valega said. US Treasury bills, money market accounts or other low-risk cash alternatives can help spread out risk without compromising safety, though again investors don't have to put all their money here. Another smart move? Rebalancing your portfolio. That means adjusting your mix of stocks, bonds and cash to realign with your goals and risk tolerance. For some, that could mean taking advantage of discounted stock prices to buy more — what some investors call 'buying the dip.' No one can predict when markets rise or fall. What matters most is staying consistent and disciplined, Boneparth said. 'Investing isn't about picking the perfect stock,' he said. 'It's about doing the boring stuff consistently over a long period of time. That's what makes it hard.' In rocky markets, that kind of calm and measured approach might be your greatest asset. Sign in to access your portfolio
CNN
18-04-2025
- Business
- CNN
How to protect your money when markets get rocky
Americans are nervous about their investment portfolios, and it's easy to see why, given escalating trade tensions and gloomy economic forecasts. The probability of a US recession within the next 12 months has jumped to 45% from 25% last month — the highest since December 2023, a recent Reuters poll found. President Donald Trump's sweeping tariffs, which have sparked a global trade war, have prompted worries about inflation, slower growth and layoffs. Welcome to a 'risk-off' environment, a time when investors pull money from volatile assets like stocks and search for safer ground. 'Uncertainty couldn't be any higher right now,' said Douglas Boneparth, a certified financial planner and founder of wealth management firm Bone Fide Wealth. 'Imagine being the CFO of a Fortune 100 company trying to plan for the year, let alone multiple years.' But he said investors who aren't CFOs of multinational corporations don't need a finance degree to protect their money. They just need a plan. When markets get choppy, it's tempting to hit the panic button. But financial experts say the smartest move you can make is pause — and plan. 'Short-term volatility is part of the game,' Boneparth said. 'The worst thing you can do is sell at the bottom or make an emotional decision that sets you back for years.' In other words: Pulling your money out during a downturn can lock in losses, and you may miss the market's biggest recovery days, which often drive long-term gains. Catherine Valega, a certified financial planner with Green Bee Advisory in Boston, agrees with taking a moment to think things through. She suggests that investors work with financial advisors who can help with their long-term plans. 'I like to say we set the guardrails, like a GPS for their financial life,' she said. She also recommends continuing to invest, especially for people who work and have 401(k)s. For those without a 401(k), you can set up automated investments, Valega said. In shaky markets, many investors turn to cash equivalents — think high-yield savings accounts, US Treasury bills, money market funds or CDs. These are typically insured or backed by the government, offering peace of mind. 'Cash gives you flexibility and control,' Boneparth said. 'But going all to cash out of fear? That's often the worst move.' Fixed-income investments like bonds are another option, though Boneparth cautions that some have significant risk. Even the S&P 500, which is often seen as a solid long-term investment, comes with risk. 'Warren Buffett says to invest in the S&P 500, but he also says to do it for 10 years or more,' Boneparth noted. 'Risk and reward go hand in hand.' How to de-risk without pulling out completely If investors are feeling uneasy, there are ways to reduce risk without abandoning the market entirely. Start by building a solid cash reserve, ideally at least three to six months of living expenses. 'That gives you the cushion to handle emergencies or opportunities without touching your investments,' Boneparth said. Once investors have built up a large enough cash reserve, it's smart to diversify, Valega said. US Treasury bills, money market accounts or other low-risk cash alternatives can help spread out risk without compromising safety, though again investors don't have to put all their money here. Another smart move? Rebalancing your portfolio. That means adjusting your mix of stocks, bonds and cash to realign with your goals and risk tolerance. For some, that could mean taking advantage of discounted stock prices to buy more — what some investors call 'buying the dip.' Bottom line No one can predict when markets rise or fall. What matters most is staying consistent and disciplined, Boneparth said. 'Investing isn't about picking the perfect stock,' he said. 'It's about doing the boring stuff consistently over a long period of time. That's what makes it hard.' In rocky markets, that kind of calm and measured approach might be your greatest asset.
