cliff" is not a cliff at all, and is simply a creation of Congress to allow them to avoid making decisions (or to force them to make a decision, depending on your point of view), investors are going to be nervous and have questions.
However, we have gone over that mythical cliff, and investors are going to be worried, and advisors will be asked to help their clients make important decisions regarding their finances.
At the outset, it is important to keep in mind that if Congress can stop playing politics in the next week or so, they can enact legislation to address the "cliff" and make that legislation effective as of January 1, 2013, avoiding the "cliff." If they wait much longer than that, there will be no retroactive fix, tax rates go up, automatic spending cuts go into place.
While there are a number of issues that are raised by the failure of Congress to act, there are two important aspects that will affect all investors.
Higher tax rates for everyone. Investors and advisors need to examine their tax related strategies, and re-visit ones that were considered and canned. With everyone's rates going up, the economics of tax advantages investments have changed. For clients with income over $250,000, to help pay for the new healthcare law, upper-income households will see a new 0.9% tax on ordinary income and a 3.8% tax on unearned income
Estate planning is all new now - The estate tax has jumped from 35% to 55%, and the exemption has shrunk from $5.12 million for a single filer to $1 million. Tens of thousands of investors will be effected by the federal estate tax, some or all of which can be avoided, by careful planning with an advisor and a tax advisor.