Archive for September, 2010
Posted by William Byrnes on September 30, 2010
President Obama signed the Small Business Jobs and Credit Act of 2010, H.R. 5297, on Monday, September 27, establishing an allowance for partial annuitizations of annuity contracts from January 1, 2011. In the coming weeks, the Advisors Journal will include in-depth examinations of the provisions of the Small Business Act that are of the most interest to advisors and insurance producers, such as the partial annuitization of annuity contracts and the Roth Conversion Extension to Employer Accounts.
In this AdvisorFX exclusive analysis, we summarize the impact of the Act’s other major provisions. Please read the article via your AdvisorFX subscription at AdvisorFX (or sign up for a free 30 day trial).
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Posted in Tax Policy, Taxation | Tagged: Barack Obama, Business, insurance, Life annuity, Small business, Small Business Administration, Small Business Jobs, United States | Leave a Comment »
Posted by William Byrnes on September 30, 2010
The business owner who supports his parent, or an adult family member, may be missing an opportunity to lower his tax burden. In the context of a properly established insurance funded buy-sell agreement, small business clients have an opportunity to provide an adult family member with a fixed income while also protecting the client’s interest in the business and avoiding adverse tax consequences.
Read the analysis by our experts Robert Bloink and William Byrnes located at AdvisorFX Journal The Planning Opportunity Presented When a Client Supports a Parent
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Posted in Uncategorized | Tagged: Business, Company, Fixed income, insurance, Magazines and E-zines, Marketing, Small business, tax | Leave a Comment »
Posted by William Byrnes on September 29, 2010
Expanding employment opportunities
In 2008, Cap Gemini reported that wealth management firms will sharply increase hiring because of the impending retirement, from 2010-2020, of “baby-boomer” wealth managers. New employment opportunities will also be created by expanding opportunities within the wealth management market. Over the coming decade, wealth management firms will have substantially more client opportunities because the pool of high-net-worth individuals (HNWI) globally, and their assets, continue to grow steadily, and because half of HNWIs do not have a wealth manager.
Half of HNWIs not receiving advice
According to Oliver Wyman, only 50% of HNWI assets are professionally managed. An unprecedented amount of retiring boomers who had not previously used a wealth manager now require one to transition their asset portfolios to income ones, plan succession, and balance potential medical care needs. Wealth management firms therefore have a pool of approximately five million (and expanding) new client opportunities.
Oliver Wyman reports that the new generation of HNWIs is predominantly (70%) self-generated wealth; through entrepreneurship or executive compensation. These HNWIs consider it normal business practice to seek outside expertise and are more likely to leverage wealth managers.
Senior staff salaries and jobs
The San Diego Business Journal reported in 2009 that wealth management salaries held steady in the midst of the crisis, ranging from USD150,000 to USD400,000. Even more exciting, Cap Gemini reported that “bidding wars among firms for top advisors are not uncommon” and packages will include “bonuses equaling two or three times the payouts from just a few years ago”. Reuters reports that brokerage firms offer sometimes triple an adviser’s fees and commission over the previous year, whereas private bankers receive one to two times their previous year’s salary and bonus to move. (See Private banks battling for advisers to super-rich) Reuters reports that “Wells, he said, is looking outside the private banking world in its bid to add 150 new recruits. Citi has looked to Goldman Sachs Private Wealth Management as well as Barclays Wealth, a Barclays unit built from a business acquired from Lehman Brothers. Citi has said it aims to double its private banker ranks to about 260 within three years.”
For my complete analysis in my September article of Offshore Investment magazine – read it online – Wealth Management Employment in the Coming Decade
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Posted in Wealth Management | Tagged: Baby boomer, Business, Capgemini, Financial services, High net worth individual, Investing, Lehman Brothers, Oliver Wyman, San Diego Business Journal, Wealth Management | Leave a Comment »
Posted by William Byrnes on September 29, 2010
The Automatic IRA Act of 2010 (S. 3760) would require smaller employers to open automatically funded IRAs for their employees, a business opportunity for some advisors and a competitor for advisors to other retirement plans. In addition to its effect on advisors, the automatic IRA program may also benefit the insurance industry by allowing investment in insurance and annuity products, a blessing for insurers when life insurance coverage is at a fifty-year low.
For the complete analysis by our Experts Robert Bloink and William Byrnes, please read the article via your AdvisorFX subscription at The Automatic IRA Act of 2010: Boon for Advisors?
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Posted in Retirement Planning | Tagged: Annuity (US financial products), Business, Employment, Financial services, Individual Retirement Account, insurance, Investment, Pension | Leave a Comment »
Posted by William Byrnes on September 28, 2010
Although regulation of insurance generally has been left to the states, the Wall Street Reform Act may foreshadow future federal oversight of the industry. The Act creates the Federal Insurance Office (FIO) within the Treasury, which will monitor all components of the insurance industry—excluding the health, crop, and long-term care sectors.
Today’s analysis by our Experts William Byrnes and Robert Bloink is located at AdvisorFX Journal The Federal Insurance Office
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Posted in Insurance | Tagged: Business, Federal Insurance Office, Financial services, Health, insurance, Long-term care, Regulation, Wall Street | Leave a Comment »
Posted by William Byrnes on September 27, 2010
Life insurance ownership has hit a fifty-year low, according to the August-released Trends in Life Insurance Ownership, a LIMRA study administered once every six years. But do the economic clouds have a silver—or better yet, gold—lining?
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Life Insurance Ownership Hits Fifty-Year Low
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Posted in Insurance | Tagged: Agents and Marketers, Business, Business and Economy, Financial services, insurance, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on September 25, 2010
A recent IRS Chief Counsel Advice addressed the importance of making adequate disclosures to the IRS when filing a gift tax return, demonstrating the dangers of a tight lip. There, a taxpayer failed to disclose the method and valuation discounts used to value gifted stock. As a result, the taxpayer was unable to seek the protection from gift tax changes based upon the three year statute of limitations.
The statute of limitations for the IRS to question an item on a gift tax return is essentially unlimited if a gift is not “adequately disclosed” on the return, so taxes—and fees and interest—can be imposed on the inadequately disclosed gift any time after the return is filed.
For the complete analysis of this development regarding the disclosures required on a gift tax return by our Experts Robert Bloink and William Byrnes, please read the article via your AdvisorFX subscription at Gift Tax Return Disclosures—Adequate or Else?
For in-depth analysis of this topic, see Advisor’s Main Library Section 7. Gift Taxes D—Valuation For Gift Tax Purposes and from a tax perspective see Tax Facts Q 1534 What are the requirements for filing the gift tax return and paying the tax?
After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.
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Posted in Estate Tax, Taxation | Tagged: adequate disclosure, gift tax, statute of limitation | Leave a Comment »
Posted by William Byrnes on September 24, 2010
Why is this Topic Important to Wealth Managers? Provides a view with respect to revocable trust concepts and estate planning. Presents identifying factors of the trust, what it’s commonly used for, as well as some of the benefits and detriments of its implementation.
This week has mainly discussed the use of trusts with characteristics of complete transfers by grantors. This edition will explore the revocable nature of trusts and how they are applicable to estate planning.
The main difference between a revocable trust and one that is not, is that “the settlor reserves the right to terminate the trust and recover the trust property and any undistributed income.” “The creation of a revocable living trust involves either the transfer of property to one or more trustees or the settlor’s declaration that he holds the property in trust for himself and that upon his death the property is to be held for other beneficiaries.”
For the complete blogticle and its analysis, see AdvisorFYI.
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Posted in Uncategorized | Tagged: estate planning, law, Living trust, Property, Settlor, Trust law, Trustee, United States | Leave a Comment »
Posted by William Byrnes on September 23, 2010
The traditional private annuity is a transaction used by some wealth managers for clients whose circumstances permit. Generally a private annuity transaction occurs where the grantor transfers assets to a third party who pays the grantor an annuity, usually for the life of the grantor.
When a trust is involved with a traditional private annuity, the common transaction may look like this: “The owner of highly appreciated commercial real estate transfers the property to an irrevocable trust in exchange for the trust’s promise to pay an annuity for life. The present value of the annuity equals the fair market value (‘FMV‘) of the property. The trust then sells the property to a third party for a sale price equal to its FMV.” For additional introductory discussion on private annuity contracts see AUS Main Private Annuity.
Planning Concept: Some wealth managers have recently begun to structure private annuities for their clients slightly differently than the traditional methods. For a discussion and analysis, please see AdvisorFYI
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Posted in Estate Tax, Insurance, Trusts | Tagged: annuities, Business, Contract, Financial services, insurance, Life annuity, Pension, Real estate | Leave a Comment »
Posted by William Byrnes on September 22, 2010
Why is this Topic Important to Wealth Managers? Discusses estate tax considerations in regards to life insurance policies. Also, includes a detailed dialogue of the incidents of ownership concept.
What do most wealth managers try to avoid when planning with life insurance and trusts?
That the Gross Estate for Estate Tax calculations would include the death benefit from the policy in the estate.
What are some common ways to avoid this dilemma when using a trust and life insurance in regards to estate planning?
For the answer to this question, and planning analysis, see the blogticle at AdvisorFYI
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Posted in Estate Tax, Insurance, Trusts | Tagged: Business, Death, estate planning, Estate tax in the United States, Insurance policy, law, life insurance, United States | Leave a Comment »
Posted by William Byrnes on September 21, 2010
Why is this Topic Important to Wealth Managers? The terminology associated with common estate planning techniques is generally misguided. Provides a better understanding of the tax and legal implications, on behalf of the client’s estate plans, of trusts that purchase life insurance.
One commentator states “If the practitioner would examine either the Internal Revenue Code or the Treasury Regulation designed to interpret the Code, they will not find the use of the term ‘Insurance Trust’ or the term ‘ILIT.’” For a detailed analysis of the ILIT see the Main Library Section 4. Estate Planning Techniques H—Life Insurance Trusts.
For the complete blogticle and its analysis, see AdvisorFYI
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Posted in Estate Tax, Insurance, Trusts | Tagged: Business, estate planning, Internal Revenue Code, life insurance, Life insurance trust, tax, Treasury Regulation, United States | Leave a Comment »
Posted by William Byrnes on September 21, 2010
Why is this Topic Important to Wealth Managers? Estate Planning almost always involves some consideration of legal trust(s). It is essential that wealth managers understand the purpose for trusts and the ways trusts can be used in a comprehensive financial plan. By example, ILITs can be “an effective estate planning device” because, “life insurance proceeds [are not included] in the insured’s estate.”
We invite you to read about some common uses of trust in estate planning, such as Irrevocable Life Insurance Trusts, and analysis at AdvisorFYI.
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Posted in Insurance | Tagged: estate planning, Estate Planning and Probate, financial planning, ILIT, insurance, life insurance, Wealth Management | Leave a Comment »
Posted by William Byrnes on September 19, 2010
Life insurance ownership has hit a fifty-year low, according to the August-released Trends in Life Insurance Ownership, a LIMRA study administered once every six years. But do the economic clouds have a silver—or better yet, gold—lining?
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Life Insurance Ownership Hits Fifty-Year Low
After reading the analysis, we invite your questions and comments about policies maturing after age 100 by posting them below, or by calling the Panel of Experts.
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Posted in Insurance | Tagged: Agents and Marketers, financial planning, Financial services, insurance, Life, life insurance, producers, Wealth Management | Leave a Comment »
Posted by William Byrnes on September 18, 2010
The IRS released proposals for FATCA guidance on August 27, 2010, in Notice 2010-60. The notice outlines the shape of the regulations and raises grave concerns for a wide swath of transactions that have an offshore component— from foreign investments to captives and beyond.
Today’s analysis by our Experts William Byrnes and Robert Bloink is located at AdvisorFX Journal IRS Proposed FATCA Guidance Expands Offshore Compliance Initiatives.
After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.
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Posted in Compliance, information exchange | Tagged: Business, FATCA, Internal Revenue Service, law, offshore, tax, Tax Negotiation and Representation | Leave a Comment »
Posted by William Byrnes on September 17, 2010
Why is this Topic Important to Wealth Managers? Provides discussion on current situation of federal tax “stand-off” as it relates to clients’ planning objectives. Gives insight into market participants current choices in dealing with the Tax Cut dilemma.
Congress’ inaction is causing concern for many high net worth taxpayers. Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington says, “uncertainty over taxes means some individuals are ‘vulnerable to hysteria’ ”. And that some financial advisers are urging clients into “unnecessary or unwise transactions.” [1] With “[a]n estimated 315,000 U.S. taxpayers earn more than $1 million, according to the Joint Committee on Taxation”, it leaves a lot of room for opportunity and error.
Read the analysis at AdvisorFYI
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Posted in Tax Policy | Tagged: Economic, Joint committee, Net worth, tax, Taxation, United States, United States Congress, Washington | Leave a Comment »
Posted by William Byrnes on September 16, 2010
Why is this Topic Important to Wealth Managers? Provides an overview of how the pending tax cut provisions will affect the national economy and your clients as a part of it. Discusses generally the relationship between tax and Congressional budget as they relate to the taxpayer burdens.
In the face of bailouts, new legislation and regulation, and a stalling economy, one area, taxes, is certainly being discussed among the public scuttlebutt. Specifically, the Bush Era Tax Cuts are the center of attention because they will sunset or expire, without further legislative action by the end of this year.
Read the full analysis at AdvisorFYI
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Posted in Tax Policy, Uncategorized | Tagged: Budget, Business, Economic, Economy, Politics, tax, Taxation, United States | Leave a Comment »
Posted by William Byrnes on September 15, 2010
Although, Reagan’s administration saw higher growth in total, and annually, on average, than that of the previous and post 8 years of his term, his administration’s numbers are still below the 50 year trend, as well as the terms of some other Presidents, notwithstanding the unsupportive data on the short term effects of the tax cuts. However, there is a lack of conclusive evidence, therefore, to determine that a decrease in capital gains tax rates will have the short or long term affect of increasing total GDP. Yet, neither will an increase in the rate increase tax revenues.
We invite you to read the study and analysis at AdvisorFYI
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Posted in Tax Policy | Tagged: Business, Capital gains tax, Gross domestic product, income tax, Politics, tax, Taxation, United States | Leave a Comment »
Posted by William Byrnes on September 14, 2010
Why is this Topic Important to Wealth Managers? Author Ben Terner of the Panel of Experts offers detailed information that has a direct affect on clients’ planning objectives as it relates to estate and gift tax. Provides a general discussion as well as detailed analysis of the current law and the affect of Congress’ current indecision.
Generally, “[g]ross income does not include the value of property acquired by gift, bequest, devise, or inheritance.” [1] Which means gift income or inheritance income received by the beneficiary is not taxable income to the individual who receives property by such gift, bequest, devise, or inheritance. [2] “Although the donated or inherited property itself is not taxable, income derived from such property is includable in gross income.” [3]
Read the analysis at AdvisorFYI
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Posted in Tax Policy | Tagged: Congress, gift tax, law, Politics, tax, Taxation, United States, United States Congress | 2 Comments »
Posted by William Byrnes on September 13, 2010
Why is this Topic Important to Wealth Managers? Provides a basic overview of the tax cut provisions that are in effect but set to expire by the end of this year. Helps financial professional understand implications regarding client’s estate and personal plans in consideration of the Bush Tax Cuts.
As busy as Congress has been over the last year, it’s “finally turning its attention to the expiring 2001 and 2003 tax cuts”, says Robert Rubin who is co-chairman of the Council on Foreign Relations and former Secretary of the U.S. Treasury. Read the entire analysis at AdvisorFYI
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Posted in Tax Policy | Tagged: Bush Tax Cuts, Congress, Jobs and Growth Tax Relief Reconciliation Act of 2003, Robert Rubin, tax, Taxation, United States, United States Congress | Leave a Comment »
Posted by William Byrnes on September 12, 2010
The IRS’ Rev. Proc. 2010-28 finally provides guidance on life insurance contracts that now include maturity dates extending well beyond the insured’s 100th birthday. The IRS Revenue Procedure addresses the actuarial realties of increased longevity, but more importantly it helps clarifies when policy distributions will or will not be taxable to the insured.
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Safe Harbor for Policies Maturing After Age 100
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Posted in Compliance, Insurance | Tagged: elderly care, life insurance | Leave a Comment »
Posted by William Byrnes on September 11, 2010
In the face of opposition by the Obama administration to extending the Bush tax cuts, analysis recently released by the Congressional Budget Office (CBO) supports extending the breaks for another few years. Douglas Elmendorf, director of the CBO, believes that eliminating the tax cuts in a stagnant economy may hamper growth, and that continuing the cuts beyond December 31st sets the stage for some economic recovery next year: “Under that … scenario, economic growth would be stronger next year; unemployment would be lower next year.”
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal CBO Analysis Supports Extending Tax Cuts
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Posted in Tax Policy, Uncategorized | Tagged: income tax, tax policy | 1 Comment »
Posted by William Byrnes on September 10, 2010
A capitalized entity sale to an intentionally defective grantor trust, utilizing the leveraged purchase of fixed-term life insurance policy to be owned by, and controlled for, the successor generations in order to ensure the efficient maturity of the plan.
Today’s analysis by our Expert by Don Goode, CMO is located at AdvisorFX Journal Avoid Transfer Taxes with a Capitalized Entity Sale to an IDGT.
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Posted in Insurance, Uncategorized | Tagged: grantor trust, insurance, tax planning | Leave a Comment »
Posted by William Byrnes on September 10, 2010
This article explores the development of life insurance in America through the Civil War. Many common factors from the old policies and companies are still apparent in the system of Life Insurance underwriting today, including producers, commissions, and premium financing.
Please read my blogticle at Advisor FYI The History of Life Insurance in America: Producers, Commissions, & Premium Financing
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Posted in Legal History | Tagged: history, life insurance | Leave a Comment »
Posted by William Byrnes on September 9, 2010
This article continues the exploration of life insurance in America. Here the development of life insurance companies as compared to individuals covering the risk leads to new underwriting standards and objectives.
Please read my blogticle at Advisor FYI The History of Life Insurance in America: Insurance Companies
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Posted in Legal History | Tagged: history, life insurance | Leave a Comment »
Posted by William Byrnes on September 8, 2010
This article explores the new development of actuarial analysis to improve life underwriting standards. The life companies writing insurance in the early period of America experienced significant growth and created the beginnings of the policies we recognize today.
Please read my blogticle at Advisor FYI The History of Life Insurance in America: New Standards
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Posted in Legal History | Tagged: history, life insurance | Leave a Comment »
Posted by William Byrnes on September 7, 2010
This article continues the exploration of life insurance in America. In this chapter we follow the development of life insurance itself and its growth and development from a simple concept to complex arrangements. Learn about how the creation of insurance markets in the Colonies led to the development of life insurance as we know it today.
Please read my blogticle at Advisor FYI The History of Life Insurance in America: Development of a New Product
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Posted in Legal History | Tagged: history, life insurance | Leave a Comment »
Posted by William Byrnes on September 6, 2010
In a turn from addressing weekly subjects like ‘Alternative Risk Transfer’ and ‘Independent Contractors’, this week our AdvisorFYI blog will provide the financial advisor with the history of life insurance in America. AdvisorFX Journal will focus on avoiding transfer taxes with a capitalized entity sale to a defective grantor trust.
This article explores the beginnings of life insurance in America. The foundations of life insurance is actually found in other areas of risk management at the end of the 18th century. Follow along as we take a tour though history and examine how insurance evolved to be the way it is today. Read it as The History of Life Insurance in America: The Beginning
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Posted in Legal History | Tagged: history, life insurance | Leave a Comment »
Posted by William Byrnes on September 5, 2010
Why is this Topic Important to Financial Professionals? Provides a basis for creative ideas to share with clients to create an overall more efficient insurance management plan. Offers examples of common alternative risk transfer techniques that are cost effective and generally easy to implement.
Please read my blogticle at Advisor FYI Stop-Loss in Alternative Risk Transfer
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Posted in Uncategorized | Tagged: risk transfer, stop gap, stop loss | Leave a Comment »
Posted by William Byrnes on September 4, 2010
If enacted, Congressman Lloyd Doggett’s proposed H.R. 5890, the Long-term Care Insurance Reform Act of 2010 (Long-Term Care Act), would have a drastic impact on insurers and producers who sell long-term care insurance.
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Long-term Care Insurance Reform Act of 2010
After reading the analysis, we invite your questions and comments about indexed annuities by posting them below, or by calling the Panel of Experts.
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Posted in Insurance | Tagged: long term care insurance | Leave a Comment »
Posted by William Byrnes on September 3, 2010
Why is this Topic Important to Financial Professionals? All businesses, as well as individuals face some risk, and that form can vary greatly. Knowledge and identification of certain risks can help position clients in better risk management positions as apposed to ignoring them.
Please read my blogticle at Advisor FYI Risk and Self-Insurance
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Posted in Insurance, Uncategorized | Tagged: reinsurance | 1 Comment »
Posted by William Byrnes on September 2, 2010
The Private Fund Investment Advisers Registration Act of 2010, part of the Wall Street Reform Act, will require registration of many hedge fund manager who previously escaped registration with the SEC. Hedge fund, and other private fund, managers who do not fit into one of the Act’s exemptions will be required to register with either the SEC or a state regulatory agency. Advisers to larger funds will be required to register with the Securities and Exchange Commission (SEC), while advisers to smaller funds will be required by the Act to register at the state level.
Today’s analysis by our Experts Robert Bloink and William Byrnes is located at AdvisorFX Journal Hedge Fund Must Now Register with the SEC Under the New Wall Street Reform Act (CC 10-45)
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Posted in Compliance | Tagged: hedge funds | Leave a Comment »
Posted by William Byrnes on September 1, 2010
Why is this Topic Important to Financial Professionals? “The ART market unites the risk management and product development skills of financial institutions, insurers and reinsurers with the capital of global investors to give corporate risk managers the best possible means of managing financial and operating risks.” [Source: Bimaquest – Vol. IV Issue I1, 37, 44. July 2004.]
Please read my blogticle at Advisor FYI Alternative Risk Transfer Basics
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Posted in Uncategorized | Leave a Comment »
William Byrnes' Tax, Wealth, and Risk Intelligence 