Archive for the ‘Wealth Management’ Category
Posted by William Byrnes on October 19, 2011
Although at least 25 percent of all US retirement assets are held in personal retirement accounts (IRAs), until now, only limited data existed on asset allocations in IRAs. Consequently, the retirement prospects of retirees owning IRAs have been a mystery.
New developments from the Employee Benefit Research Institute (EBRI) gives us a preview into self-directed accounts like IRAs, providing hard data on the investing behavior of account owners and giving us insight into common problem areas in these accounts.
EBRI’s database includes information on 11.1 million individuals’ 14.1 million individual retirement accounts. Assets in the tracked accounts amount to $732.9 billion.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of IRAs in Advisor’s Journal, see Maximize IRA Stretch with Individual Inherited IRA Accounts (CC 10-69) and To Convert or Not to Convert, That is the Question (CC 07-40).
For in-depth analysis of IRAs, see Advisor’s Main Library: A – Introduction to Individual Retirement Plans (IRAs).
Posted in Taxation, Wealth Management | Tagged: Business, Individual Retirement Account, Pension, Retirement, Roth IRA, tax, Traditional IRA, TurboTax | Leave a Comment »
Posted by William Byrnes on October 6, 2011
“Men Are From Mars, Women Are From Venus,” goes the saying from the popular self-help book. But in a recent ruling, the European Court of Justice said that, although statistically verifiable, you’d better not acknowledge the 100 million mile (sorry, kilometer) gap between men and women when you’re pricing life insurance premiums.
The highest court in the EU ruled earlier this year that the long-standing practice of basing insurance premiums on gender is sex discrimination that is prohibited under EU law. Despite hundreds of years of data verifying the simple fact that women live longer than men, insurance carriers in the EU will soon be prohibited from considering gender when setting insurance premiums.
Under EU law, “[e]quality between women and men must be ensured in all areas, including employment, work and pay.” The European policy generally has been applied to remove gender discrimination in the workplace. But a 2004 European Directive “prohibits all discrimination based on sex in the access to and supply of goods and services.” And that directive has been specifically applied to access to life insurance.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of the Life Insurance Gender Gap in Advisor’s Journal, see Is the Life Insurance Gender Gap Really Closing? (CC 11-68).
Posted in Wealth Management | Tagged: European Court of Justice, European Union, European Union law, Financial services, Gender, insurance, life insurance, Sexism | 1 Comment »
Posted by William Byrnes on October 5, 2011
Both sides of the political spectrum agree that corporate tax reform is a priority.For reform to happen, tough choices are needed from Washington. Reform would develop a system that forces multinational corporations to pay their fair share without hurting US competitiveness in the world markets. Overtax multinational corporations, and they’ll move their operations overseas; under-tax and you’ll reduce revenue that is sorely needed by the US government.
As part of the ongoing debate and investigation of the US corporate tax system, the U.S. House Committee on Ways and Means is hearing testimony from tax experts on the US tax system and alternatives.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of corporate tax reform issues in Advisor’s Journal, see Obama’s Blue Ribbon Debt Commission Proposes Complete Overhaul of the Tax Code (CC 10-95).
For in-depth analysis of US Corporate Tax, see Advisor’s Main Library: A – The Corporate Income Tax.
Posted in Taxation, Wealth Management | Tagged: Corporate tax, Multinational corporation, Republicans, tax, United States, United States Congress, Washington, White House | Leave a Comment »
Posted by William Byrnes on October 4, 2011
A commonly known characteristic of annuities is providing retirees retirement income security. However, a more complicated aspect is deciding exactly how much of a retiree’s nest egg should be allocated to an annuity to reduce the person’s probability of outliving their retirement income.
The Employee Benefits Research Institute takes some of the guesswork out of allocation in a study released this month. The study analyzes the impact of longevity and immediate annuities on retirement income adequacy. The study finds that the “optimal level of annuitization and asset allocation that would give a desired level of confidence that people will have enough retirement income, based on the three different types of risk: investment income, longevity, and long-term care.”
The study’s results offer a prescient guide for advisors looking to maximize their client’s retirement success through annuities. Although parts of the study are quite technical, briefly reviewing the results can be enlightening.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of annuities in Advisor’s Journal, see Drama Over the “Drawbacks” of Annuities (CC 11-62).
Posted in Wealth Management | Tagged: Business, Financial services, Income, insurance, Life annuity, Long-term care, Pension, Retirement | Leave a Comment »
Posted by William Byrnes on October 3, 2011
A stranger-owned life insurance promoter won a big victory when the California Court of Appeals ruled 2-1 that California’s 2009 anti-STOLI law does not apply to policies issued before the statue was enacted.
The ruling was issued by the 4th Appellate District in an appeal on the case: The Lincoln Life and Annuity Company of New York vs. Jonathan S. Berck, as Trustee, etc, Case No. D056373 (17 May 2011).
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of STOLI cases in Advisor’s Journal, see STOLI Scheme Lands Insurance Agent in Jail (CC 11-92).
Posted in Wealth Management | Tagged: Business, California, California Court of Appeal, Financial services, insurance, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on September 30, 2011
The Tax Court recently determined that the fair market value (FMV) of a life insurance policy distributed by a terminated 419 welfare benefit plan is reduced by surrender charges. [Lowe v. C.I.R., T.C. Memo. 2011-106 (2011)].
This ruling strengthens the Tax Court’s position on surrender charges that was enunciated in Schwab v. Commissioner [Michael P. Schwab et ux. v. C.I.R., 136 T.C. No. 6 (2011)]. The IRS continues to challenge taxpayers who apply surrender charges to reduce or eliminate their tax liability when a policy is distributed to them by a welfare benefit plan. However, this ruling adds another degree of certainty to the FMV calculation.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of Tax Court rulings in Advisor’s Journal, see Tax Court Revives Partnership Self-Employment Tax Debate (CC 11-56).
Posted in Insurance, Wealth Management | Tagged: accounting, Business, Internal Revenue Service, IRS, tax, Tax Court, United States, United States Tax Court | Leave a Comment »
Posted by William Byrnes on September 29, 2011
Disciplinary histories are becoming easier to access. Brokers’ disciplinary histories are now prominently displayed for the web savvy public; they’re no longer filed away at the Financial Industry Regulatory Authority (FINRA), where only the most diligent investors will find them. FINRA has made your disciplinary history freely and easily available to the public by launching a web-accessible discipline database.
Whether the easy accessibility of the information is a beneficial will depend on a broker’s history. Those with a clean record will undoubtedly benefit from the easy accessibility of the information and the ease with which clients and prospects can search their record and compare it to others. Those with a negative history, whether deserved or not, may now find themselves on the defensive with prospects more often.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of FINRA complaint and disciplinary procedure in Advisor’s Journal, see FINRA Rule 45-30: Expansive New Complaint Report Requirements (CC 11-96) & Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards (CC 11-08).
Posted in Financial Crimes, Wealth Management | Tagged: Accessibility, Financial Industry Regulatory Authority, FINRA, Twitter, U.S. Securities and Exchange Commission, UBS, United States, Wall Street | Leave a Comment »
Posted by William Byrnes on September 28, 2011
It’s a given that most of us want to extend our lives as long as possible. But our ever-increasing life spans can financially strain pension funds and others that are contingent upon us dying to keep their books balanced.
Pension funds face severe longevity risk. If pensioners live longer than expected, payouts from the funds could eclipse the estimated cost of keeping the funds stable. Worldwide, $17 trillion of pension funds – $23 trillion in assets – is exposed to longevity risk.
But the big banks—including Goldman Sachs, JPMorgan Chase, and Deustsche Bank—are coming to the rescue by packaging that longevity risk and selling it to investors; and they’re counting on investors being interested in gambling on death.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of life insurance contracts in Advisor’s Journal, see IRS Guidance Provides Safe Harbor for Policies Maturing After Age 100 (CC 10-51).
For in-depth analysis of pension plans and other qualified employee plans, see Advisor’s Main Library: O – ERISA – FAQs.
Posted in Wealth Management | Tagged: Business, Funds, Goldman Sachs, Internal Revenue Service, Investing, JPMorgan Chase, Pension, Pension fund | Leave a Comment »
Posted by William Byrnes on September 27, 2011
On September 17, 2008, $140 billion was drawn out of money market accounts by investors who were transferring their funds to U.S. Treasuries. The following day, the FDIC, realizing that money market accounts were being withdrawn in record amounts, deposited over $100 billion into the system.
But after realizing that an influx of cash wouldn’t be enough to prevent a collapse, the Treasury stepped in with a $250,000 guarantee per money market account. If the Treasury hadn’t taken this action, $5.5 trillion could have been drawn out of the market, which could have collapsed the entire U.S. economy.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of money market accounts in Advisor’s Journal, see How to Increase the FDIC $250,000 Permanent Guarantee (CC 10-67).
For in-depth analysis of the Dodd-Frank Act, see Advisor’s Main Library: The Dodd-Frank Wall Street Reform and Consumer Protection Act: An Analysis.
Posted in Wealth Management | Tagged: Dodd-Frank, Dodd–Frank Wall Street Reform and Consumer Protection Act, FDIC, Federal Deposit Insurance Corporation, Money market account, September 18 2008, Treasury, United States Treasury security | Leave a Comment »
Posted by William Byrnes on September 26, 2011
The Obama Administration’s 2012 federal budget proposal has revived two budget proposals that recent scandals have directed a slew of regulatory attention on private placement. Considering examinations of private placements recently being characterized by a FINRA executive as a “major, major initiative, it would seem strange for the Securities and Exchange Commission (“SEC”) to consider relaxing rules for marketing private placements.
Nevertheless, that’s exactly what SEC Chairman Mary Schapiro told members of Congress the agency is planning.
Speaking before the U.S. House of Representatives Committee on Oversight and Government Reform, Shapiro said that the SEC is going to “take a fresh look” at rules relating to private placements and other securities offerings, both public and private. Specifically, she said that the agency will reconsider the private placement public marketing ban and the 500-investor threshold that categorizes a company as “public.”
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of private placements in Advisor’s Journal, see Private Placements Becoming Much Riskier for Firms (CC 11-78) and Private Placements Becoming Much Riskier for Firms (CC 11-78).
Posted in Tax Policy, Taxation, Wealth Management | Tagged: Chairman, law, Mary Schapiro, Private placement, SEC, Securities and Exchange Commission, U.S. Securities and Exchange Commission, United States Congress | Leave a Comment »
Posted by William Byrnes on September 13, 2011
Dodd-Frank’s whistleblower provisions may be more effective than originally anticipated, but will they lead to increased corporate compliance?
The whistle blower rules have received cristicism from some who believe the procedures will hinder compliance procedures rather than improve them. The liberal Whistleblower provisions have also raised concerns about the already overcommitted SEC being overwhelmed by frivolous claims by employees who view the program as a lottery with multi-million dollar payouts.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of Dodd-Frank updates in Advisor’s Journal, see Is Barney Frank’s Resolve to Implement Dodd-Frank Weakening? (CC 11-95).
Posted in Wealth Management | Tagged: Barney Frank, Dodd-Frank, Dodd–Frank Wall Street Reform and Consumer Protection Act, Government, JPMorgan Chase, U.S. Securities and Exchange Commission, United States, Whistleblower | Leave a Comment »
Posted by William Byrnes on September 12, 2011
Should insurance applicants and third-party investors be allowed to make material representations when applying for life insurance, if they can manage to hide misdeeds for at least two years? The United States District Court for the Southern District of New York thinks so.
In the latest STOLI case coming out of the federal courts, judge and jury discussed whether blatant fraud on a life insurance policy application is actionable to invalidate a policy after the contestability period has passed. The jury and court held for the investor in the $5 million case.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of STOLI in Advisor’s Journal, see STOLI Scheme Lands Insurance Agent in Jail (CC 11-92), New York Court of Appeals Upholds STOLI Arrangement (CC 10-106), & Recent STOLI Case Is a Big Win for Insurers (CC 10-59).
Posted in Wealth Management | Tagged: Business, Facebook, insurance, Life, McCann Erickson, Stolichnaya, Twitter, United States | Leave a Comment »
Posted by William Byrnes on September 8, 2011
It’s a given that most of us want to continue living as long as possible. Exercising, eating healthy, and taking every precaution available to extend the gift of life to its limits. Nevertheless, even living a longer life is not exempt from the foreseeable strains it creates financially. Increasing life spans can create problems for pension funds and others that depend on us dying to keep their books balanced.
Pension funds are exposed to severe longevity risk. If pensioners live longer than expected, payouts from the funds could exceed the estimated cost of keeping the funds solvent. Worldwide, $17 trillion of pension funds – $23 trillion in assets – is exposed to longevity risk.
But the big banks—including Goldman Sachs, JPMorgan Chase, and Deustsche Bank—are coming to the rescue by packaging that longevity risk and selling it to investors; and they’re counting on investors being interested in wagering on your death.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of life insurance contracts in Advisor’s Journal, see IRS Guidance Provides Safe Harbor for Policies Maturing After Age 100 (CC 10-51).
For in-depth analysis of pension plans and other qualified employee plans, see Advisor’s Main Library: O – ERISA – FAQs.
Posted in Wealth Management | Tagged: Business, Funds, Goldman Sachs, Investing, JPMorgan Chase, Life expectancy, Pension, Pension fund | Leave a Comment »
Posted by William Byrnes on September 7, 2011
The Financial Industry Regulatory Authority (“FINRA”) has issued a regulatory notice addressing price volatility concerns associated with low-priced equity securities in customer margin and firm proprietary accounts. The notice advises that special attention be given to low-priced equity securities; price volatility is usually associated with low-priced equities because they are inherently volatile.
But what does FINRA consider a“low-price equity,” and what is the impact for you and your clients?
FINRA advises firms to weigh the risks that come with low-priced equity securities before extending credit in strategy-based or portfolio margin accounts. FINRA cautions firms to consider “volatility and concentrated positions in a single customer account and across all customer accounts, as well as the daily volume and market capitalization of each security when imposing ‘house’ maintenance margin requirements.”
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of FINRA-issued guidance in Advisor’s Journal, see Getting Your Feet Wet in the Social Media Market (CC 11-79) & SEC Says “Not So Fast” to Advisor Social Media Marketing (CC 11-40).
Posted in Wealth Management | Tagged: Brokerages, Business, Customer, Financial Industry Regulatory Authority, Investing, Margin (finance), Stock, U.S. Securities and Exchange Commission | Leave a Comment »
Posted by William Byrnes on September 6, 2011
The Obama Administration’s 2012 federal budget proposal has revived two budget proposals that will impact the life insurance business – one affecting Corporate-Owned Life Insurance (“COLI”) and the other affecting carriers’ Dividends-Received Deduction (“DRD”).
In response to concern that the proposals tamper threaten the tax preferred status of life insurance, the Treasury recently issued a letter clarifying that these proposals have relevance only to tax arbitrage issues, not the tax treatment of death benefits.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of corporate life insurance in Advisor’s Journal, see Obama Budget Would Undercut Utility of Life Insurance in Small Business Planning (CC 11-41).
For in-depth analysis of taxation affecting corporations, see Advisor’s Main Library: A – The Corporate Income Tax.
Posted in Wealth Management | Tagged: Business, Corporate-owned life insurance, Financial services, insurance, Life, life insurance, tax, United States | Leave a Comment »
Posted by William Byrnes on September 5, 2011
Life settlements provide a unique source of revenue because their returns are not contingent on the market’s success.
But are they still lucrative in comparison to other municipal finance? Rancho Mirage California City Councilman Scott Hines thinks so.
Under Hines’ plan, the city would issue bonds, with most of the issue proceeds being used to finance city projects. The remaining funds would be invested in life settlements with an aggregate face value equal to the face value of the bond issue. Payouts on the life settlements would then be used to pay back bond principal.
Instead of the typical municipal bond financing arrangement, where tax dollars utilized to pay back both principal and interest on an issue, Hines’ plan would leave taxpayers with only a bill for interest payments.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of life settlements in Advisor’s Journal, see Life Settlement Provider Accused of Falsifying Life Span Reports (CC 11-23).
Posted in Wealth Management | Tagged: Bonds, Business, Finance, Financial services, Investing, Municipal bond, Stocks and Bonds, tax | Leave a Comment »
Posted by William Byrnes on September 2, 2011
FINRA is digging deep into your customer comment box, and starting July 21, nothing will be off limits to the regulator.
Brokerages often expand beyond securities activities to diversify their income streams and broaden the scope of services they offer their clients. Keeping up with the assorted regulators and what are often cumbersome and confusing combinations of rules has always been a chore for those firms.
Not long ago, firms at least have been able to keep their professions separated, dealing, for instance, with securities and insurance regulators as isolated entities with little overlap in their bailiwicks. But increasingly, regulators like FINRA are erasing this dichotomy, peaking into all of a firm’s activities, even activities that are unrelated to the subject of the regulator’s jurisdiction.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of FINRA rulemaking in Advisor’s Journal, see FINRA Plans New Power Grab as SEC Falter (CC 11-67), Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards (CC 11-08), and SEC Approves FINRA Suitability and Know-Your-Customer Rules (CC 11-17).
Posted in Wealth Management | Tagged: Brokerage firm, Business, Financial Industry Regulatory Authority, law, Legal Information, Registered Investment Advisor, Security (finance), U.S. Securities and Exchange Commission | Leave a Comment »
Posted by William Byrnes on September 1, 2011
Facing the onslaught of Republican legislative attempts to weaken Dodd Frank, Barney Frank (D-MA) seems unconcerned. His unwillingness to push for the prompt implementation of Dodd-Frank suggests that his resolve is weakening. And in recent weeks, Representatives have used the implementation lull to introduce a handful of bills that, if passed, would repeal or delay parts of the Dodd-Frank Wall Street Reform Act.
Dodd-Frank implementation was originally scheduled to launch July 21, but Mr. Frank has no reservations against allowing agencies more time to translate the abundant volume of provisions of the reform into regulations. “There’s no gun at their heads. Nobody gets fired,” he stated.
However, by allowing for this delay, Mr. Frank risks giving the Republicans time to repeal Dodd-Frank one provision at a time.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of Dodd-Frank financial reform in Advisor’s Journal, see Republicans Look to Erode Dodd-Frank (CC 11-75).
Posted in Wealth Management | Tagged: Barack Obama, Barney Frank, Dodd–Frank Wall Street Reform and Consumer Protection Act, Government, Republican Party (United States), United States, United States House Committee on Financial Services, Wall Street | Leave a Comment »
Posted by William Byrnes on August 31, 2011
Increased medical loss ratios (MLRs) are devastating health insurance producers’ balance sheets and driving agents out of the health insurance business. As of January, the Obama Administration’s Affordable Care Act increased the MLR requirement imposed on health insurance companies, forcing many carriers to reduce agent commissions by 25 percent or more.
The objective behind imposing MLRs is to ensure that consumers receive the full value of their premium dollars. This is accomplished by implementing a shift in how insurance carriers spend their money. Insurance carries are now required to spend premium dollars on direct medical services, rather than on administrative costs and profits. Under the new MLR program, insurers must spend 80 to 85 cents of every dollar on direct medical services. Insurers who fail to meet the MLR requirement must either adjust their premiums to account for any discrepancies, or refund excess premiums to consumers.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of health care reform in Advisor’s Journal, see Long-term Care Insurance Reform Act of 2010 (CC 10-46), Changes Affecting Large Employers in the 2010 Health Reform Law (CC 10-17), Changes Affecting Business in the 2010 Health Reform Law (CC 10-16), & Changes Affecting Individuals in the 2010 Health Reform Law (CC 10-15).
Posted in Wealth Management | Tagged: Affordable Care Act, Consumer, Employment, Health care, Health care reform, healthinsurance, insurance, United States | Leave a Comment »
Posted by William Byrnes on August 29, 2011
A California insurance agent will spend years behind bars for his part in a stranger originated life insurance (“STOLI”) scheme that swindled six victims out of almost $800,000. In addition to being sentenced to 3 years 8 months in jail, Victor L. Weber, 55, was also ordered to pay restitution to his victims.
In the typical STOLI arrangement, investors or promoters approach seniors to allow investors to purchase life insurance on the seniors’ lives. Insureds are typically enticed to sign on the dotted line by promises of “free life insurance,” cash payments, vacations or other perks. Insureds are usually unable to purchase needed life insurance because their life insurance capacity is occupied by the investor owned policy.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of stranger-originated life insurance in Advisor’s Journal, see New York Court of Appeals Upholds STOLI Arrangement (CC 10-106) & Recent STOLI Case Is a Big Win for Insurers (CC 10-59).
Posted in Wealth Management | Tagged: Agents and Marketers, Business, Business and Economy, Financial services, insurance, Insurance policy, Life, life insurance | Leave a Comment »
Posted by William Byrnes on August 26, 2011
If you’re considering transitioning your book of business to a new firm, maintaining the confidentiality of client information should be your principle concern. Accomplishing a move without becoming the target of a lawsuit can be a daunting task. However, there is a protocol of best practices that if followed correctly can significantly lower the risk of violating confidentiality.
In 2004, three wirehouses – Citigroup Global Markets, Inc. (“Smith Barney”), Merrill Lynch, and USB Financial Services, Inc. – created the Protocol for Broker Recruiting (the “Protocol”). The Protocol’s objective is to protect clients’ privacy and flexibility when choosing Registered Representatives (“RRs”) – especially RRs who are switching firms. By reducing litigation over RRs transitioning to new firms, the high costs associated with competitive recruiting efforts can be minimized and client information can remain protected.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of broker-dealer issues in Advisor’s Journal, see Is a Hybrid Practice Model Right for You? (CC 11-46), What’s Driving the Increasing Appeal of the RIA Model? (CC 11-69).
Posted in Wealth Management | Tagged: Broker-dealer, Citigroup, Financial services, Investment Advisor, Merrill Lynch, Morgan Stanley Smith Barney, Registered Investment Advisor, Smith Barney | Leave a Comment »
Posted by William Byrnes on August 24, 2011
Cerftified Financial Planners (“CFPs”) and CFP applicants can longer hide their discplinary history behind the shield of client confidentiality. At the request of the Certified Financial Planner Board of Standards, Inc. (“CFP Board”), the Securities and Exchange Commission (“SEC”) issued a no action letter that gives brokers and advisors unlimited discretion to share customer complaint information with the Board without fear of reprisal from the SEC. The no action letter eradicates advisors’ ability to assert client confidentiality as a justification for not disclosing customer complaint information to the CFP, giving the Board free-reign to scour members’ backgrounds.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of the financial planning industry in Advisor’s Journal, see Wall Street Reform Act Mandates Study of Financial Planning Industry (CC 10-73).
For in-depth analysis of financial planning concepts, see Advisor’s Main Library: A – The Need For Financial Planning.
Posted in Wealth Management | Tagged: Business, Certified Financial Planner, certified financial planner board of standards, Certified Fire Protection Specialist, Financial plan, financial planning, Financial services, U.S. Securities and Exchange Commission | Leave a Comment »
Posted by William Byrnes on August 22, 2011
The dynamics of the confidentiality is enduring change. Certified Financial Planners (“CFPs”) and CFP applicants can no longer hide their disciplinary histories from the CFP Board under the shield of client confidentiality. At the request of the Certified Financial Planner Board of Standards, Inc. (“CFP Board”), the Securities and Exchange Commission (“SEC”) issued a no action letter that gives brokers and advisors the to share customer complaint information with the Board without fear of reprisal from the SEC. The no action letter removes advisors’ ability to maintain client confidentiality as a justification for not disclosing customer complaint information to the CFP, giving the Board free-reign to scour members’ backgrounds.
What impact will this heightened need for disclosure have on the advisor- client relationship?
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of the financial planning industry in Advisor’s Journal, see Wall Street Reform Act Mandates Study of Financial Planning Industry (CC 10-73).
For in-depth analysis of financial planning concepts, see Advisor’s Main Library: A – The Need For Financial Planning.
Posted in Wealth Management | Tagged: Certified Financial Planner, certified financial planner board of standards, Certified Fire Protection Specialist, Financial plan, financial planning, Financial services, U.S. Securities and Exchange Commission, United States | Leave a Comment »
Posted by William Byrnes on August 19, 2011
The collapse of the secondary market for life insurance during the recent financial crisis left a lot of trusts anxious to dispose of large face value life insurance policies. Trusts that handed back policies in satisfaction of premium finance loans were then struck, along with their grantors, with massive tax bills for what is known as cancellation of indebtedness or cancellation of debt (COD) income.
The IRS recently released proposed regulations that address the income tax treatment of cancellation of debt income of trusts. Although this highly technical area of the law may not be of interest to lay audiences, it is a vital aspect for advisors selling high-value life insurance policies.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of an interesting case involving a premium financed policy in Advisor’s Journal, see Lawsuit Seeks to Hold Insurer Responsible for Suspicious Death (CC 10-101).
For in-depth analysis of life settlements (which can be structured as a premium finance transaction), see Advisor’s Main Library: B—The Life Settlement Industry.
Posted in Wealth Management | Tagged: Financial services, insurance, Internal Revenue Service, IRS, life insurance, Premium Financing, tax, Trust law | Leave a Comment »
Posted by William Byrnes on August 16, 2011
The IRS commenced the Large Business and International Division’s high-wealth industry group (“HNW Initiative”) in October 2009 with the aim of examining high-net worth individuals for income tax compliance. But the Service may be “using more rhetoric than resources,” according to Syracuse University’s Transactional Records Access Clearinghouse (TRAC). TRAC’s April 14 report, based on information compiled from public records, accuses the IRS of having “very skimpy” audit goals for the HNW initiative.
TRAC’s orginal goal was to audit a mere 122 returns for the 2011 fiscal year. However, according to reports, TRAC will fall far short of this modest benchmark, and instead only audit 19% of the projected returns for the first six months of the year.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
Posted in Wealth Management | Tagged: Audit, Fiscal year, Internal Revenue Service, IRS, Syracuse University, tax, TurboTax, United States | Leave a Comment »
Posted by William Byrnes on August 15, 2011
If you’re one of the two out of three financial professionals who are out of the social media loop, you could be missing opportunities to boost your advisory business. Although the SEC and FINRA are cracking down on firms for social media misuse there’s still a wealth of untapped marketing potential for advisors brave enough forge into this new territory.
Social media sites like Facebook, Twitter, and LinkedIn can be used to build opportunities – if you know how to use them to the best of your advantage.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
Posted in Wealth Management | Tagged: Business, Facebook, LinkedIn, Online Communities, Social media, Social network, Twitter, YouTube | Leave a Comment »
Posted by William Byrnes on August 14, 2011
There may be an increased need for caution when offering the newest private placements to clients. FINRA and the SEC are actively examining private placements and the firms that sell them. And if the regulators believe that something is amiss, they won’t hesitate to impose severe fines on everyone involved in the sale. As part of its ongoing sweep of firms that sold interests in failed private placements, FINRA has issued sanctions against two firms and seven individual principals of those firms. FINRA accuses them of causing significant investor losses by failing to conduct a reasonable investigation before offering the private placements for sale to investors.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
Posted in Wealth Management | Tagged: Business, Dodd–Frank Wall Street Reform and Consumer Protection Act, Employment, Financial Industry Regulatory Authority, law, Private placement, Project On Government Oversight, U.S. Securities and Exchange Commission | Leave a Comment »
Posted by William Byrnes on August 13, 2011
The value that consumers place on traditional portfolio managers seem to be rapidly changing. A growing number of consumers are opting for pre-packaged, low-cost portfolio managers. Portfolio-to-go companies can, at least nominally, provide many of the same services as full-service brokerage firms, since the companies are registered as either investment advisors or broker-dealers. Minimal overhead and services allow portfolio managers flexibility to offer those services without the “high” price tag at brick-and-mortar institutions. Portfolios-to-go have seen a surge in popularity recently, bringing in over $3 billion in assets over the past three years. In a world where post-recession fears have almost everyone bargain shopping, are online portfolios-to-go the Walmart of investing, set to dominate the market and phase out traditional wealth managers? Or are these pre-packaged portfolios an opportunity in disguise?
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
Posted in Wealth Management | Tagged: Back Office, Broker-dealer, Brokerages, Business, Financial services, Full Service, Investing, Portfolio manager | Leave a Comment »
Posted by William Byrnes on August 12, 2011
Barry Flagg continues his popular series, this month discussing the cash value of life insurance as a factor of suitability. The desirability of a permanent life insurance product is influenced by the degree of cash value liquidity throughout the life of the policy. All other factors being equal, the higher the liquid cash value after deduction of cost of insurance charges and policy expenses (including contingent surrender charges), the more suitable the policy.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of income taxation of life insurance, see Advisor’s Main Library: D–Gain Or Loss On Surrender Or Sale
Posted in Wealth Management | Tagged: Agents and Marketers, Business, Financial services, insurance, Insurance policy, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on August 12, 2011
Retirement plan sponsors face increasing regulatory scrutiny and significant liability as plan fiduciaries. Can you leverage off these fiduciary concerns and generate advisory business for your firm?
There are a couple of key approaches you can use to address sponsors’ concerns about their fiduciary responsibilities and sell to the plans and their sponsors.
Believe it or not, there are a number of plans that don’t use an advisor—with the plan sponsor choosing to go it alone to save a few dollars. As reported in a previous edition of the Advisor’s Journal, a significant of number of employee retirement plans (19%) don’t use an outside investment advisor.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: 401(k), Business, Compensation and Benefits, Fiduciary, Human Resources, Investment Advisor, Pension, Retirement planning | Leave a Comment »
Posted by William Byrnes on August 8, 2011
Whether or not to give substantial lifetime gifts in 2011 and 2012 is going to be a hot topic between now and the end of 2012. But deciding whether to take advantage of the record high ($5 million) gift, estate and GST tax exclusion amount and low (35%) transfer tax rate isn’t a trivial matter.
Even your most tax savvy clients are going to need help deciding whether to take advantage of the new law.
The problem is that the new law—which was put into place by the Tax Reform Act of 2010—is scheduled to lapse on January 1, 2013. So is it worth taking the risk that Congress will radically change transfer tax laws for years post-2012? And what will happen to your clients’ transfer tax liability if Congress does change the law?
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Congress, Goods and Services Tax (Canada), GST, income tax, law, tax, Transfer tax, United States Congress | Leave a Comment »
Posted by William Byrnes on August 5, 2011
A recent study has blasted the popular belief that lowering your rate will increase your volume of clients. Likely surprising to most, the truth is that lowering your rates could backfire and decrease your attractiveness to potential clients.
PriceMetrix, Inc., a software firm, published the study, which focused on the needs of wealth management firms and their advisors. They considered data from 380 million transactions conducted between 2007 and 2010. Included in the data pool were 1 million fee-based accounts and 4 million transactional accounts totaling over $850 billion in investment assets.
The results of the study show that advisors are miscalculating the appropriate value of their services—and losing money in the process— averaging $20,000 in lost fees.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Financial adviser, Financial services, Investing, Investment, Money Managers, PriceMetrix, Wealth Management | Leave a Comment »
Posted by William Byrnes on August 4, 2011
A large majority (86%) of advisors who are with an independent broker-dealer find the idea of life at an independent registered investment advisor (RIA) appealing, according to a Schwab Advisor Services study released on March 29th. And when the advisor knows someone who has already made the switch, the number who like the idea of making a move to the RIA model jumps to 95%.
One significant consideration for advisors considering a switch to an RIA is regulatory. Those who fully transition to the RIA model will dump FINRA for the SEC. But whether that’s an advantage or downside to the transition is open for debate.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Broker-dealer, Brokerages, Business, Financial adviser, Financial Industry Regulatory Authority, Investing, Registered Investment Advisor, RIA | Leave a Comment »
Posted by William Byrnes on August 3, 2011
Historically, the amount of life insurance purchased by men dwarfed that of women. Although the gender gap is closing, there’s still a discrepancy between the amount of life insurance coverage owned by men and women. A recently released study by the Life Insurance and Market Research Association (LIMRA) revealed that, although men and women own life insurance in nearly equal numbers, and women are working now more than ever, the amount of coverage owned by women is still fewer than men.
Historically, men have been the main source of household incomes; but recent research has revealed that about 30 percent of women earn more money than their husbands. Despite this change, LIMRA’s studies found that women’s life insurance ownership has not increased proportionately. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For in-depth analysis of life insurance in qualified plans, see Advisor’s Main Library: A – Life Insurance in Qualified Plans & 412(i) Plans.
Posted in Wealth Management | Tagged: Agents and Marketers, Business, Business and Economy, Financial services, insurance, Insurance policy, Life, life insurance | Leave a Comment »
Posted by William Byrnes on August 2, 2011
FINRA is continuing its recent power-grab in the face of a largely impotent and underfunded Securities and Exchange Commission. As the next stage in an increasing series of regulations and information reporting requirements, plans are in the works for a new-and-improved examination program that could further increase the information reporting requirements of member firms and significantly increase their compliance burden.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of FINRA regulatory action in Advisor’s Journal, see Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards (CC 11-08), SEC Approves FINRA Suitability and Know-Your-Customer Rules (CC 11-17), & New FINRA Rule Restricts Brokers’ Outside Business Activities (CC 10-110).
Posted in Wealth Management | Tagged: Arbitration, Business, Financial Industry Regulatory Authority, law, Mary Schapiro, Registered Investment Advisor, Securities and Exchange Commission, U.S. Securities and Exchange Commission | Leave a Comment »
Posted by William Byrnes on August 1, 2011
Despite the ever-increasing popularity of social media sites like Facebook and Twitter, social media sites are not yielding the results advisors initially envisioned. In terms of building a stronger client base, social media and cold calling were shown to be ineffective ways of generating new revenue – they tied for last place in the recent study by Advisors Trusted Advisor. The producer-client relationship requires a high level of trust, and the use of social media sites, whether for advertising or networking purposes, can have the tendency of disturbing the producer-client relationship. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Brand awareness, Business, Facebook, Internet Marketing, Marketing and Advertising, Online Communities, Social media, Twitter | Leave a Comment »
Posted by William Byrnes on July 29, 2011
In recent years, the IRS has increased its search for taxpayers who fail to disclose a gift tax return for reportable transactions. Now, the Justice Department’s Tax Division is getting in on the action, initiating an unprecedented fishing expedition and scouring state government records for information that may lead to taxpayers who have failed to file a gift tax return.
The Justice Department hopes to collect the identities of taxpayers who have gifted real property to relatives without reporting the transaction to the IRS. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Taxation, Wealth Management | Tagged: accounting, Audit, gift tax, Internal Revenue Service, IRS, tax, TurboTax, United States | Leave a Comment »
Posted by William Byrnes on July 28, 2011
A significant of number of employee retirement plans don’t use an outside investment advisor, often because of the cost. Demonstrating your firm’s flexibility and splitting fiduciary responsibility for the plan could be the key to securing those underserved plans. Customizing your level of service gives these plans what they need—advice—while allowing you to prune services that aren’t cost effective for your firm.
According to the Retirement Plan Survey 2011, released by Grant Thornton LLP, Drinker Biddle & Reath and Plan Sponsor Advisors, greater than 50% of plans use a limited scope investment advisor and 14% of plans use an outsourced investment advisor. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Certified Financial Planner, Grant Thornton LLP, Human Resources, Investment Advisor, Pension, Retirement planning, United States | Leave a Comment »
Posted by William Byrnes on July 27, 2011
A recent Businessweek article highlighting what it calls the “drawbacks” of annuities is the latest in a long line of articles panning the financial products. But do annuities—especially variable annuities—endure justified scrutiny, or are annuities just an easy target of the mainstream media? And, where annuities are the right choice for your clients, how can you counter the negative press to help them make the right investing decision? Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: annuities, Business, Cash flow, Financial services, insurance, Life annuity, Pension, Retirement | Leave a Comment »
Posted by William Byrnes on July 26, 2011
The New York Department of Insurance, Office of General Counsel, stated on February 25, 2011 that insurance carriers cannot refuse to convert a term policy to a permanent policy on the ground that the policy will be sold on the secondary market. The debated issue was whether the converted policy is a “new” policy that must satisfy the insurable interest requirement. Nevertheless, this ruling will not affect all term policies, since many term life insurance policies are not convertible. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Financial services, insurance, Insurance policy, Life, life insurance, Policy, term life insurance | Leave a Comment »
Posted by William Byrnes on July 25, 2011
Republicans on the House Financial Services subcommittee are retracting the issue of Registered Investment Advisor user fees, referencing the cost to small businesses. But the SEC maintains that it cannot conduct adequate RIA examinations without either charging user fees or delegating examination authority to an SRO that will charge user fees. The argument over user fees was prompted by the release, earlier this year, of the Dodd-Frank mandated SEC study on enhancing RIA examinations. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Canada, Food and Drug Administration, Medical device, Registered Investment Advisor, Tony Clement, Treasury Board, User fee | Leave a Comment »
Posted by William Byrnes on July 22, 2011
An executive top-hat plan can be a great way to become desirable to highly qualified executives or supplement a business owner’s compensation. However, these plans are accompanied with a significant downside. Because the plans are generally unfunded, major events at the sponsor, like a sale or insolvency, can decimate a plan and leave participants empty handed. The effect on a top-hat plan when a sponsor liquidates its assets is illustrated by a recent Seventh Circuit Court of Appeals case. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Compensation and Benefits, Crochet, Government, Human Resources, Small business, Top hat, United States | Leave a Comment »
Posted by William Byrnes on July 21, 2011
The Tax Court has reopened the question of whether status as a limited partner entitles them to an exemption from self-employment taxes—an issue that’s been idle for over 13 years. The Tax Court recently declared that status as a limited partner does not necessarily exempt a partner from self-employment taxes. Instead, the exemption is derivative on how substantial of a role the partner played in the partnership business. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of small businesses in Advisor’s Journal, see IRS Announces Lenient Lien Program for Small Business (CC 11-48)
For in-depth analysis of partnership taxation, see Advisor’s Main Library: H–Partnership Taxation
Posted in Taxation, Wealth Management | Tagged: Business, Internal Revenue Service, IRS tax forms, Limited partnership, Self-employment, Small business, tax, TurboTax | Leave a Comment »
Posted by William Byrnes on July 20, 2011
Producers and carriers may soon face more stringent compliance requirements, and increased liability for making unsuitable recommendations, when selling annuities. The regulatory change will happen at the state level as a result of the National Conference of Insurance Legislators (NCOIL) executive committee voting unanimously on March 6 to adopt the National Association of Insurance Commissioners (NAIC) Suitability in Annuity Transactions Model Regulation. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of life insurance regulations in Advisor’s Journal, see NCOIL Adopts Model Act Requiring Insurers to Inform Consumers of Settlement Options (CC 10-104).
Posted in Wealth Management | Tagged: Business, Consumer, Financial services, Government, insurance, life insurance, National Association of Insurance Commissioners, United States | Leave a Comment »
Posted by William Byrnes on July 19, 2011
Individuals in the fastest growing class of investors—the mass affluent—need your advice. According to a recent report, there is a void in representation by financial professionals this group. As a corollary, they lack confidence in their ability to meet their financial goals, making them desirable candidates for professional services.
The mass affluent are investors occupying the upper tier of the mass market—the biggest group of consumers. But “mass affluent” isn’t just a synonym for “upper middle-class”; it is a subset of the upper middle-class with $50,000 to $250,000 in “investable assets.”
Depending on your career trajectory, the mass affluent can be resourceful in establishing the foundation for a successful practice. A majority (55 percent) of the mass affluent believe they will be wealthy one day. Although only a small number of the mass affluent will move into high-net-worth territory, you can get in on the ground floor of the upward career trajectory of those who will. Read this complete analysis of the impact at AdvisorFX(sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Financial services, Investing, Mass affluent, Social media, United States, Upper middle class, Wealth | Leave a Comment »
Posted by William Byrnes on July 18, 2011
Which prevails when it is time to make a claim, a last in time divorce decree or a beneficiary designation made at the time of the application years ago? A wife had her estranged husband, sign a separation and property-settlement agreement to release him from any claims to her estate or property. When the wife passed away, her former husband sought the life insurance proceeds, as did her mother and son. The answer is provided in a cautionary tale of beneficiary designations told in a recent 4th circuit case.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber)
For previous coverage of beneficiary designations in Advisor’s Journal, see The Effect of Divorce on Life Insurance Beneficiary Designations (CC 10-39) & Don’t Overlook Beneficiary Designations and Settlement Options (CC 09-28).
For in-depth analysis of beneficiaries and settlement options, see Advisor’s Main Library: D – Problems In Beneficiary Designations.
Posted in Wealth Management | Tagged: Beneficiary, Business, Death, Financial services, insurance, Insurance policy, Life, life insurance | Leave a Comment »
Posted by William Byrnes on July 18, 2011
A recent IRS Revenue Ruling provides an important reminder for us of the rules for deducting interest that’s paid or accrued on a business life insurance policy loans. Knowing how and when policy loan interest is properly deductible can mean the difference between closing the sale in the first instance and an IRS audit down line if these rules are ignored.
In general, interest paid on a life insurance policy loan is not deductible for income tax purposes; but there are some exceptions for life insurance purchased for business purposes. The deductibility of policy loan interest has changed significantly over the past 20 years, so an intimate knowledge of the specifics is imperative when selling or transacting on a policy that’s issued to a business. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous Advisor’s Journal coverage of the exception to the pro rata limitation on interest deduction, see Obama Budget Would Undercut Utility of Life Insurance in Small Business Planning (CC-11-41).
For in-depth analysis of corporate-owned life insurance, see Advisor’s Main Library: D—Deductibility Of Business Insurance Premiums, E—Premiums As Taxable Income To The Insured & F—Taxability Of Corporate Owned Life Insurance Proceeds At Death.
Posted in Taxation, Wealth Management | Tagged: Agents and Marketers, Business, Financial services, insurance, Insurance policy, Internal Revenue Service, life insurance, Taxable income | Leave a Comment »
Posted by William Byrnes on July 17, 2011
Last month, Advanced Market expert Barry Flagg talked about the relevance of policy cash values to the overall suitability of a permanent life insurance policy. This month, he expanded on the cash value topic by addressing how cash value is generally a product of the number of cash value investment options, the historical performance of such cash value investment options, and the cost-effectiveness of the various cash value allocation options.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of valuation in Advisor’s Journal, see Life Insurance Valuation (CC 10-09).
Posted in Wealth Management | Tagged: Agents and Marketers, Business, Financial services, insurance, Insurance policy, Life, life insurance, United States | Leave a Comment »
Posted by William Byrnes on July 15, 2011
Investment advisors and broker-dealers may be required to disclose their incentive-based compensation programs under proposed rules approved by the Securities and Exchange Commission (SEC) on March 2. The proposed rule is the latest in a series of advisor and broker-dealer reporting rules issued under the mandate of the Dodd-Frank Wall Street Reform Act.
The rapidly increasing compliance obligations for advisory firms and B-Ds has the capability to drastically modify business practices at affected firms. Many will be forced to reconfigure their entire compensation program to comply with the new rules.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of advisor reporting requirements in Advisor’s Journal, see Advisors Hit with Another Round of SEC Reporting Rules (CC 11-30).
Posted in Wealth Management | Tagged: Broker-dealer, Business, Dodd–Frank Wall Street Reform and Consumer Protection Act, Executive pay, Investing, Investment Advisor, US Securities and Exchange Commission, Wall Street | Leave a Comment »
Posted by William Byrnes on July 14, 2011
Want to minimize a high-net-worth client’s transfer tax liability using a GRAT that is at least partly funded with nonqualified stock options? Although the strategy could save your client hundreds of thousands in gift and estate tax liability, recommending it could cost you and your client hundreds of thousands in legal fees.
Why? Recommending that your client use a GRAT funded with nonqualified stock options would violate the SOGRAT patent, U.S. Patent 6,567,790.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
Posted in Wealth Management | Tagged: Business, Capital gain, Derivatives, Grantor Retained Annuity Trust, Incentive stock option, Investing, Options, United States patent law | 1 Comment »
William Byrnes' Tax, Wealth, and Risk Intelligence 