Archive by Author

How Demanding Are Your Firm’s Year-End Processes?

Posted on January 14, 2009 by in General

I apologize for the infrequent updates lately to FPPad.  So what’s been keeping me so busy in the last few weeks?

The end of a calendar year is especially busy for most independent wealth management firms, and ours is no exception.  Between closing the books, communicating quarterly estimated tax payment information, creating client reports, and calculating fees, there are lots of processes and procedures to follow to ensure that nothing falls through the cracks.

In addition, when I’m out of the office, I’m very busy coordinating the final sessions for the FPA of Oregon & SW Washington’s annual Mid Winter Conference, plus I’m teaching AARP TaxAide classes every Saturday.  So I think I have good excuses for not posting!

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IRS Revenue Procedure May Affect Client REIT Holdings

Posted on January 8, 2009 by in General

I recently learned about a recent IRS Revenue Procedure from one of our custodians.  The document is Revenue Procedure 2008-68 and addresses the concern REITs (Real Estate Investment Trusts) have regarding their ability to satisfy the taxable income distribution requirements.

A REIT is required to distribute 90% of its taxable income, including any net capital gains, to its shareholders each year.   If it fails to do so, the REIT may lose its ability to reduce or eliminate its corporate income taxes.  Due to the credit crisis affecting the economy, REITs are struggling to raise enough capital in order to distribute the mandatory 90% of taxable income in cash.

As a result of the procedure, the IRS will now allow REITs to distribute stock, in addition to cash, as a dividend and the entire amount will be treated as satisfying the REIT distribution requirements.

What does this mean for you and your clients?

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Don’t Unsuspectingly Broadcast Your Clients’ Most Sensitive Data

Posted on January 6, 2009 by in Technology

Thanks to one of my readers, Bob, for reminding me about potential security issues that don’t receive much attention in the financial adviser space.

If you’re using a standard (i.e. not Bluetooth) wireless keyboard in the office, anything you type is not secure.  This includes all the Social Security Numbers, account numbers, birthdays, email addresses, etc. for your clients that you type day in and day out.

See this YouTube video featuring Steve Gibson of GRC.com addressing the ease at which wireless keyboards can be compromised.

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Streamline Your Practice in a Recession

Posted on January 4, 2009 by in Efficiency, Practice Management

Readers of FPPad.com know that we’re in a recession.  Not very many needed the National Bureau of Economic Research to tell them that we’ve been in one since December 2007.  While little can be done to cure the ills of the global economy, advisers can evaluate how their business is positioned in order to thrive in the face of economic pressures.

I want to comment about positioning a practice in a recession after reading David Drucker’s article on Morningstar Advisor, Practice Management in a Recession.

Drucker interviewed two broker-dealer firms to discover what their reps are doing to respond to the recession.  What are they doing?  First, reps are committed to continued spending on marketing to new clients, and second, they are looking to reduce operational inefficiencies in their practice.

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Valuing the Economic Impact of the Worker, Retiree, and Employer Recovery Act of 2008

Posted on December 24, 2008 by in Taxes

H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008, was signed by President Bush on December 23. The proposed bill, which in part offers a waiver of the 50% penalty for failing to take a minimum required distribution, has now become law.

Note that I write minimum required distribution, when most write required minimum distribution, commonly abbreviated RMD.  Much of the tax information published by the IRS prior to 2008 referred to the distribution in the former state (MRD) which is how I learned it over the past decade.  Alas, it appears the IRS has changed its references to the more common RMD beginning with 2008 publications.

I first blogged about the House passage of this bill here.

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CFP Board Proactive Exam Communication

Posted on December 23, 2008 by in Professional Development

In response to several communication issues regarding the progress of the July 2008 exam results, CFP Board is releasing updates on its website regarding the 2-day CFP® Certification Examination.

The most recent exam was held November 21-22, 2008.  On December 22, CFP Board issued the following statement:

Potentially problematic exam questions have been reviewed by our psychometricians and subject matter experts, and scoring dispositions for these items have been determined, with scoring modifications where appropriate. These modifications are being applied to generate individual score reports.

Click here to view the latest updates regarding the November CFP® Certification Examination.

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Yes, Twitter Can Help Financial Planners

Posted on December 19, 2008 by in Technology

Back in May I wrote about joining the Twitter bandwagon to see whether or not this new social media outlet had any relevance to my daily responsibilities.  After about 400 updates in my Twitter profile, I struck gold.

Over the last week, our firm has been implementing tax loss harvesting strategies across our entire book of assets.  As one might imagine, there are many, many individual trades to identify, submit, track, and confirm, as we want to ensure that all activity is executed without errors for our clients.

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Explore the Independent Advisor Technology Forum

Posted on December 14, 2008 by in Efficiency, Practice Management, Technology

04/18/2012 UPDATE: The Independent Advisor Tech Forum is no more, as the domain registration has expired. Still, you can get great information on advisor technology right here! Subscribe today.

In Friday’s Tech Bits column on InvestmentNews, Davis Janowski highlighted a new technology-oriented website targeted “for financial advisors affiliated with a broker dealer and/or wirehouse who are interested in becoming independent.”

Click here to visit Independent Advisor Tech Forum. (link removed)

Independent Advisor Tech Forum is a collaborative effort spearheaded by several technology vendors in the independent adviser space.  The list of participants is a genuine who’s who of big players in the technology space for CRM, paperless office, and performance reporting.  Here’s a short list of who’s involved:

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Bruckenstein’s Picks for Best of Technology 2008

Posted on December 12, 2008 by in Technology

When you have 2 minutes, go read Joel Bruckenstein’s “The Best of Technology 2008” article at MorningstarAdvisor.

Click here for The Best of Technology 2008.

A tip when you read articles from MorningstarAdvisor: hit “Print” so you don’t have to click on the 1-2-3-4 page links at the bottom.  Get the whole article on one screen with the print preview.  The 4-page split posts are starting to annoy me.

Back to the technology picks.  Bruckenstein’s hardware pick for 2008: a wireless keyboard/mouse combo from Logitech.  He cites a minimum productivity improvement of 5%.

Really?  A keyboard/mouse combo?  Did dual-monitors make the cut, or did the pick have to be something reviewed in 2008?  I think the minimum productivity improvement of an additional monitor starts at 10%.

Changes to RMD Law Passes House

Posted on December 11, 2008 by in Taxes

Update 12/24/08: Want to know the economic impact of the RMD waiver?  Read this post on FPPad.com. 

Late on Wednesday December 10, the House of Representatives passed H.R. 7327, the Worker, Retiree and Employer Recovery Act of 2008.  See the main House.gov press release here.  This bill suspends the 50% excise tax assessed when a taxpayer fails to take minimum required distributions from a retirement account. (See Senate vote update below)

I first wrote about potential changes to the RMD laws in this FPPad post, Are You Ramping Up for Potential RMD Changes? It wasn’t clear if the changes to the RMD requirements were going to apply for the 2008 tax year, so depending on what Congress did, there may have been a potential opportunity to delay distributions if they had not yet been taken.

The bill that passed waives the 50% penalty for tax year 2009.  Therefore, as of today, there’s no reason why an RMD for 2008 should be delayed any longer.  The waiver of the penalty does not apply for tax year 2008.

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