More On Legal & Compliancefrom The Advisor's Professional Library
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
Citing the need to reduce the deficit and restore some balance to the distribution of wealth in the U.S., the speakers asked Congress to act quickly and bring back the tax. The estate tax was progressively reduced and finally eliminated in 2010 through the Bush tax cuts, commonly referred to as EGTRRA, enacted in 2001. Currently the provisions of EGTRRA will reset in 2011 to a $1 million exemption for individuals and a $1.3 million exemption for family-owned businesses, and a 55% tax rate on estates over $1 million, with a 5% surcharge on estates over $10 million.
Despite calls for action in 2009, Congress failed to take any action on the estate tax, although several measures were introduced. Since the change scheduled at the end of 2010 is so drastic, with a restoration to the above-mentioned 2001 levels, it is anticipated that Congress will do something this year - although perhaps not as quickly as UFE asks; the group is calling for Congress to move on the issue before its August recess and to make permanent an estate tax set at 2009 levels "or stronger," with an index for inflation "to avoid coming back in ten years" to fix the issue again.
During the call, numerous aspects of the tax problem were discussed, including the effect the lack of an estate tax had on the incentive for charitable giving - Trumka cited a 23%-40% reduction in charitable giving in the absence of the tax - and the need for some sort of action before the end of 2010, as well as the possibility of making any legislation retroactive to cover estates currently untaxed in 2010.
More than 2,000 high-net-worth individuals have come out in support of the restoration of the estate tax.
Read about Sens. Lincoln and Kyl's recent estate tax proposal from the archives of InvestmentAdvisor.com.