More On Tax Planningfrom The Advisor's Professional Library
- Annuities: Estate Tax The value of certain types of annuities may be included in an estate’s value. Understanding the intricacies of these inclusions is a critically important aspect of estate planning.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
September brings the 21st annual Broker-Dealers of the Year awards. This year’s winners (or their firms) aren’t new to the process, with three of the four capturing top honors over multiple years. The only newbie to the group confidently predicted we’d soon see him again. Check out the cover story to get the winners’ takes on succession planning, recruiting, regulation, product and strategy, and plenty more or see how they were chosen to represent the 2011 Broker-Dealers of the Year.
On a darker note, next month will also mark the 10th anniversary of the attacks on the World Trade Center. Our broker-dealers had something to say on that subject too. Patrick McEvoy of Woodbury Financial called it an “affront on capitalism,” and Brad Shepherd, president of Founders Financial, named it the “single most important geo-political event” in his lifetime.
“Notwithstanding the tragedy that occurred, what you saw was a nation and a city come together,” Tim Murphy, Investment Capital Corp., said.
The day after our roundtable discussion with the 2011 Broker-Dealers of the Year, Standard & Poor’s downgraded U.S. government debt in a historic move that left an already weakened economy reeling. Not that the heads of these venerable firms were somehow unprepared, but nonetheless it should be noted for posterity’s sake; a “sign of the times.”
It was one more thing to add to the long list of what these broker-dealers (and by extension advisors, the financial services industry and the country as a whole) are dealing with. The struggling (scratch; flailing) economy, Dodd-Frank, fee compression, increased competition, baby boomers at age 65, succession planning issues—and on it goes.
So why were they so relaxed?
The interview was punctuated with laughter, good humor and mild ribbing. Being named one of this year’s winners was no doubt a factor, but the real reason was revealed soon after the start of the discussion. For them, it’s all opportunity. Not that anyone took glee in, or made light of, the nation’s travails, but the excitement over their ability to help—to “do their part”—was palpable.
Recovery continues for financial advisory firms. Driven predominantly by sustained appreciation in security markets, virtually all performance indicators for advisory firms trended upward in 2010.
With the 2011 FA Insight Study of Advisory Firms: People and Pay, Eliza de Pardo and Dan Inveen of FA Insight endeavor to support advisory firms in confronting these challenges. People and Pay is the second study with a special focus on human capital. A primary intention of the 2011 People and Pay study is to assist firms to not only attract and retain the right individuals, but to map a path that progresses people toward ownership and management responsibility.
Read “Endangered Supply.”
Everyone understands, at least in theory, the value of written procedures and processes in an office. Clear procedures streamline workflow and build organizational teamwork. They also promote consistency during employee absences or turnover. Ultimately, they enhance a firm’s bottom line. Today, as more solo practices become multiple-advisor firms, the need for consistent procedures is stronger than ever. Joni Youngwirth describes how the humble checklist can be a powerful tool to identify processes and complete them efficiently and consistently, and ultimately grow your firm.
Read “Unchecked Growth.”
In the final installment of Investment Advisor’s Grow Your Firm series, Susan Hirshman explains how to get the right clients; beginning with how to determine who the right client is.
The truth here is that there is much more to defining a “right client” than the size of his or her net worth. In fact, it starts with you recognizing and identifying your own communication style and personality traits to find clients who will not only help you satisfy your goals for your practice, but who you will enjoy working with. After all, you intend to work with these people for many years, right?
Read “Getting the Right Clients.”
The debt crisis in Europe—not to mention the one here—has many investors running scared. But, writes Savita Iyer-Ahrestani, conventional market wisdom dictates that investors who stick their necks out at a time of great crisis reap great rewards. As such, there are opportunities to be had in Europe if you know where to look—and if your clients have the stomach for it.
Read “North Stars.”
Diversification isn’t just for client portfolios, Eric Cott, director of advisor education for The Options Industry Council, writes. New research shows wealth managers are embracing options to enhance and supplement their clients’ portfolios, as nearly half of all advisors have used options for at least one of their clients in the past year. A survey sponsored by the OIC found advisors’ use of options demonstrates more widespread use by wealth managers across all channels. Financial advisors who use options tend to have larger books of business and are more experienced than those who do not use options.
Read “Options for Growth.”
Tax exemptions set to expire in 2012 offer plenty of short-term opportunities for clients’ wealth transfer needs regardless of their level of wealth. Those who act now by establishing new trusts, giving substantial gifts or revisiting life insurance policies will be able to transfer considerable wealth without being significantly taxed.
Since the exemption is only valid until 2013, acting quickly and efficiently is necessary to completely take advantage of the Tax Act. It’s imperative for individuals to examine new retirement planning, wealth management and transfer opportunities that have been made available.
Darin Gibson, owner and president of Burnham Gibson Financial Group, explains how you can help your clients take advantage of exemptions in the Tax Relief Act of 2010 without bringing the IRS down on them.
Read “The Exemption to the Rule.”
By studying what made da Vinci and Edison great, advisors can teach themselves to be more creative and innovative. Olivia Mellan talks to author and speaker Michael Gelb to learn what advisors can learn from those two great thinkers and apply to their own practices.