More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
Far from some theoretical ruling that “paves the way” for better opportunities for same sex couples and financial planning advice, the Supreme Court’s decision on the Defense of Marriage Act had Hart Patterson Financial Services immediately calling clients. The firm services 230 families, of which about 35% are same-sex households.
“We’ve been waiting years for this,” said Vikki Lenhart (right), a financial planner with the Amherst, Mass.-based practice. “All of the issues we’ve been talking about with our heterosexual couples we can now discuss with our same-sex clients."
Even though the firm is going “case by case” with each client and couple’s situation, they’re zeroing in on military benefits, Social Security and tax returns.
“We called the Social Security administration and they told us to begin sending in applications for spousal benefits,” Lenhart noted.
She pointed to one couple that had to defer taking their individual benefits until age 70.
“One partner is 67 and the other is 69. We told them another strategy is now on the table—spousal benefits, which they can collect for $14,000 per year.”
Although Penny Manners, Hart Patterson’s tax specialist, is still examining the ruling as it applies to the IRS and joint filers, she’s already refiled in one couple’s case, netting them an extra $3,300.
Yet while financial planning for same-sex couples living in a state that recognizes their marriage just got easier with the Supreme Court’s decision, advisors and attorneys say a lot of same-sex planning issues remain unresolved.
The benefit of the Supreme Court striking down DOMA “is still pretty narrow,” said Anna Pfaehler, a CFP and advisor at Palisades Hudson Financial Group in Scarsdale, N.Y.
While the high court’s striking down of DOMA gives same-sex couples who marry the same federal benefits as straight couples, the ruling also preserved individual state laws on the issue, Pfaehler notes.
Nevertheless, Hart Patterson is forging ahead. As to future marketing strategies and business development opportunities, the Cambridge Investment Research-affiliated firm hasn’t been able to think that far ahead.
“We’ve been calling our current clients and haven’t really had a moment to breathe,” Lenhart concluded, noting she’ll be taking some well-deserved vacation time for July 4.
Check out High Court Bolsters Gay Marriage, but Financial Planning Hurdles Remain on AdvisorOne.