Accounting education

Like a good grape harvest, 2004 was a vintage year for Certified Financial Planners, as the median earnings for CFPs across the country rose 56 percent, to $219,000, according to a survey conducted by the College of Financial Planning.Meanwhile, 54 percent of CFPs reported that their annual income is derived via a combination of fees and commissions, while 29 percent reported that their income was a result of fee-only planning services.The results were part of the College for Financial Planning's "2004 Survey of Trends in Financial Planning." The poll is conducted among holders of the CFP designation who also are members of the Financial Planning Association.But with added income also comes extra work: The majority of survey respondents reported that they drafted an average of 30 financial plans over the past year, compared to an average of 21 financial plans in 2003.

Tax-prep conglomerate H&R Block and the Association of Community Organizations for Reform Now have teamed up in a partnership to help boost awareness of the Earned Income Tax credit and to reduce filing costs for low-income taxpayers. Block and Acorn will canvass some 65 cities in a door-to-door joint education effort aimed at low-income filers who may be eligible for the EITC. The effort will also highlight the costs and speed factors associated with refund options, and also work to hasten the elimination of costly fees connected with refund anticipation loans. Ironically, the Block-Acorn alliance comes exactly one year after Acorn held rallies at Block offices protesting what they perceived were aggressive sales of the company's RALs, which they claim unfairly targeted lower-income taxpayers.

Many of the country's wealthiest individuals have not taken basic steps to protect their assets or mapped out an estate plan, according to a recent survey by wealth management firm PNC Advisors. The poll, which surveyed 792 affluent Americans, including 500 high-net-worth individuals found that 37 percent of those queried with $10 million or more in investable assets do not have a will, health care proxy or trust, and have not named a trustee or administrator for their estate. The PNC poll gauged attitudes about wealth among high-net-worth individuals, including concerns that their children will grow up spoiled, pressure to meet philanthropic obligations, anxiety over appropriate care for older parents, and uncertainty about future financial security. Fewer than half (46 percent) of respondents said that they have become happier as they have accumulated more money. Nearly one third (29 percent) of those respondents with more than $10 million in investable assets agreed that having a lot of money brings more problems than it solves, and 33 percent agreed that having enough money is a constant worry in their life. Half (49 percent) of those polled who have children at home worried that their kids will grow up feeling "entitled," and 44 percent believed that their children are spoiled. Just under one third -- 29 percent -- of respondents encouraged their children to take after-school jobs.

As part of its efforts to promote the Personal Financial Specialist designation, the American Institute of CPAs at its 2005 Personal Financial Planning Conference this week announced a new online financial planning resource targeted at CPA/financial planners and consumers seeking financial planning guidance.

Financial planning and tax prep firm Gilman + Ciocia, based here, has plans to expand in the Northeast, with the opening of three new offices slated for this month.

Practitioners who began adding tax planning services to their basic preparation several years back have found that it's a small step to branch out completely into year-round financial planning.

James Simpson, CPA and owner of Indianapolis-based Financial Technologies & Management, remembers all too well the continuing professional education classes of recent years.

Saving for college has become a cottage industry. There are now over 80 varieties of the Section 529 plan alone. The result is a complex maze of investment options, cost structures, tax benefits and financial aid implications. The federal government's attention to the complexities has some thinking that there might be significant changes on the way.The National Association of Securities Dealers is currently looking into the sales practices of some 20 brokers, questioning whether these brokers are actually presenting the plans that best suit each client's needs.

Hedge funds.Billionaire investor Warren Buffett thinks they're a fad, while fellow billionaire George Soros used them to strike it rich. Hedge funds are controversial, complex and often shrouded in mystery. And while they've long been a secret haven for the ultra-wealthy, mainstream investors are starting to take notice.

It's possible for transfers to a trust to be completed gifts for gift and estate tax purposes, even though that trust may still be treated as a grantor trust for income tax purposes, so that the income of the trust is taxable to the grantor even though retained in the trust or distributed to beneficiaries of the trust.

E&Y SHEDS INVESTMENT BANKING ARM: Big Four firm Ernst & Young has shed its investment banking arm by selling the practice to the consulting firm run by former New York City Mayor Rudolph W. Giuliani.Giuliani Partners LLC bought Ernst & Young Corporate Finance LLC, an affiliate of the Big Four accounting firm, and simultaneously launched Giuliani Capital Advisors LLC, which will advise companies on acquisitions, restructurings and other deals.

H&R Block Inc. announced that Brian L. Nygaard, president and chief executive officer of H&R Block Financial Advisors Inc., has decided to leave the company.

The AARP, the high-profile lobbying group for 36 million Americans over 50, plans to launch a two-week advertising campaign to battle President Bush's proposal to privatize Social Security via the rollout of ownership accounts. The group headquartered here, plans to spend some $5 million on the advertising push to fight the creation of the proposed accounts, which would be funded through payroll taxes. According to reports, the full-page ads are scheduled to appear in roughly 50 newspapers across the country. One of the ads displays a picture of stock traders with the tagline, "Winners and losers are stock market terms. Do you really want them to become retirement terms?" Another shows a couple saying, "If we feel like gambling, we'll play the slots."

The Internal Revenue Service has issued Notice 2005-5 providing guidance on the new automatic (or default) rollover rules for qualified retirement plans. These new rules were added to the Internal Revenue Code as part of the Economic Growth and Tax Relief Reconciliation Act of 2001, but they will not be effective until March 28, 2005, which is the effective date of related final regulations published by the Department of Labor. The guidance answers questions regarding the application of the new requirement and will make it easier for plan sponsors to comply in a timely manner. The new automatic rollover rule requires that mandatory distributions of more than $1,000 from a qualified retirement plan be paid in a direct rollover to an Individual Retirement Account unless the distributee elects to have the amount rolled over to another retirement plan or to receive the distribution directly. EGTRRA also requires that the plan administrator notify the distributee in writing that the distribution may be paid in a direct rollover to an IRA. The guidance responds to comments received by the Department of Labor, Treasury, and the IRS. For example, the guidance clarifies that the automatic rollover requirement applies to governmental and church plans although a transition rule is provided for these plans to comply. The guidance provides that all plans have until the end of 2005 to establish administrative procedures for processing the automatic rollovers and clarifies that rollover IRAs can be set up without the participant's participation. Finally, the guidance includes a sample amendment that plan sponsors can use to amend their plans to comply with the new rule.

Accounting, finance, and banking professionals who hold a professional credential of some type, on average earned 30 percent more than employees in those fields working without a credential, according to a survey by CareerBank.com. Credentialed finance professionals, who comprised roughly half the survey's 2,800 respondents, earned on average $70,096, compared to $53,748 for those without any credential. Of the credentialed respondents participating in the survey, more than 62 percent held the CPA designation. The average annual salary for CPAs participating in the survey increased just over 2 percent from 2003, to $73,295. CPA salaries were not broken down by career longevity, but three-quarters of all respondents had been working in their current position for less than five years. Those in their positions more than five years earned 25 percent more ($75,858 vs. $69,791) than those tenured for under five years. In gender-specific terms, the average 2004 salary for women respondents rose nearly $2,000, to $52,012 while the average salary for men dipped $190 to $69,848. The was the fourth annual salary survey of finance professionals for CareerBank.com, a HR Web site for accounting, finance, and banking posts.

The Internal Revenue Service has released final regs totaling over 230 pages with rules for plans that permit employees to make pre-tax contributions and for plans that have employer matching contributions or employee after-tax contributions. The existing regulations covering these plans were last updated in 1994. Since then, there have been significant statutory changes. The new regs will be fully effective for plan years beginning on or after Jan. 1, 2006, although employers are permitted to use the new rules for any plan year that ends after Dec. 28, 2004. These comprehensive final rules are the result of a long effort of input gathering from retirement plan participants, sponsors, and service providers. Specifically, they address many of the concerns raised by comments submitted in response to the proposed regulations. These final regulations will make it easier for employers to sponsor plans to help employees save for their retirement and will assist administrators in keeping the plans qualified. The final regulations update and simplify many of the current rules for 401(k) plans. In addition, the new regulations strengthen the nondiscrimination rules that ensure benefits for rank-and-file employees. They require certain employer contributions to be spread over a large group of rank-and-file employees before they can boost the ability of high-paid employees to defer income under the plan.

Douglas Hill, managing general partner of embattled brokerage house Edward D. Jones & Co., intends to leave the company roughly one week after the firm agreed to pay $75 million to settle charges of improper disclosure of revenue-sharing payments. Hill, 60, will retire as managing general partner Dec. 31, but would remain as managing partner through 2005. In addition, Hill is expected to pay $3 million of the agreed-upon fine, while the firm's general partners are expected to shoulder an aggregate of $44 million. Last week, the brokerage firm reached a settlement with the SEC, the New York Stock Exchange and the National Association of Securities Dealers as a result of arrangements that Edward Jones entered into with seven fund groups. The firm had not disclosed the fact that it received millions from the fund families each year for selling their respective products.

H&R Block Financial Advisors, the investment arm of the tax prep giant, agreed to pay a $500,000 fine and to return $325,000 in clients' mutual fund trading profits to settle charges brought against it by the National Association of Securities Dealers related to the market-timing of mutual fund shares by two of its former financial advisors.

Section 331 of the American Jobs Creation Act included a provision that could potentially have a big impact on some investors.

A recent merger in wealth management has observers wondering if this time around, the cultures of banking and investment advisors will successfully mesh.