Financial planning

An individual who is planning to retire will often roll over the assets in her qualified plan into a traditional IRA, e.g., so that she will have more control over how the funds are invested.If the plan permits (and only if the plan permits), such an individual may also be able to roll over the assets in a traditional IRA to one of the following types of plans:

Testifying with blunt honesty before the Senate Banking Committee, Fannie Mae's top executives said that it will be years before the mortgage giant can recover from an accounting scandal.Fannie Mae's president and chief executive, Daniel Mudd, alongside chairman Stephen Ashley, testified that the Fannie Mae of today is nearly unrecognizable from before. In mid-June, Mudd volunteered to return some of his salary from the period that the accounting irregularities occured. He served as Fannie Mae's chief operating officer from 2000 through 2004.

The Financial Planning Association has unveiled the FPA Career Center, a tool designed to help those in the market for a new job and those looking to hire new employees.The site has more than 170 financial planning job openings from 139 firms throughout the country. It offers employers targeted access to financial planning professionals, and offers job seekers free and confidential resume posting.

Although many Americans hope to retire as millionaires, many are on a track that falls considerably short, according to a USAA survey conducted by Harris Interactive.According to the results, 51 percent of employed U.S. adults who are not retired say that they want to save $1 million or more for retirement, but 30 percent haven't set aside anything at all. In fact, only 26 percent have saved more than $50,000. To make up for the shortfall, 39 percent have asked their parents for money, while 13 percent have turned to a sibling and 11 percent have approached another family member.

STUDY SAYS FEE-ONLY ADVISORS BOOSTING CLIENT REVENUEFee-only financial advisors are increasing client numbers, revenue and profits at impressive rates, according to a new benchmarking study issued by the National Association of Personal Financial Advisors and produced by CPA and business advisory firm Moss Adams LLP.

Did you know that your clients could be held liable for their employees' missed investment opportunities? Through a number of recent class-action lawsuits over the mismanagement of pension plans, corporate fiduciary responsibility has been brought to center stage.The fallout from these cases has put employers across the nation at risk by exposing their fiduciary responsibility.

If a company's plan permits, pension annuity payments may be provided for a certain period of time - as long as it is not longer than the period under the Uniform Lifetime Table for the participant's age as of his birthday in the same year in which the annuity starting date occurs.The period does not change upon the death of the employee, even if the remaining period certain is longer or shorter than the beneficiary's single life expectancy. The same is true if the annuity also includes a life annuity or a joint and last survivor annuity.

Retirement planning has always been a challenging task, but it is even more so today.The coming generations of retirees face a complicated planning process, because funds need to last far longer than in the past. Medical advances and healthier lifestyles are giving retirees extra decades to enjoy life, but without employment income. Therefore, planning needs to begin much earlier to help ensure a secure and rewarding retirement for our clients.

The Internal Revenue Service has recently been auditing 412(i) defined-benefit pension plans.They are seeking substantial taxes and penalties from what they characterize as "abusive plans," but they do not regard all 412(i) plans as necessarily abusive. A properly structured and administered 412(i) plan can be an invaluable tax reduction tool for a business, but care must be taken.

WACHOVIA BUYS AMERIPRISE RECORD-KEEPING UNIT: Banking group Wachovia Corp. will acquire the defined-contribution record-keeping business of Ameriprise Financial Inc. Terms of the deal, which is subject to federal approval, were not disclosed.The Ameriprise unit provided record-keeping and plan administration services to 225 defined-contribution retirement plans at the end of March - covering nearly 700,000 participants and administering about $28 billion in assets.

Raymond James Financial Inc. announced an initiative that would require the restructuring of variable annuities offered through financial advisors at the firm's broker/dealer subsidiaries, Raymond James Financial Services and Raymond James & Associates.President and chief operating officer Chet Helck said that beginning in August, Raymond James will require all approved annuity providers to offer an alternative pricing structure that reduces client costs without impacting standard or optional benefits. The changes are designed to lower policy fees, create consistent commissions and reduce opportunities for confusion by simplifying offerings.

The Securities and Exchange Commission and the North American Securities Administrators Association have announced a national initiative designed to protect seniors from investment fraud and sales of unsuitable securities.The initiative, which builds on the success of cooperative efforts between the SEC and Florida regulators, in conjunction with the NASD, to crack down on senior investment fraud, will include targeted examinations to detect abusive sales tactics, aggressive enforcement of securities laws in cases of fraud against seniors, and active investor education.

Outside of tax preparation, few facets of accounting are as complicated and change as frequently as retirement and estate planning. Partly that is because of the enormous implications of taxes on these two areas. But it is also due to the changing demands of clients with each new generation of retirees.At this, the outset of the Baby Boomer generation, it is clear that clients are less responsive to complex reports and more interested in simple processes which they can participate in and understand via their own computers or over the Internet. Vendors of retirement and estate planning systems have responded to this need with a host of new collaboration tools and a dramatic improvement in comprehension for both the process and its reports.

A plan participant sometimes wants to provide a survivor annuity for a non-spouse beneficiary who is a child or other close relative of the participant, or a significant other who is not a spouse.Caution: If the participant has a spouse, a survivor annuity for a non-spouse beneficiary can be provided only if the spouse consents.

TRADING FUTURES ON DEBT SECURITIES: The Securities and Exchange Commission and the Commodity Futures Trading Commission have jointly proposed rules that would permit trading of futures on debt indexes in an effort to create a new class of tradable derivatives contracts.Futures contracts on debt indices that are allowed under the proposed rules would trade on futures exchanges subject to regulation by the CFTC. Securities futures on debt securities could be traded on futures exchanges and securities exchanges subject to regulation by the CFTC and the SEC. Under current regulations, trading futures on debt indices is essentially prohibited.

HBK SORCE and PRESQUE ISLE UNVEIL MERGER: CPA and business advisory firm Hill, Barth and King has merged Presque Isle Capital Management into its financial planning unit, HBK Sorce Advisory LLC.Terms were not disclosed.

Exchange-traded funds have been around for over a decade, but their growth in the past few years has attracted even the attention of outside rating services.The ETF channel now numbers over 200 funds with an aggregate $300 billion in assets. The growth in the marketplace gives advisors access to sectors in new ways that help maximize client service.

One wealth management strategy that has gained popularity in past years with many individual retirement account customers involves creating a limited liability company wherein the IRA accountholder is named the manager of the LLC.The accountholder retains control of all the assets held by the LLC. This includes having signature control over all accounts under the LLC on a day-to-day basis. Here's a quick run-down of some important facts.

LEVEY FETED BY AICPA: The American Institute of CPAs named Steven I. Levey, CPA, PFS, the recipient of its 2005 Distinguished Service Award - the highest honor bestowed by the institute's Personal Financial Planning Division.The award is given annually to a CPA who most enhances the overall quality of personal financial planning. Levey, managing director at Denver-based GHP Horwath PC, was recognized for his contributions to the profession, including substantial volunteer efforts for the AICPA, chairing eight conferences, serving on the PFP Executive Committee and the Professional Liability Insurance Plan Committee, and his current post as a commissioner on the National Accreditation Commission.

As an asset class, real estate is growing in importance to professional advisors and their clients. Not only did the asset class provide high returns in the past few years, but managers kept improving the opportunities for investments. Enthusiasm seems to be growing for the class in general, and for new offerings in particular.The run-up in prices over the last few years grabbed headlines. But from the 30 percent average pace of recent times, advisors expect that performance will drop into a more reasonable range, perhaps in the high single digits.