Financial reporting

More than 110 female financial advisors and 200 guests gathered recently for the 13th Annual Women’s Symposium in St. Petersburg. Florida, hosted by the Raymond James Network for Women Advisors. It was a three-day event that covered business building sessions and networking activities. There was a wide array of speakers and breakout sessions provided guests with economic outlook updates and useful information on practice management and professional development. There was even a technology lab set up for on-site training that offered hands-on demonstrations of various tools such as the new Client Relationship Manager, the Financial Planning Suite, and the Advisor’s Resource Console. In addition, home office departments conducted showcases with presenters attending from the Planning Corporation of America, Alternative Investments Group, Marketing, The Trust Companies, Raymond James Bank, Asset Management Services, Investment Banking, and Wealth Solutions. The Raymond James Network for Women Advisors was established in 1994 with the goal of providing advisors with educational and networking opportunities to help grow their practices. The Network aims to assist female financial advisors in leveraging their talents to create successful and fulfilling careers. Through a collection of activities and resources, it strives to help women advisors expand their knowledge, expertise, and businesses in a supportive, collaborative environment. The Network also offers an annual gathering of its top recognition club women advisors. This event allows these senior level women to discuss specific issues they commonly face in their practices such as succession planning, team development, as well as unique estate planning strategies for high-net-worth clients. A key component of The Network is the Women’s Advisory Council. This group of 12 female financial advisors, with varying levels of experience and a range of practice types, provides guidance and assistance to Raymond James’ women advisors. Along with developing strategies for supporting women, the group also serves as a resource to branch and senior management as the firm looks to attract quality female financial advisors. The Council is also responsible for shaping the agenda of the Symposium, from identifying timely topics to leading or facilitating many of the event’s breakout sessions. Karen Schultz, vice president, and director for the Network, says that council members are integrally involved in mentoring activities, from leading monthly conference calls for trainees to providing advice, support, and guidance to experienced advisors. The Network also provides business development support to its women advisors, including offering consulting services to advisors who are considering local sponsorship opportunities, assisting in the creation of materials to promote the event, and, in some instances, providing financial support. Moreover, Schultz points out that the Women's Resource Centerwas created specifically for women advisors and contains links to useful marketing materials and strategies, tips, and best practices for growing a business, an "ask the experts" page, links to Websites containing key information and statistics on women, articles of interest, and a calendar of events.

Financial Accounting Standards Board Chairman Robert Herz envisions a day when FASB will become part of the International Accounting Standards Board, but there are some hurdles to overcome first.

The Financial Accounting Standards Board has issued two statements as it continues on the road to international convergence: on business combinations and on noncontrolling interests in consolidated financial statements.

As the subprime mortgage meltdown grows, some experts are starting to see the resulting fallout rivaling corporate scandals of earlier this decade, like Enron, that prompted the passage of the Sarbanes-Oxley Act.

Tax prep firm Gilman Ciocia has acquired Madison CPA, a Fort Lauderdale accounting firm.

The Financial Accounting Standards Board has released its preliminary views on financial instruments with the characteristics of equity in an effort to simplify a patchwork of 60-plus pieces of guidance.

The U.S. Supreme Court heard arguments in a case involving the ability of trusts to deduct fees for investment advice.

Something out of the Stanford Graduate School of Business (courtesy of Marguerite Rigoglioso) tickled my interest when she said that two Stanford researchers claimed that what investors fear the most is not the risk of a loss but rather the risk that they may do poorly relative to their peers. This especially comes to the surface in light of the current economic plight and sub-prime mortgage debacle. Apparently, these Stanford researchers, Peter DeMarzo and Ilan Kremer, said that individual investors care deeply about how their level of wealth compares with others in their peer group and community. “Investors fear being poor when everyone around them is rich,” pointed out DeMarzo, the Mizuho Financial Group Professor of Finance at Stanford’s Graduate School of Business. Kremer, who is Associate Professor of Finance, added, “It’s worse to have a lower income in an area where everyone is wealthy than it is in an area where everyone has a similar income as you.” They explained that this concern centers around the fact that the cost of living in any community may very well depend on the wealth of its residents. In other words, the more money people have, the more expensive will be their homes, not to mention all sorts of amenities. Using economic models, the researchers noted that external concerns have great consequences on the manner in which people invest. I don’t find this unusual as people oft-times decide on portfolios based upon what others have. It’s kind of a “herd” mentality with the built-in fear that others will rake in the gold while you will not. DeMarzo and Kremer said that they found a traditional economic assumption whereby people are driven by the straightforward desire to maximize their wealth as simplistic but that as soon as actual consumption decisions are considered, peer pressure comes into play. “We might classify behavior based on relative wealth as ‘irrational,’ but in choosing similar, risky portfolios, investors are actually doing what makes sense to them,” emphasized Kremer. They also discovered that investors tend to congregate around high-tech investments (fiber optics, internet-related infrastructure) that have the potential to return big. “These are typically high-risk stocks that, in seven out of eight cases, are likely to go bust. But people are willing to invest in them in the hopes that they’ll hit that one-in-eight jackpot,” added DeMarzo. According to DeMarzo and Kremer, when people begin gravitating to specific investments, the price of the assets they hold may become over-inflated. However, they do find that even if people know a stock is overpriced, their fear of doing something different from their peers and potentially losing out makes them move in ever greater numbers to the swelling investment. For individuals, herding can also provide a kind of buffer when the bubble bursts. “If everyone loses his or her money together, it’s perceived as not as bad as if just you alone lose,” said DeMarzo. Thus the “keeping up with the Joneses” school of investing has benefits on the upside as well as the downside. I don’t know. I tend to march to my own drummer. It seems to work better than worrying about what others are or are not doing.

AccountantsWorld has teamed up with ExpertPlan to help accountants provide retirement-planning services to clients.

WebCPA presents a free online session discussing various facets of philanthropy and its potential benefits for accountants.

As college costs increase with no end in sight, more and more of your clients are struggling to find ways to lighten the tuition load. Luckily, there exist several beneficial tax deductions, credits and scholarships that can help.ABOVE-THE-LINE DEDUCTIONS

While the word is that defined-benefit plans are no longer in favor, they can still provide a tax savings for the right client.“A lot of the press would lead you to believe that defined-benefit plans are on the way out,” said Karen Shapiro, chief executive of Dedicated DB, a San Mateo, Calif.-based provider of such plans. “But for some small-business owners, it’s a terrific tax strategy.”

One of accounting’s most complex and significant projects — the codification of the country’s generally accepted accounting principles — is about to step into daylight.After four years of intense and technically complex labor, the Financial Accounting Standards Board is about to release the massive compilation of standards, statements, issues, interpretations, bulletins, positions, guides, abstracts and opinions.

The Governmental Accounting Standards Board has issued a statement that requires government endowments to report their land and other real estate investments at fair value.

The Internal Revenue Service has issued a sample notice that 401(k) and 414(w) plan sponsors can use to tell plan participants about their rights and obligations under the Pension Protection Act’s eligible automatic contribution arrangements and qualified automatic contribution arrangements.

The difference between a rhetorical question and a survey question is someone answers. Before we find out what type of question my title is, here’s why I posed it. Firms find about how other firms operate in a number of ways. It might be from contact with partners in other firms; via membership in groups, organizations, or societies; by hiring consultants; or possibly by reading about other firms in professional publications.

The International Accounting Standards Board has decided to postpone the effective date of its new accounting standard for business combinations until July 1, 2009.

WebCPA presents a free online session discussing various facets of philanthropy and its potential benefits for accountants.

I just received the results of a new survey that was conducted by market research provider Vizu Corporation on behalf of RetireeWorkforce.com (courtesy of my friend, Nazli Ekim of SS/PR) in which it is noted that more than three-quarters of people working today say they plan to continue being employed into their retirement years. In fact, almost 40 percent of all respondents report that they anticipate doing so for monetary reasons, either to meet daily needs or to boost their quality of life. These are not surprising results given what’s been happening with the economy today and especially the housing world. Actually, to break this down even more, 34.1 percent of those surveyed claim they will work to “make ends meet,” while another 14.7 percent note they seek employment to “earn extra income to boost their quality of life.” Interestingly enough, 22 percent say that their motivation for working would be “the mental stimulation and challenge” while a scant 4.7 percent explain that it would be for “personal and human interaction.” I always thought that last one was the primary reason. Apparently not…at least, not according to this survey. Joe Salice, the president and CEO of RetireeWorkforce.com, points out that attitudes about work are definitely changing. “People are perceiving work as much more of a lifelong endeavor, rather than simply a lengthy phase.”

The Securities and Exchange Commission has voted to remove the requirement for non-U.S. companies to reconcile their financial statements to U.S. generally accepted accounting principles.