Professional development

Deloitte Financial Advisory Services has elected a new CEO and U.S. chairman.

A certain advisor had a 35-year relationship with his client/friend. He helped him with businesses, financial plans, estate plans, and the like. When the client died, and then subsequently his wife, the family advisor was called to the home by the daughter to discuss the next steps regarding the estate. He asked the daughter what she wanted to do with the vast collection of art and antiques. The daughter, who had just lost both parents and was herself in the middle of a divorce, said she trusted the advisor and ended with “Can you handle this?” The advisor called a local auction house and was pleased to see the auction results yielded more than $500,000, with one piece of furniture in particular selling for $68,000. When he reported this to the daughter, she said, “That was Mom’s favorite piece.” Well, eight months later the daughter’s aunt called the advisor to say that the piece of furniture that sold for $68,000 was subsequently sold in a New York auction for $725,000. Does the advisor see a lawyer calling him? This story is related by Michael Mendelsohn who a few months ago launched The Briddge Group to meet the growing demand for art succession planning advocates. He created it in partnership with some of the nation’s foremost art, legal, and financial experts. Mendelsohn says that “Collectors and their advisors need an advocate who knows how to lift art and collectibles out of the estate planning process and treat them with the special handling every collection deserves.” He also listed the top 10 art succession planning mistakes made by financial and legal advisors: 1. Failure to understand the effect a large art inheritance will have on your clients’ children and future generations. 2. Assuming that if a piece is “undeclared” and passed quietly to an heir (the empty hook approach), it can avoid taxation—that approach can actually cause serious tax problems. 3. Failure to understand the difference between clients who accumulate common objects and clients who are collectors. 4. Neglecting to collect proper documentation, including cost basis, proper title, provenance, and current opinion of valuation for each piece in a collection. 5. Failure to take advantage of current tax laws which allow a collector to reduce current income tax, eliminate capital gains, and estate taxation on art assets. 6. Failure to leverage/arbitrage your clients’ art holdings for the benefit of their favorite charities. 7. Failure to develop a plan to protect art assets from creditors’ claims. 8. Failure to understand the art headlines in the press—those big auctions often mean panic selling, a huge reduction in value, and/or a lost legacy. 9. Confusing estate planning with art succession planning. There are different rules and different opportunities for art assets. 10. Failure to use a team approach when planning for their clients’ art assets—collectors and their advisors need specialized advocates. For more information, contact Annette@briddgegroup.com

Two-thirds of certified financial planners have seen an increase in potential clients as economic turbulence has increased in the past several weeks, according to a new survey.

Proxy research and advisory concern Glass Lewis & Co. said it would expand its partnership with IW Financial, a provider of environmental, social, and governance research, to include a broader range of research offerings, including global security risk/terrorism and custom research.

The American Institute of CPAs is mulling the idea of internationalizing the CPA designation.

Federal Reserve Chairman Ben Bernanke has given new life to calls for an economic stimulus package, but exactly what it will be is anybody's guess.

Barry Melancon, president and chief executive of the American Institute of CPAs, opened his annual remarks regarding the state of the profession at the Fall Meeting of Council and Members by addressing the current economic crisis and the controversy around fair value accounting.

If there were any doubt about Americans' urgent need for basic financial enlightenment, the economic meltdown that has been taking its heavy toll on Wall Street and Main Street of late should lay it to rest.But today's rocky environment was probably far from the imagination of the legions of CPAs who responded to the American Institute of CPAs' call in 2003, asking if they'd be willing to participate in a sweeping effort to raise Americans' financial literacy quotient.

The Census Bureau estimates that there are nearly 78 million Baby Boomers, many of whom are facing retirement in the next few years with little or no savings.These 40-, 50- and even 60-year-old late-starters have been too busy educating children, caring for parents and making ends meet to properly save for their own retirement. By taking the time to understand their personal needs and goals, and staying on top of changes in relevant plans and laws, advisors can give clients one more reason to rely on them and their financial guidance.

AMERIPRISE TO ADD 900 BLOCKERS

Two recent reports suggest that the movement to register tax return preparers will continue.

“Every day, we receive phone calls or e-mails that begin, ‘I just inherited (or acquired) a coin collection. What do I do?’ Unfortunately, all of us in the rare coin business have heard horror stories over the years about widows who sold their late husband’s collections at a fraction of the true value because they didn't have enough information. We've set up this new service so heirs can quickly get accurate information and find reputable dealers,” says Ron Guth, President of Professional Coin Grading Service (PCGS), one of the world’s largest, third-party rare coin authentication companies.

The Internal Revenue Service announced cost-of-living adjustments on the dollar limitations for pension plans and other items in tax year 2009, even as Social Security benefits are expected to rise next year.

The federal government plans to spend $250 billion to buy equity stakes in troubled banks to help them weather the credit crisis.

Presidential candidate Sen. John McCain, R-Ariz., and his rival Sen. Barack Obama, D-Ill., have proposed differing tax and retirement plan measures to deal with the economic downturn.

As more clients are confronted with shrinking retirement portfolios, layoffs and hardship getting bank loans for their business and personal needs, accountants are being asked for advice on how to survive through lean times.

For taxpayers that converted a traditional IRA to a Roth IRA in 2007, October 15 is the last chance they have for redemption, according to Mike Martin of Mike Martin and Associates.

To assist companies in dealing with the plunging markets and subsequent fallout, Protiviti, a provider of internal audit and risk advisory services, has assembled a Financial Crisis Team.

Closing date is fast-approaching. CPA Wealth Provider is calling for nominations for its Sixth Annual Financial Planning Awards in any of the following categories: CPA/Financial Planning Firms, Broker/Dealers, and Financial Planning Software Vendors. Winners are those firms or companies that have taken the lead through innovation, efficiency, initiative, or growth in the financial planning area. The winners will be profiled in the January 2009 issue of CPA Wealth Provider and copies of the issue will be included with the January issues of Accounting Today, Accounting Technology, and Practical Accountant, as well as being featured on WebCPA.com and at applicable conferences and conventions. No forms are needed to nominate. Simply send information about what company or firm is being nominated and in what category. Explain briefly how this firm or company has taken the lead through innovation, efficiency, initiative, or growth in the financial planning area. You can even nominate yourself. An example can be used. For instance, one company, a winner in the first year, showed that its seven financial planners all hold specific certifications or licenses and that this comprehensive planning approach has earned the firm an impressive customer loyalty with 99 percent of clients who sign remaining with the firm on a permanent basis. The judges this year are Bill Carlino, editor-in-chief of Accounting Today, Howard Wolosky, editor-in-chief of Practical Accountant, and myself. Nominations must be received by November 7, 2008. Send nominations by e-mail, regular mail, or fax to: Stuart Kahan, Executive Editor

Sen. Hillary Rodham Clinton, D-N.Y., has proposed a $150 billion Emergency Stabilization Fund to help small businesses, universities, students and municipalities cope with the credit crisis, with the money coming from the $700 billion financial bailout package.