Wealth management

Donor-advised funds have captured headlines since the millennium changed, often for their meteoric rise in popularity. There was an estimated $5.5 billion in donor-advised funds nationwide in 1995, while the current estimate is nearly $20 billion.These giving vehicles have existed for more than 70 years. Despite their longevity and impressive growth, numerous misperceptions about donor-advised funds persist. These common "myths" underplay the real value that a DAF can have in helping you meet your clients' philanthropic needs.

SEC WON'T APPEAL COURT DECISIONThe Securities and Exchange Commission said that it would ask a court to allow four months for investors and their brokers to respond in light of a court decision affecting an estimated 1 million fee-based brokerage accounts.

A new nationwide research study on family businesses commissioned by Seattle-based Laird Norton Co., a diversified financial concern, shows that overwhelming optimism of the owners of family businesses about their future might prove to be premature because of a lack of strategic vision, succession planning and governance policies.The survey showed that nearly 60 percent of majority shareowners in family businesses are 55 or older, while 30 percent are 65 or older. However, less than 30 percent of those respondents even have succession plans in place, and fewer than 40 percent have a successor lined up.

Here’s something that may be of interest to you.As you know, there are all sorts of lists out there ranging from Accounting Today’s most influential people in accounting to Practical Accountant’s regional survey of accounting firms to CPA Wealth Provider’s financial planning annual awards of excellence.

I have always found regional accounting firms fascinating. Just take three recent developments regarding the regional firm of Virchow, Krause & Company. One was that Wells Fargo Insurance Services of Minnesota, a subsidiary of Wells Fargo & Company, acquired Virchow, Krause & Company's Twin Cities employee benefits operations, including the head of the employee benefits practice in Minneapolis and his team. It is a good example of how regional firms view these very specialized practice areas. The acquire them and spin them off reminding me of many businesses that view the acquisition and the selling of a portion of their business as a regular means for increasing profitability.

Two interesting pieces of information have popped up by two highly reputable sources, one dealing with tips on choosing a financial planner and the other showing survey results of the five most frequent mistakes made when selecting such an advisor.

Broker/dealer H.D. Vest Financial Services said that its assets under management in advisory accounts recently passed the $5 billion mark. The company said that figure helped propel its total assets under management to roughly $25 billion. The company began offering advisory solutions in 1987, and currently supports over 1,900 independent advisory consultants in its system of 5,500 advisors.

Many of my friends are already retired, whether they have money or not. And, I keep hearing all the time the same question: When will I pack it in? After all, I’ve been at this for the past 45 years and you know something, I still love it. I may be one of the few people who on a Sunday night has trouble sleeping because I can’t wait to get to the office Monday morning.

The Internal Revenue Service is expanding an outreach effort to ensure that public schools throughout the United States are complying with the universal availability requirement for retirement annuities they may offer.Some schools and school districts may be overlooking offering employees the opportunity to participate in these retirement plans. To assess the level of compliance, the IRS's Employee Plans Compliance Unit has started sending questionnaires to public school districts in all 50 states under the 403(b) Universal Availability project. A 403(b) plan is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. "Our pilot project in three states showed fairly widespread noncompliance by schools with the universal availability requirement for 403(b) plans," said Joseph Grant, director of the IRS Employee Plans Division. "But we believe most of it was due to a lack of understanding about what the law requires, not a deliberate failure to comply." "We know from our pilot project and from talking to representatives from schools and districts across the country that most of the problems stem from either misunderstanding the law or from confusion because of differing rules in various states," said Grant. "The project will give schools the chance to identify problems with their plans and to correct them on their own."

When it comes to retirement planning, there are a number of different choices. Two of the most commonly used are tax-deferred retirement plans - such as IRAs or 401(k)s - and cash-value life insurance.

TREASURY ISSUES ROTH 401(K) RULES

Do consumers really understand what a fiduciary standards means in the financial services industry? And, perhaps more importantly, do they even care? A new survey from the National Association of Personal Financial Advisors (NAPFA) was unveiled recently at its annual convention in Chicago and it certainly answers those two questions.

Yep, it's that time of the year again! CPA Wealth Provider is calling for nominations for its Fifth 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 fact that there has been no Baby Boomer "bust" has been due in large part to the skill of retirement planners, accountants and their clients.The bust was supposed to occur as Boomers began reaching retirement age without having saved enough to retire. This, coupled with the dismantling of the retirement and pension programs at a host of corporations nationwide, could have created the most poverty-stricken generation of retirees since the Great Depression.

The Certified Financial Planner Board of Standards said that after more than 20 years in Denver, the organization plans to relocate its headquarters to Washington, D.C. CFP Board chair Karen Schaeffer said, "The financial planning profession and the people it serves are being significantly impacted by public policy developments and trends in the financial sector that can best be monitored, influenced and managed from our nation's capital."The board expects to complete the move over the next few months.

Although couples generally agree on which retirement products they own, they often differ on their plans and expectations for retirement, according to research conducted by Fidelity Investments.Fidelity polled couples born between 1937 and 1964. When asked which income sources they would rely on most in retirement, most couples agreed that workplace savings plans, pensions and Social Security would top the list, but only 39 percent agreed upon which potential sources would be their primary source of income.

Bankrate, which is a leading Internet consumer banking marketplace, has released an interview with Christopher Cox, chairman of the SEC that was conducted as part of Bankrate.com’s Financial Literacy Program. Bankrate does a real service to the community with this interview and I commend them because it helps to put into focus what is actually going on with seniors and also how they can be protected from scams. Moreover, it comes from the person who should know, and does.Cox has first hand knowledge of what’s involved and he relates a tale about his own parents. “Before my mother died a few years ago, she was pestered by a seemingly endless barrage of annuity schemes and unsuitable mortgage offers. Despite the fact that she was suffering from throat cancer and could barely speak, she received unsolicited sales pitches over the phone and even in person. Even though my father was suffering from Alzheimer’s disease, the brokers would prey upon him, as well.”

Although the recent Council Meeting was run procedurally exactly as many Council meetings I have attended, I did notice some very importanct differences.

I get many e-mails from readers asking whether I have a financial planner and if so, who? I get some e-mails even from financial planners simply looking for business.So, the answer is yes, I do have a financial planner because I don’t believe in doing it myself--sort of akin to the lawyer who represents himself has a fool for a client or the neurosurgeon who decides to operate on herself. Nope, I may know a lot but I still don’t know what a tried and tested financial planner knows.

Financial services provider the Bisys Group will pay $25 million in restitution to settle federal charges that it violated financial reporting rules to artificially inflate earnings by $180 million over three years.