Wealth management

Nine of the 18 insurance firms that provide variable annuities through financial advisors affiliated with Raymond James Financial Inc. will begin offering new, less expensive investment products this week, meeting a deadline set by the financial services firm.

Following the old saw that "What goes up must come down" - and vice versa - advisors who employ a strategy of buying cheap like it when market sectors decline.By the same token, some economic-minded advisors are continually on the lookout for market laggards in the expectation that the next swing might trend upward. Top performers over the recent past are the likely suspects for future price declines, say experts.

COURT TELLS SEC TO LEAVE HEDGE FUNDS ALONE: The U.S. Court of Appeals for the District of Columbia Circuit has dealt a blow to the Securities and Exchange Commission's plans to more closely regulate hedge funds. The court ruled unanimously in late June that the SEC had overstepped its authority in defining hedge fund investors as "clients" of a fund manager, and subsequently ordering any manager with 15 investors or more to register with the agency.SEC Chairman Christopher Cox said that he hasn't yet decided whether or not the decision will be appealed. In a statement, he said that he had already instructed SEC staff to evaluate the court's decision, as well as to provide a set of alternatives for the commission's consideration. "The SEC takes seriously its responsibility to make rules in accordance with our governing laws," Cox said. "The court's finding that, despite the commission's investor protection objective, its rule is arbitrary and in violation of law requires that going forward we re-evaluate the agency's approach to hedge fund activity."

In an effort to increase charitable giving across the U.S., the Fidelity Charitable Gift Fund, an independent public charity within the donor-advised fund program of financial services conglomerate Fidelity, has rolled out the Charitable Investment Advisor Program.Fidelity's new offering allows independent investment advisors to provide discretionary investment management to the Gift Fund for contributions made by the advisors' clients.

An individual who is an active participant in a qualified retirement plan cannot make deductible contributions to a traditional IRA unless her modified adjusted gross income is below certain specified levels.The level depends on the type of income tax return the individual files. For single taxpayers and heads of household, the otherwise allowable deduction is phased out ratably in 2006 and later years, when the taxpayer's MAGI is between $50,000 and $60,000.

Brand-new exchange-traded funds are coming onto the market faster than most advisors can keep up with them.Issuers such as PowerShares and Barclay's Global Investors file for groups of new offerings in the double digits, and the total number has topped 216 funds with aggregate holdings of $334 billion. The flood of new products means advisors' mailboxes are stuffed with offering memoranda. Most end up in the circular file, but a few have made their way into clients' portfolios alongside some of the older issues.

Using cash in a like-kind exchange is similar to passing around the proverbial "hot potato" - you don't want to be the one holding the potato, i.e., the cash, at the end of the transaction. If you do so in a like-kind exchange, you are probably holding "boot" (non-qualifying property), which is taxable to the extent of any gain otherwise locked up in the relinquished property (i.e., the difference between its fair market value and basis).Sometimes, strategies that involve the use of cash to facilitate like-kind exchanges under Code Section 1031 begin to seem like shell games, in which labels matter a great deal. In the end, however, the only labels that have been successfully applied are those that have made sense within the basic framework of Section 1031.

* CCA OFFERS NEW DEFINED-BENEFIT PLAN: CCA Small Business Group LLC, a provider of retirement plans for sole proprietors and small businesses, has unveiled its new OurMax plan, a Web-enabled, high-deferral retirement plan for small business owners.The plan is a type of defined-benefit plan, which allows business owners to save up to $200,000 annually for retirement.

Nobody wants to be the bearer of bad news, but small business owners should be aware that the Internal Revenue Service is stepping up its examinations of companies' retirement plans this year, hoping to catch those that are cheating their workers or the government, or both, as well as to ensure that the plans meet federal regulations.Traditional pensions, 401(k) plans and profit-sharing plans are all on the agenda.

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.

I was raised in a family of medical people: father, brother, son, to name a few. Where other kids in our neighborhood might have had a Cross or a Star of David hanging over their beds, I had a caduceus. Thus, you must immediately ask, why am I writing columns such as this? Well, the answer is relatively simple. To repeat the famous cliche, I really couldn't stand the sight of blood, especially my own.

Late last month, the SEC announced the institution and simultaneous settlement of an enforcement action against Morgan Stanley (Morgan Stanley & Co. Incorporated and Morgan Stanley DW Inc.). The SEC action alleged that Morgan Stanley failed to maintain and enforce adequate written policies and procedures to prevent the misuse of insider information in its possession.

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.

CPA advisors continue to debate what pricing and compensation strategies best fit their culture. Advisory firms seek to find the specific method that charges clients fairly and allows them to pay simply, and in which the firm receives adequate compensation for all its services, combined with the perfect compensation structure to incentivize the best employees. In today's world, advisors speak of improvements, but not perfection.At the core of the issue is the balance between individual performance and success, and that of the overall firm. "Overly rewarding individual performance sometimes encourages hoarding of clients that limits the firm's ability to grow," says Rebecca Pomering, CPA and principal at Moss Adams Consulting Services, in Seattle, who leads the firm's compensation consulting practice. "To achieve a long-term strategy of institutionalizing the client relationship, most firms have to make dramatic changes to their compensation plans."

If you're like most Baby Boomers, you're used to being in control. When situations turn sour, you assess the situation and take action. Laid off from your job? You take the bull by the horns and find another one - or maybe even start your own business. Child's grades dropping? You meet with his teachers and maybe hire a tutor.So it's more than difficult for most Boomers to imagine a day when they may not control their destiny. That day happens when they experience a dramatic decline in health, and they run short of money to pay for the care that they desire.