Financial Planning

Practitioners who have been adding tax planning services to their basic preparation are taking an additional step to extend their practice into year-round financial planning."There's a natural progression from tax preparation into financial planning," said Stephen Parezo, media manager at Fiducial.

Planning for college expenses is becoming a central focus for families as the costs of higher education continue to skyrocket.Exorbitant price tags that may approach $50,000 per year are making headlines, as parents and their financial advisors look for solutions that don't delay retirement or limit a student's future. Advisors subsequently have devised a combination of savings plans, tax strategies and admissions planning to minimize the impact of pricey college expenses on families' financial plans.

AMERIPRISE TO SETTLE TRADING CHARGES: Ameriprise Financial - the entity spun off by former parent American Express - and its broker/dealer arm agreed to pay $57.3 million to settle charges of illegal trading and brokerage misconduct.The Securities and Exchange Commission charged that Minneapolis-based Ameriprise Financial Services - the company's broker/dealer - failed to "adequately" disclose millions in revenue-sharing payments that it received from a group of mutual fund companies dating back to 2001.

Mutual fund portfolio managers used to be as inaccessible as the Wizard of Oz.Fund companies for the most part hid their ideas and activities behind a wall of wholesalers and scripted messages on brochures. When Morningstar began trying to contact portfolio managers in the late 1980s, their analysts often were greeted with phone hang-ups.

ISO 22222, the Standard on Personal Financial Planning, has been approved as an international standard. All ISO members (standardization institutes in approximately 150 countries around the world) can now adopt ISO 22222 as a national standard.According to Stuart Kessler, chairman of the International Standards Organization's blue-ribbon committee on personal financial planning, "ISO 22222 is by nature not legally binding, but a document of 'good practice' that can be applied voluntarily, unless there is a reference to it in legislation or it is part of a contract, in which case it might become binding."

Commerce Bancorp Inc., parent to some 375 Commerce Bank branches in the New York, Philadelphia and Southeast Florida markets, has acquired online wealth manager eMoney Advisor for $32 million.

GLOBAL BENCHMARK EN ROUTE FOR FINANCIAL PLANNERS: The upcoming International Standards Organization's 2222 standard is now in a final ballot, with the objective of achieving and promoting a globally accepted benchmark for individuals who provide the professional service of personal financial planning. This would be the first truly non-technical service standard for financial services.According to Stuart Kessler, managing director of RSM McGladrey Inc. and the chair of the ISO's blue ribbon committee on financing planning, "ISO 2222 will specify the ethical behaviors, competences and experience required of a professional personal financial planner. It describes and addresses the various methods of conformity assessment and specifies requirements applying to each of them."

Roth 401(k) accounts will - with the blessing of the Internal Revenue Service - make their debut effective Jan. 1, 2006.Unlike the 401(k), which is funded with pretax dollars, the Roth 401(k) is funded with after-tax dollars from the employee. Any employer match would remain taxable.

Financial planning is usually not a static process. When your clients ask you for advice in investing their resources, one of the more difficult tasks is getting them to make decisions on not only what their ultimate investing goals are (besides becoming wealthy or wealthier), but just how much risk they want to take along the way.As a client's economic and life conditions change, often their goals do as well. Many successful planning professionals find that periodic re-analysis of each client's holdings is a good idea. By examining how well a client's investment portfolio is performing and what progress is being made towards meeting a client's ultimate and near-term goals, you are best serving your clients, and very possibly generating additional fees for your practice.

A vast majority of American investors are lacking the "investor survival skills" needed to build their savings into a retirement nest egg, according to the Securities Investor Protection Corporation /Investor Protection Trust survey conducted by Opinion Research Corp.