Financial Planning

AMEX TO SPIN OFF FINANCIAL ADVISORS BUSINESS: American Express Co. said that it will spin off its American Express Financial Advisors unit to shareholders to focus on its credit card, charge card and travel services businesses.Shareholders would receive 100 percent of the common shares of the company, which would be renamed American Express Financial Corp. AmEx said that it expects to complete the transaction in the third quarter.

Framingham, Mass. - A survey of 220 businesses revealed that while compliance costs associated with Sarbanes-Oxley Sections 404 and 302 are front-loaded, once companies are through the process, there is a great deal of proportional value.The poll, conducted jointly by International Data Corp. and RevenueRecognition.com, also noted that a compliance "chasm" exists and that companies that have crossed it have achieved more effective results at less cost.

No matter what else may happen in 2005, the markets for personal financial planning are set to explode. It's not just the Bush administration's announced plans to overhaul both Social Security and the income tax systems. Nor is it just that an economic upswing and low interest rates are pushing the stock markets back up to pre-2000 levels.There are certain fundamental changes taking place in the software industry, and in the markets for financial planning software in particular. Three trends are notable at the beginning of this year: * The software is going online. In addition to traditional application software provider eMoneyAdvisor, MoneyTree and EISI have both moved strongly into Web-based services. Other software vendors must carefully weave between the obvious advantages of an online service and the wishes of subscribers, who may not want to move so quickly onto the Internet. But the trend has an air of inevitability about it.

The constant headlines of regulators' actions against broker/dealers recall the image of falling dominoes.

AARP, the high-profile lobbying group for the roughly 36 million Americans over 50, has come out swinging in the fight over Social Security reform with the release of a poll showing a lack of support for President Bush's plan to allow investors to divert some of their Social Security taxes into private accounts.

Some of your clients may not yet have made their contributions to traditional or Roth IRAs for 2004, but plan to make them before filing their 2004 income tax returns. Others may be planning to contribute the maximum amount possible to their IRAs for 2005 as soon as possible.

FPA AWARDED FOUNDATION GRANT: The Financial Planning Association has received a $252,468 grant from the Foundation for Financial Planning - the largest grant ever given by the foundation.

A startling 90 percent of Americans are worried about their retirement savings, even prior to President Bush unveiling his sweeping second-term agenda, which includes a series of reform measures topped by revamping the Social Security system. Some 57 percent of consumers participating in a survey by banking and financial services conglomerate Wachovia Corp. said that they often worried or sometimes felt worried about how well they will be prepared for retirement, while 32 percent said that retirement savings was an occasional worry. Wachovia's survey -- conducted prior to the election -- included 2,100 consumers with household income or investments exceeding $75,000. It was conducted last fall, before Bush won re-election. 36 percent admitted that they weren't saving enough for retirement, while another 11 percent were worried but were confident that they were pursuing the right course of action. Just 16 percent of the survey participants expressed confidence that they would receive Social Security benefits when they retired. And 50 percent were skeptical of the president's plan for private accounts, saying it was too risky for their retirement savings.

The American Institute of CPAs has joined with the Labor Department's Women's Bureau in an initiative to help educate women about personal financial management. The partnership will combine the financial education efforts of both organizations -- the AICPA's 360 Degrees of Financial Literacy, and the Women's Bureau's Wi$e Up. The joint effort would provide Labor's Wi$e Up program with the institute's financial experts to support its on-line program and teleconference calls, as well as financial education workshops and conferences. The AICPA's 360 Degrees of Financial Literacy was launched last year with the support of state CPA societies. The program encourages CPAs to volunteer to help educate the public on various financial topics.

George W. Bush's presidency will be remembered for many things - and if the president has his way, one of those things will be an overhaul of the venerable Social Security system.