Financial Planning

MOST TAX PROFESSIONALS ENTER PFP ARENA VIA BROKER/DEALER: The majority of tax professionals who enter the financial planning business do so by hooking up with an independent broker/dealer firm, according to a report by market research and consulting firm Tiburon Strategic Advisors.

Like a good grape harvest, 2004 was a vintage year for Certified Financial Planners, as the median earnings for CFPs across the country rose 56 percent, to $219,000, according to a survey conducted by the College of Financial Planning.Meanwhile, 54 percent of CFPs reported that their annual income is derived via a combination of fees and commissions, while 29 percent reported that their income was a result of fee-only planning services.The results were part of the College for Financial Planning's "2004 Survey of Trends in Financial Planning." The poll is conducted among holders of the CFP designation who also are members of the Financial Planning Association.But with added income also comes extra work: The majority of survey respondents reported that they drafted an average of 30 financial plans over the past year, compared to an average of 21 financial plans in 2003.

Many of the country's wealthiest individuals have not taken basic steps to protect their assets or mapped out an estate plan, according to a recent survey by wealth management firm PNC Advisors. The poll, which surveyed 792 affluent Americans, including 500 high-net-worth individuals found that 37 percent of those queried with $10 million or more in investable assets do not have a will, health care proxy or trust, and have not named a trustee or administrator for their estate. The PNC poll gauged attitudes about wealth among high-net-worth individuals, including concerns that their children will grow up spoiled, pressure to meet philanthropic obligations, anxiety over appropriate care for older parents, and uncertainty about future financial security. Fewer than half (46 percent) of respondents said that they have become happier as they have accumulated more money. Nearly one third (29 percent) of those respondents with more than $10 million in investable assets agreed that having a lot of money brings more problems than it solves, and 33 percent agreed that having enough money is a constant worry in their life. Half (49 percent) of those polled who have children at home worried that their kids will grow up feeling "entitled," and 44 percent believed that their children are spoiled. Just under one third -- 29 percent -- of respondents encouraged their children to take after-school jobs.

As part of its efforts to promote the Personal Financial Specialist designation, the American Institute of CPAs at its 2005 Personal Financial Planning Conference this week announced a new online financial planning resource targeted at CPA/financial planners and consumers seeking financial planning guidance.

Financial planning and tax prep firm Gilman + Ciocia, based here, has plans to expand in the Northeast, with the opening of three new offices slated for this month.

Practitioners who began adding tax planning services to their basic preparation several years back have found that it's a small step to branch out completely into year-round financial planning.

Saving for college has become a cottage industry. There are now over 80 varieties of the Section 529 plan alone. The result is a complex maze of investment options, cost structures, tax benefits and financial aid implications. The federal government's attention to the complexities has some thinking that there might be significant changes on the way.The National Association of Securities Dealers is currently looking into the sales practices of some 20 brokers, questioning whether these brokers are actually presenting the plans that best suit each client's needs.

Hedge funds.Billionaire investor Warren Buffett thinks they're a fad, while fellow billionaire George Soros used them to strike it rich. Hedge funds are controversial, complex and often shrouded in mystery. And while they've long been a secret haven for the ultra-wealthy, mainstream investors are starting to take notice.

It's possible for transfers to a trust to be completed gifts for gift and estate tax purposes, even though that trust may still be treated as a grantor trust for income tax purposes, so that the income of the trust is taxable to the grantor even though retained in the trust or distributed to beneficiaries of the trust.

E&Y SHEDS INVESTMENT BANKING ARM: Big Four firm Ernst & Young has shed its investment banking arm by selling the practice to the consulting firm run by former New York City Mayor Rudolph W. Giuliani.Giuliani Partners LLC bought Ernst & Young Corporate Finance LLC, an affiliate of the Big Four accounting firm, and simultaneously launched Giuliani Capital Advisors LLC, which will advise companies on acquisitions, restructurings and other deals.