Accounting education

During my extended stay in college, my idea of prudent financial planning was to put enough aside to order extra cheese at Pizza Hut on Friday nights. Several decades later, Friday is still pizza night for me, and I've upgraded a bit since then. Now, in a week without any unforeseen expenses like a brake job or a cut and highlights for my wife and daughters, I can splurge on a double order of garlic knots.My rather modest financial portfolio aside, I saw recently that financial planning perks have swelled among the chief executives of Fortune 100 companies. Last year, more than 74 percent of Fortune 100 companies disclosed that their CEO received financial planning-related perks, versus just under 30 percent in 2005.

As a young man, I was a crewmember of a 747 that crashed on takeoff in Kenya. The airline's emergency planning helped me keep cool, think rationally and help save the lives of 90 of the 149 passengers.Today, as principal of a financial advisory firm in Irvine, Calif., I regularly see people approach retirement planning like an airline flight, hoping the unthinkable won't happen. But while the chances of a crash are remote, the financial markets are considerably less predictable. Few are prepared for the transition from earnings income to portfolio income.

STUDY: RIAS NEED TO DIFFERENTIATEA study commissioned by Pershing Advisor Solutions projects that as the market for financial services becomes even more competitive, registered investment advisors need to "fine tune" their area of expertise and promote their reputations of specialized knowledge in a given niche. The report said that specialization is crucial, given that consumers who seek financial advice are becoming more sophisticated in their market knowledge, and thus are sparking a growing demand for qualified individuals.

The many practitioners who conduct valuations in the normal course of their practices will shortly be required to follow, for the first time, detailed standards, because the Consulting Services Executive Committee of the American Institute of CPAs has issued a comprehensive professional statement of standards - Statement on Standards for Valuation Services No. 1, Valuation of a Business, Business Ownership Interest, Security or Intangible Asset."The AICPA developed the valuation standard to improve the consistency and quality of practice among its members who perform engagements that estimate values for various reasons," said AICPA president and CEO Barry Melancon, in a statement. "Congress, government agencies and accounting regulators have recently focused their attention on appraisal issues - such activity shows the importance of valuation to the business community and individuals. The standard promotes greater transparency and provides our members with a set of guidelines in the unique context of a CPA practice."

Leave it to the guys from Harvard, eh? Right now, when everybody and his cat are trying to figure out what’s happening in the stock market, three entrepreneurs out of Cambridge, Mass. are gathering the best financial minds in the business to figure it all out for you. It’s called Fantasy Investing and it can be found at www.updown.com. This is a Web site launched by these Harvard Business School students. Each partner, it is said, has a significant start-up experience, and shares a common vision to revolutionize the investing world. In effect, The UpDown is a community for stock investors.

This past January, Jack Lynch, our director of advertising sales, and I were at a trade show and watching what has become a growing phenomenon: copies of CPA Wealth Provider were flying off the racks and tables at this show and subsequent various accounting conferences and shows around the country--more so than any other publication. We also noticed that we were getting tons of responses from readers as to how well they liked the magazine. And, I was receiving inquiries upon inquiries from the leading experts in financial planning looking to contribute articles for the magazine. By the same token, Jack was being asked about advertising in this publication because of its enormous reach into the accounting/financial planning community. Of course, all this is coupled with what has been happening today in the financial planning area and the fact that CPAs are literally flocking to financial planning especially now that the Baby Boomers are hitting retirement age. Furthermore, we realized that no one seemed to have produced a ranking of assets under management (AUM) of CPA/financial planning firms, at least not that we were aware. So, we embarked on putting together such a ranking. Keep in mind that AUM is a term originally employed by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. Many financial services companies used this as a measure of success and comparison against their competitors; in lieu of revenue, they had total assets under management. A survey was sent out and the response was staggering. Responses poured in. We had, of course, two criteria for consideration: They must be a CPA firm that has a financial planning practice, even as a subsidiary or affiliate, and the financial planner in the office must hold a CPA credential. In the top list are 11 firms that are in “The Billion Dollar Club” while another 41 firms are in “The $100+ Million Club.” Then there are those in the eight-figure category listed as “Rising Stars.” Not content with just a ranking, we delved beneath the surface and unearthed what affiliations each firm had, such as broker/dealers, wire-houses, financial services companies, and the like. Going even deeper, the survey reveals the financial planning products that each firm recommends in basic categories such as IRAs, 401(k)s, mutual funds, life insurance, bonds, 529 plans, to name a few. We believe the information in our charts, pie charts, graphs, and the like will shed some important light on this burgeoning field of financial planning. So then, here you are. CPA Wealth Provider, the leading national publication for CPAs involved in financial planning, is now presenting the first-ever ranking of CPA/Financial Planning firms by Assets under Management in its October issue. We expect this to be an annual event so if you didn’t turn in your survey form for this one, 2008 is right around the corner. And, if you would like a complimentary copy of the publication, just let me know.

The October issue of our sister publication CPA Wealth Provider has some information which will shock most. It is a ranking of CPA firms with financial planning practices by assets under management. Eleven have over one billion dollars under management. Yes, I said one billion dollars each with Plante and Moran Financial Advisors leading the pack with $5.255 billion. There are 41 firms listed with $100+ million of assets under management.

The Securities and Exchange Commission has charged Dwight Sean Jones, a former NFL player turned investment advisor, with failing to allow commission staff to examine his business records.

Tension can be a good thing - and not only for the pharmaceutical industry.Advisors who appropriately pull the right tension strings will be the ones who win the clients. The key is to recognize tension and either disarm it or increase it, as appropriate.

Alight Planning introduced financial planning and analysis software with collaborative budgeting, forecasting and financial reporting features.

CPA firm Alpern Rosenthal said it is merging with Cass, Levy & Leone in an effort to expand from its Pittsburgh base to Florida.

Everybody talks about the weather, but nobody does anything about it. Okay, how many know who said this? Will Rogers? Nope. Don Imus? No, again! It was Mark Twain (yeah, you knew that) in a newspaper editorial back on August 27, 1897. As quoted by Charles Warner, his actual words were, “A well-known U.S. writer once said that while everyone talked about the weather, nobody seemed to do anything about it.” The remark is generally ascribed to Twain, with whom Warner collaborated on the novel, The Gilded Age (1873). So, now that we’ve gotten that out of the way, how does it relate to the following? Because everybody talks about getting nominations in, but many wait until after the issue closes before waking up. Here then is another crack at it. In the event you haven’t seen all the ads, promos, and press releases, nominations are open for CPA Wealth Provider’s 5th Annual Financial Planning Awards in 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 professional planning area. The winners will be profiled in the January 2008 issue of CPA Wealth Provider and copies of the issue will be included with the January issues of Accounting Today, Accounting Technology, and Practical Accountant, as well as being featured on WebCPA.com and at applicable conferences and conventions including the AICPA Personal Financial Planning Conference in January in Las Vegas. The judges are Bill Carlino, editor-in-chief of Accounting Today, Stuart Kahan, executive editor of CPA Wealth Provider, and Howard Wolosky, editor-in-chief of Practical Accountant. No forms are needed to nominate. Simply send information about what company or firm is being nominated and in what category. Explain briefly how this firm or company has taken the lead through innovation, efficiency, initiative, or growth in the financial planning area. CPA Wealth Provider must receive nominations no later than November 5, 2007. The issue goes to press on December 7, 2007. Send nominations by e-mail, regular mail, or fax to: Stuart Kahan, Executive Editor CPA Wealth Provider, SourceMedia 1 State Street Plaza, 27th Floor New York, NY 10004 Tel: (212) 803-8852 Fax: (646) 264-6828 e-mail: stuart.kahan@sourcemedia.com

The Securities and Exchange Commission voted with the Board of Governors of the Federal Reserve System to implement the bank broker provisions of the Gramm-Leach-Bliley Act of 1999.

Sanders Morris Harris Group, a financial services holding company, has acquired a 25 percent ownership interest in iPro One, a company that provides CPA practices with investment systems and products.

Quantum Simulations said it has begun field-testing artificial intelligence software for tutoring accounting students.

Heading the list of trends that will shape the future of wealth management are taxes and 30-plus-year retirement planning, so says the results of a survey from the Dow Jones Wealth Management Advisory Council. This is s a group of top wealth managers that are dedicated to promoting the practice of wealth management, facilitating industry discussion, and representing the needs and concerns of the profession. Actually, in its report Wealth Trends, there are five key trends that it says will have a great influence on wealth management over the next five years. They are: 1) Taxation. James Covell, senior vp of RBC Dain Rauscher, says that tax concerns will no longer take a back seat to returns if the capital gains tax doubles. He believes that the first priority for wealth managers will be to find tax-efficient investments that ensure clients hold onto their returns. 2) The 30-Plus-Year Retirement. Joseph Montgomery, managing director of investments for Wachovia Securities, opines that no one can really live on relative returns and that with each passing year, life expectancy increases and retirement age decreases. He feels that wealth managers need to ensure that their clients consistently gain real returns rather than getting pulled into investments that follow the swings of the market. 3) Complexity of Investments. According to George Schietinger, director of Credit Suisse Private Banking USA, investment opportunities are both structurally and geographically more complicated than ever and it will only increase. Accordingly, he says that wealth managers must understand the intricate investment options and be able to explain the risks and rewards associated with these opportunities. 4) Team Approach. Montgomery stresses that the stand-alone manager will face challenges and that the future of wealth management, he believes, lies in a team approach involving disciplines such as law, accounting, trust advisory, and financial planning. He adds that each team member must bring a specialty to support the wealth manager. 5) Diversity. Michael Sawyer, managing director, wealth management, for Smith Barney, points out that wealth managers are becoming more reflective of their clientele and that the next five years will see an increase in women and minorities entering the field and reflect the make-up of the high-net-worth market. The Council members agreed that the next half decade will see a shift in the wealth management industry requiring professionals to be more responsive and knowledgeable. They point out that the clients’ need for advice will continue to grow due to an increasingly complicated financial landscape and that tomorrow’s successful wealth managers must have the support of an expert team that will provide both the information and attention to detail that clients require.

CPAs have received a blessing in disguise with the annual continuing professional education requirements that force them to learn something new.

In order to be a member of the Philanthropic Advisors Network, I pay my dues to the National Committee on Planned Giving.Accountants reading this article may also be members of this group, which provides both educational programming and ethical standards for those who work in this field. Those who belong to the NCPG know that one of its major themes is "Leave a Legacy."

INVESTORS OPPOSE SOX REFORMTwo thirds of investors would be concerned about any easing of Sarbanes-Oxley rules, according to a national survey by the Center for Audit Quality, released in conjunction with the five-year anniversary of the legislation.

Enrique Vasquez is a most interesting person. I’ve gotten to know him over the years and have found him to be someone with a firm eye toward the future. Many times he will say, “It’s where I want to be.” Two and a half years ago, Vasquez succeeded the highly personable and knowledgeable David Reedy, one of the founders of Terra Securities which evolved into Genworth Financial Securities and Genworth Financial Advisors, both based in Schaumburg, Ill., the companies that Vasquez now heads. Actually, he moved into the top position as president and CEO at the ripe age of 39. I like to tease him with the fact that I have sneaks of such vintage and that two of my children are older than he is. Still, his background is fascinating. He has a B.S. in accounting from Kean College and an MBA in international finance from Fordham. He began his career with Societe Generale as a financial supervisor and then went over to GE, rising rapidly to become a vice president of GE Financial. Genworth Financial Securities has focused on helping tax and accounting professionals become successful wealth managers for over a quarter of a century and today has more than 2,400 independent representatives licensed in all 50 states. “My goal is to help clients fulfill their dreams by providing wealth management solutions,” says Vasquez. “Our vision at Genworth is to be the partner of choice for the independent financial professional with a focus on accountants and tax preparers.” Under his guidance, Genworth has developed a consultative culture working one-on-one with representatives. “We know that representatives need a strong partner to provide advanced training and support,” notes Vasquez, “so our practice management tools are delivered by seasoned specialists in a way that is customized to the needs of each representative.” In fact, it is noted that Genworth provides representatives with more than 300 training opportunities each year with meetings offered in more than 30 locations across the U.S. Vasquez winks when he is referred to as being so successful. But he points out that figures back him up. “On average, our representatives have been able to grow their business by 20 percent per year. The average tenure for our representatives is seven years.” He expects that to continue to grow. “The future. It’s certainly where I want to be.”