Audit

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.

Deloitte & Touche debuted a Deloitte Film Festival featuring short films submitted by teams of Deloitte employees from around the U.S.

David Amir Makov, one of the remaining defendants in the KPMG tax shelter case, pleaded guilty in Federal District Court in Manhattan to one count of conspiracy to commit tax fraud and agreed to cooperate with prosecutors.

Reznick Group said it has signed a letter of intent to acquire another accounting firm, Tidwell DeWitt, building its presence in the Southeast and adding more services.

Influential accounting profession veteran Mark Tibergien has been named chief executive officer of Pershing Advisor Solutions LLC, an affiliate of Bank of New York Mellon subsidiary Pershing LLC.

DELOITTE DECLINES ATARI RE-ELECTIONBig Four firm Deloitte declined to stand for re-election as auditor to video game manufacturer Atari Inc. A regulatory filing did not give a reason for the decision. New York-based Atari said that its audit committee had received several proposals from other accounting firms. At press time a successor had not been named.

Big changes are coming for financial statements, if the Financial Accounting Standards Board's recent discussion with its advisory board is any indication.This spring, at a meeting of its Financial Accounting Standards Advisory Council, the board and staff discussed their working ideas on what statements could and should look like in the future if they are going to be useful. The discussion took place in the context of the board's joint project with the International Accounting Standards Board on financial statement presentation. It was held in anticipation of releasing a preliminary views document sometime this fall.

Responding to widespread uncertainties about the implementation of Financial Accounting Statement 133, Accounting for Derivative Instruments and Hedging Activities, the Financial Accounting Standards Board has issued a proposed implementation issue intended to make it easier for companies to use the "shortcut method" in accounting for many hedging transactions.It should also help those companies' confidence.

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.”

Crowe Chizek said it plans to combine practices with Carter, Belcourt & Atkinson, expanding the Oak Brook, Ill.-based accounting firm's footprint in Florida.

Fidelity Investments has begun offering a Web-based retirement-planning tool, Fidelity Retirement Income Evaluator, aimed at helping advisors create and manage retirement plans for clients.

The International Accounting Standards Board issued a revised version of its standard for the presentation of financial statements aimed at improving users' ability to analyze and compare the information in them.

Thomson Corp. said it would acquire the Deloitte Tax LLP Property Tax Services business for an undisclosed sum.

KPMG's Canadian arm found itself on the receiving end of a class-action lawsuit, claiming that the firm did not properly compensate employees for their overtime work or denied them overtime compensation altogether.

The Virginia Society of CPAs debuted an "Ask a CPA" e-mail program that promises free answers to personal financial questions within three business days.

Accounting firm Grant Thornton has launched a Financial Services Group in the United Kingdom that combines its old Financial Markets Group with the financial services practice it acquired from its merger with RSM Robson Rhodes in the U.K.

CPA firms saw big gains in both income and fees last year, thanks to the demand for Sarbanes-Oxley compliance services, according to a newly released survey.

CEOs of Fortune 100 companies are receiving increasingly valuable financial planning perks, according to a new study.

Financial holding company International Bancshares Corp. said that its audit committee has dismissed KPMG as its auditor and replaced the Big Four firm with McGladrey & Pullen.

It’s nice to see that CPAs and their firms are doing very well. According to the just-released 2007 Rosenberg MAP Survey, firms with net fees over $2 million enjoyed annual net fee growth of 11.4 percent in 2006, compared to 9.7 percent in 2005. The average income for partners in these firms, according to the survey, is $350,000.