Financial planning

SEC WON'T APPEAL COURT DECISIONThe Securities and Exchange Commission said that it would ask a court to allow four months for investors and their brokers to respond in light of a court decision affecting an estimated 1 million fee-based brokerage accounts.

A new nationwide research study on family businesses commissioned by Seattle-based Laird Norton Co., a diversified financial concern, shows that overwhelming optimism of the owners of family businesses about their future might prove to be premature because of a lack of strategic vision, succession planning and governance policies.The survey showed that nearly 60 percent of majority shareowners in family businesses are 55 or older, while 30 percent are 65 or older. However, less than 30 percent of those respondents even have succession plans in place, and fewer than 40 percent have a successor lined up.

When it comes to retirement planning, there are a number of different choices. Two of the most commonly used are tax-deferred retirement plans - such as IRAs or 401(k)s - and cash-value life insurance.

TREASURY ISSUES ROTH 401(K) RULES

The fact that there has been no Baby Boomer "bust" has been due in large part to the skill of retirement planners, accountants and their clients.The bust was supposed to occur as Boomers began reaching retirement age without having saved enough to retire. This, coupled with the dismantling of the retirement and pension programs at a host of corporations nationwide, could have created the most poverty-stricken generation of retirees since the Great Depression.

The Certified Financial Planner Board of Standards said that after more than 20 years in Denver, the organization plans to relocate its headquarters to Washington, D.C. CFP Board chair Karen Schaeffer said, "The financial planning profession and the people it serves are being significantly impacted by public policy developments and trends in the financial sector that can best be monitored, influenced and managed from our nation's capital."The board expects to complete the move over the next few months.

Although couples generally agree on which retirement products they own, they often differ on their plans and expectations for retirement, according to research conducted by Fidelity Investments.Fidelity polled couples born between 1937 and 1964. When asked which income sources they would rely on most in retirement, most couples agreed that workplace savings plans, pensions and Social Security would top the list, but only 39 percent agreed upon which potential sources would be their primary source of income.

Baby Boomers - those Americans who were born between 1946 and 1964 - total about 79 million people.This segment of the population may soon find that they will be spending more annually in their retirement years than they did while working. Over the past century, life expectancy has increased over 56 percent, and this trend is expected to continue, so Baby Boomers will face the financial challenge of the cost of living for many years in retirement, as well as the associated costs of aging.

COURT NIXES SEC RULE GOVERNING FINANCIAL PLANNINGA federal appeals court ruled that the Securities and Exchange Commission overstepped its authority in updating rules governing brokers who offer financial advice.

If life insurance professionals picture the accounting profession as it was a decade or two ago, they may be forfeiting an opportunity to build a mutually beneficial alliance.

MORNINGSTAR COMPLETES PURCHASE OF S&P FUND DATA UNIT

Financial planners reported mean gross earnings of $283,079 in 2006, an increase of more than $50,000 from a year ago, according to a recently released survey.

Your clients probably want to leave as much as possible to their heirs. However, if they don't take minimum distributions from their Individual Retirement Accounts after they reach 70-1/2, the government could take a substantial amount of those assets.The Internal Revenue Service can charge an excise tax of up to 50 percent if clients don't take the required minimum distribution from their IRA accounts or qualified retirement plans by April 1 of the year after the year they turn 70-1/2.

USE OF ALTERNATIVE INVESTMENTS TO INCREASE AHEAD OF BOOMERSRegistered investment advisors intend to ratchet up their use of alternative investments such as hedge funds, real estate, commodities and currencies in the next five years, according to a national survey released by Rydex AdvisorBenchmarking.

Insurance and financial services conglomerate New York Life Insurance Co. is donating $2 million to establish the New York Life Center for Retirement Income at Bryn Mawr, Pa.-based financial educator The American College.The company said that the purpose of the endowment was to help address the demand for sound retirement income solutions among retired Americans. The gift to the nonprofit educator of insurance and financial professionals will provide permanent support for programming and research.

Industry data projects that by 2010, nearly half of all CPA firms will, to some degree, be providers of financial services to affluent clients.This represents a dramatic leap from the situation today, when only 19.4 percent of CPA firms are currently providing financial services to this client base. The opportunity is there, but to tap into it, firms must expand their capabilities and services, which increasingly involves building alliances with insurance and benefit companies.

Retirement is the No. 1 personal financial planning concern, regardless of age, according to an informal survey taken by the American Institute of CPAs at its Personal Financial Planning Conference.The AICPA said that it was a surprised to see that retirement planning is a major concern for career builders - classified as those between the ages of 25 and 34 - who also have the more immediate pressures of education, home buying and debt management following close behind.

Broker/dealer H.D. Vest has teamed with Cannon Financial Institute, a provider of financial services consulting, to provide practice management training to its top 600 advisors. The training sessions are scheduled to take place in Arizona and Texas in May, and the program has been named "Elite Academy." Participants will begin with a single concentrated workshop on "creating a consistent client experience."

Morningstar Investment Services, a registered investment advisor and subsidiary of financial information concern Morningstar Inc., has launched Morningstar Managed Portfolios Select Stock Baskets, a managed account service consisting of customized stock portfolios based on Morningstar indexes and independent equity research.The Morningstar Indexes form the basis of each stock basket's investment composition, and the stock basket is subsequently tailored to suit an investor's specific parameters, including sector and industry exposure, stock restrictions, existing holdings, and personal tax situation. MIS then selects stocks for the portfolio using Morningstar data and research on the stocks within the index.

Individuals typically transfer assets to family partnerships hoping to achieve large estate tax discounts for the assets that would not otherwise be available if the assets were retained in outright ownership. The discounts, in turn, could result in substantial tax savings. However, in order to achieve the desired results, a number of hurdles must be overcome.The Internal Revenue Service has issued Appeals Settlement Guidelines for family limited partnerships and family limited liability companies. These guidelines can help practitioners overcome some of the hurdles. By carefully examining this document and the pro- and anti-taxpayer cases examined in it, a practitioner should be in a position to craft an FLP or FLLC that will achieve a desired level of discounts for a client's estate.