Financial planning

EARNINGS FOR FINANCIAL PLANNERS RISE IN 2005: Earnings for financial planners have risen 27 percent from their 2004 levels, according to a survey conducted by the College for Financial Planning in conjunction with the Financial Planning Association. Its 2005 Survey of Trends in the Financial Planning Industry showed that the median gross amount of planner earnings climbed to $277,800 in 2005.The majority of CFP professionals surveyed (56 percent) also reported that their income is the result of a combination of fees for service and commissions, while only 34 percent reported that their income is the result of fee-only services. When asked about clients' net worth, planners reported the continuation of a trend from previous years, with a 33 percent increase - to $1 million - over last year's reported amount of $750,000. In other findings regarding the financial planning market, 67.3 percent of planners participating in the survey prepared between one and 19 single-focus plans, while 62.7 percent prepared up to 19 comprehensive plans.

Investment advisors write books for many reasons.Some have practice management techniques that they feel could help others. Some have a particular planning or investment expertise. Others just want to see their name on the dust jacket. Check your cost benefit analysis calculators before starting, say veteran scribes: The task is a monumental one, and the benefits often come quite indirectly.

The recently enacted Energy Tax Incentives Act of 2005 includes new and substantial tax incentives for individuals to make energy-saving (and some energy-creating) improvements to their homes.The incentives come in the form of tax credits, which reduce federal tax bills on a dollar-for-dollar basis. Unlike many other tax credits contained in the Internal Revenue Code, these energy tax credits are not phased out for higher-income individuals. These credits are available for certain energy-saving home improvements made in 2006 and 2007.

For the fourth consecutive year, Plante Moran Financial Advisors placed among the top 10 largest independent financial advisory firms in the nation based on total assets under management, according to Bloomberg Wealth Manager's fifth annual rankings.With more than $3.9 billion in total assets under management, PMFA ranked seventh in terms of overall assets; the firm also is 45th based on average client relationship size. Bloomberg Wealth Manager's annual financial advisor ranking includes 500 firms from across the United States.

U.S. TO REISSUE 30-YEAR BOND IN Q1 2006: The Bush administration said that it would resurrect the 30-year Treasury bond, a move that it said would help to finance the national debt and, at that same time, appeal to conservative investors looking for long-term options.

When CPAs add financial services to their practices, the overwhelming method of entry is to affiliate with a broker/dealer and receive commissions. For many, there is a next stage: transitioning to a model of full financial advisory with compensation from fees based on assets under management. Careful management of the rebranding can ease clients into the new way of doing business.

A number of CPA volunteers were recently recognized by CPA societies in California and New York.

Broker/dealers who are not registered as investment advisors must now give brokerage customers a disclosure stating that their interests may not always be the same as their customers.

* AICPA WINS AWARD FOR FINANCIAL LITERACY EFFORTS: The American Institute of CPAs has received a 2005 Summit Award from the American Society of Association Executives for its national 360 Degrees of Financial Literacy program.

What criteria determines a good or bad credit risk?

A survivor annuity, either in the form of a qualified joint and survivor annuity, or QJSA, if the participant is alive on the starting date, or a qualified pre-retirement survivor annuity, or QPSA, if the participant dies before the starting date, must be provided to married plan participants and their spouses with respect to certain qualified plans.

* N.J. ATTORNEY GENERAL BUSTS AMEX FINANCIAL ADVISORS: American Express Financial Advisors Inc. will pay New Jersey $5 million and implement company-wide reforms to address allegations that it failed to reasonably supervise its financial advisors.

Ask any reputable financial planner how to secure a decent retirement, and you might just get a laundry list of what you should or should not do. Most represent pretty good thoughts.

The 10 percent penalty tax on withdrawals from an IRA before age 59-1/2 does not apply to distributions from either a traditional IRA or a Roth IRA to the extent that the amount withdrawn is used to pay qualified higher education expenses. The qualified higher education expenses may be incurred by the taxpayer, the taxpayer's spouse, or any child or grandchild of the taxpayer or the taxpayer's spouse.

The Financial Planning Standards Board Ltd. - the nonprofit umbrella organization that manages the CFP certification program outside the U.S. and its territories - is now seeking nominations from the U.S. for a three-year position on the FPSB board, with terms beginning Jan. 1, 2006.

* INVESTORS WANT MORE IN DC PLANS: Investors today want more options and advice in their defined-contribution plans, according to a survey of plan sponsors.The number of investment choices in defined-contribution plans now averages 16, down from 20 in 2001. That compares with an average of 11 investment choices in 1998, according to a triennial survey of plan sponsors by institutional investment consulting firm Callan Associates. The survey polled 95 plan sponsors with more than $100 billion in total assets and 1.1 million participants.

Question: What do tax season and the family scrapbook both have in common?Answer: They are both keys to growing your firm's financial planning practice.

The American Jobs Creation Act of 2004 provides that the amount of a deduction for charitable donations after 2004 of qualified vehicles where the claimed value is more than $500 depends on the charity's use of the donated vehicle.Qualified vehicles include motor vehicles, boats and planes that aren't inventory or held for sale in the ordinary course of business. The Internal Revenue Service has issued Notice 2005-44 to provide detailed guidance on the charitable contribution rules that apply to qualified vehicles that are donated after 2004.

In a divisive 3-2 vote, the Securities and Exchange Commission amended and re-approved a proposed rule requiring the directors of mutual funds to be independent that had been ruled against by a federal court in a lawsuit a little more than a week before.

* FIRM UNVEILS FINANCIAL CONCIERGE PROGRAM FOR PRO ATHLETES: Piascik & Associates, a Richmond, Va.-based CPA and financial planning firm, has rolled out a financial concierge program for its professional athlete clients. The program is designed to keep professional athletes on a managed budget with automatic, on-time bill payment and advice on making high-dollar purchasing decisions on tangibles such as cars, jewelry and houses.