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January 17, 2013
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Advocating Direct Investments through Education

  Top Stories 
  Policy Update 
  • FINRA focuses on suitability rule
    The Financial Industry Regulatory Authority says it will closely watch whether investment advisers observe its suitability rule when recommending "complex or high-yield products" to clients. "Investor appetite for yield, among other factors, has bid up market prices on investment-grade and high-yield debt, putting pressure on upside growth potential and creating significant downside risks," FINRA said in a letter describing its regulatory concerns for 2013. "In this environment, FINRA is particularly concerned about sales practice abuses, yield-chasing behaviors and the potential impact of any market correction, external stress event or market dislocation on market prices." (1/14), The Wall Street Journal (1/14) LinkedInFacebookTwitterEmail this Story
  • Clash of confidentiality rules to shake up marketing of private funds
    The Securities and Exchange Commission and the Commodity Futures Trading Commission have issued a rule on information confidentiality that contradicts one from the Financial Industry Regulatory Authority. The situation is expected to further increase the cost of marketing alternative investments. Regulatory investigation and arbitration also are likely to be affected. Broker-dealers and financial advisers will need to change the traditional ways in which alternative investments have been marketed, writes Kevin Duffy, a partner at Kaufman Dolowich Voluck & Gonzo. InvestmentNews (free registration)/Outside-IN blog (1/15) LinkedInFacebookTwitterEmail this Story
  • SEC is set to ease restrictions on investment advertising
    The Securities and Exchange Commission is drafting rules that would let companies use advertising and other forms of mass marketing to attract investors. Supporters and critics disagree on whether relaxing regulation of investment promotion would benefit legitimate startups or help scammers swindle investors. The Washington Post (1/14) LinkedInFacebookTwitterEmail this Story
  Industry News 
  • IRS issues 2013 inflation-adjusted items for individuals, estates
    The Internal Revenue Service on Friday released 2013 tax tables and other inflation adjustments, including items important to individual taxpayers and estates. The inflation-adjusted numbers include increased personal exemption and standard deduction amounts, the new unified credit against the estate tax, and the new alternative minimum tax exemption. Various credit amounts are also updated. The release reflects changes made by the American Taxpayer Relief Act. (1/11) LinkedInFacebookTwitterEmail this Story
  • More Americans use retirement savings to pay bills
    U.S. workers increasingly are paying for expenses by withdrawing money from their retirement savings accounts. More than 1 in 4 workers draw funds from 401(k) plans and similar funds to pay mortgages, credit card bills and other personal expenses, and more than one-third of these workers are in their 40s. The Washington Post (1/14) LinkedInFacebookTwitterEmail this Story
  • Survey: Many employees of nonprofits have retirement concerns
    Although 59% of employees at nonprofit and philanthropic organizations report high levels of satisfaction with their work, 45% are dissatisfied with their financial preparations for retirement, and only a third had gotten advice on retirement planning in the past three years, according to a TIAA-CREF survey. "The results demonstrate the need for financial planning and advice to help these employees combine the best of both worlds: a fulfilling job and a secure financial future," Paul Yakoboski of the TIAA-CREF Institute said in a statement. AdvisorOne (1/14) LinkedInFacebookTwitterEmail this Story
  Income Planning 
  • When noncash assets work well as charitable donations
    Donating noncash assets such as real estate, restricted stock and collectibles to charities gives the donors flexibility in tax planning and cash management. It is particularly suited for those with long-term capital gain assets and a low adjusted tax basis. However, donors need to be clear on the tax consequences. Financial Advisor online (1/10) LinkedInFacebookTwitterEmail this Story
  • How to handle clients who invest on the side
    About three-quarters of investors who work with financial advisers maintain a separate, self-directed account, a Cerulli Associates report indicates. Such accounts can undermine an adviser's work, Cerulli officials say. Some experts recommend that advisers get information about outside accounts and try to persuade clients to minimize them. The Wall Street Journal (1/11) LinkedInFacebookTwitterEmail this Story
  Business Best Practices 
  • What advisers need to know to get ahead
    Avoiding sympathy pricing -- the discounting of services when the market declines -- and distinguishing one's services from others in the market through pricing and value are among the best practices offered by PriceMetrix. Customer mix is also key, according to Pat Kennedy, vice president of product and client services for PriceMetrix. Many advisers "mistakenly believe that small households will eventually become big ones," according to Kennedy. Morningstar Advisor (1/2013) LinkedInFacebookTwitterEmail this Story
  • Create customizable process solutions for your clients
    Advisers must regularly refine internal processes if they want to stay competitive and meet client expectations, writes Bill Winterberg, CFP, a technology and operations consultant. Instead of creating processes, advisers can consult with firms that provide this service, such as Fox Financial Planning Network. Fox Financial offers generic processes that can be customized to a firm's operations, along with video training sessions and training for assistants. Fox Financial has also integrated its technology into several applications for customer-relationship management. Morningstar Advisor (1/2013) LinkedInFacebookTwitterEmail this Story
  IPA Member Information 
  • New brochure for REIT investors
    A new client, FINRA-reviewed brochure, Guide to Understanding Real Estate Investment Trusts, is available. View the REIT brochure. You will also be receiving a copy via mail this week. LinkedInFacebookTwitterEmail this Story
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Not in the clamor of the crowded street, not in the shouts and plaudits of the throng, but in ourselves, are triumph and defeat."
--Henry Wadsworth Longfellow,
American poet and educator

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