Advisers see tax-deferred annuities growing in importance, poll finds | SEC experiments with more specific penalties | Senate Democrats take budget stance on health cuts
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March 14, 2013
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Advisers see tax-deferred annuities growing in importance, poll finds
An Insured Retirement Institute poll found that 28% of financial advisers think tax-deferred annuities will gain importance in the next five years, compared with 20% who shared such an opinion in 2011. The outlook for increased taxes is a key consideration, the group said in a report. "The federal government will continue to look for ways to resolve the coming fiscal imbalances noted by the [Congressional Budget Office], potentially through increases in revenue and reductions in spending," the report said. OnWallStreet.com (3/13)
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Industry Update
SEC experiments with more specific penalties
The Securities and Exchange Commission may use more customized punishments when penalizing rule breakers, instead of its typical broad prohibitions. "We want to use all of the tools available to us to specifically discourage repeat misconduct and go beyond the injunctions we traditionally obtain," said George Canellos, the SEC's acting head of enforcement. Reuters (3/12)
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Senate Democrats take budget stance on health cuts
Democrats led by Senate Budget Committee Chairwoman Patty Murray, D-Wash., introduced a 10-year budget plan that includes relatively smaller Medicare and Medicaid cuts. The plan challenges President Barack Obama's renewed efforts to strike a budget bargain with Republicans that includes Medicare and Social Security cuts. The Senate proposal would take $275 billion from Medicaid and Medicare instead of the $400 billion in Medicare savings the president proposed. The Washington Post (3/13)
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SEC user-fee bill to be proposed again
Rep. Maxine Waters, D-Calif., says she will introduce a bill within days that would give the Securities and Exchange Commission authority to impose user fees to cover the cost of examining investment advisers. The measure is identical to one Waters introduced last year; it failed to make it to a vote in the House Financial Services Committee before the congressional session ended in December. InvestmentNews (free registration) (3/13)
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Other News
Financial Literacy
529-plan balances surge, report says
Balances in 529 college-savings plans increased 12% on average last year, a report from the College Savings Plans Network says. The average 529-plan balance last year was $17,174, the report said. Despite the increase in balances, tuition growth still outstrips many families' ability to pay for college, said Patrick Callan, president of the Higher Education Policy Institute. CNNMoney/Fortune (3/12)
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On the Economy
Homebuilders focus on markets where lending is looser
Although housing inventory is low in many markets, homebuilders have been biding their time, as potential buyers continue to rent because mortgage lending is tight. In markets where lending is loosening up, builders are buying up land in anticipation of future demand. Surveys indicate that the desire to own is steady, with nearly half of renters saying they'd like to own within five years. Housing Wire (3/12)
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Building Your Practice
Advisory firms respond to the demand for training
Students seek out firms with strong training programs, a survey indicates, and some advisory firms are offering training that in some ways mimics physicians' residency programs. Cornerstone Wealth Advisors runs a four-year residency program in which young planners learn and take care of the firms' basic tasks, then move on after their training is over. Other advisory firms such as Yeske Buie offer training that comes with a structured career path for young hires. The Wall Street Journal (3/12)
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Advisers should focus on long-term care, expert says
Too many financial advisers emphasize investment performance instead of asking about clients' overall goals for their money and protecting that vision with a plan for long-term care, says Don Froude of Ameriprise. Froude cites the example of his father, who accumulated money for retirement without any plan for protecting those assets when he needed long-term care. "Where was the advocate for my family when we needed him?" Froude says. OnWallStreet.com (3/13)
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SmartQuote
People may say I can't sing, but no one can ever say I didn't sing."
-- Florence Foster Jenkins,
American amateur operatic soprano
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