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April 17, 2012
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A weekly digest of news and industry updates for the financial planning community

  Top Story 
  Policy Watch 
  • Rep. Bachus will reintroduce bill for adviser SRO
    A revised bill placing financial advisers under the supervision of a self-regulatory organization is expected this week from Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee. The bill, which is likely to suggest FINRA as the SRO, could be "somewhat different" from a discussion draft circulated by Bachus, said Duane Thompson, senior policy analyst at fi360, an investment-education consultancy. (4/13), AdvisorOne (4/12) LinkedInFacebookTwitterEmail this Story
  • Tax battle is likely to shape election this year
    Democrats' proposal for raising tax rates for millionaires, the so-called Buffett rule, failed in a Senate vote Monday, but the themes of tax fairness and deficit-reduction that the party has associated with it still are likely to shape this year's elections. Meanwhile, Republicans are pushing their own tax bill offering tax cuts for small businesses, a move that advocates say would create more jobs. The Republican bill, scheduled for a House vote on Thursday, is also expected to fail in the Senate. But its policy goals, similarly, will influence Republicans' campaign debates. Reuters (4/16) LinkedInFacebookTwitterEmail this Story
  • SEC advisory panel's focus could include target-date funds
    The Securities and Exchange Commission has created an investor advisory committee to advise the agency on regulatory matters, though the 21-member panel doesn't yet have a chairman or meeting schedule. Committee member Steven Wallman said target-date funds could be among the panel's priorities, because when policymakers "help cajole or suggest that people default [into] them, that becomes a really important issue." InvestmentNews (free registration) (4/11) LinkedInFacebookTwitterEmail this Story
  • GOP proposes CFPB budget cuts, Dodd-Frank changes to trim budget
    Seeking to trim $35 billion from the federal budget, Republican members of the House Financial Services Committee are targeting parts of the Dodd-Frank Act, including slashing the Consumer Financial Protection Bureau budget by more than half. The biggest savings would come from eliminating the "resolution authority" that allows regulators to seize and unwind large ailing financial institutions. The Hill/On the Money blog (4/13) LinkedInFacebookTwitterEmail this Story
  • Study raises concerns about fiduciary proposal
    A study of the U.S. Labor Department's proposed expansion of the fiduciary standard to cover individual retirement accounts found that more than 7 million IRAs would lose service. The study, conducted by the Oliver Wyman Group, found that account costs would increase while the level of service would decrease. InvestmentNews (free registration) (4/10) LinkedInFacebookTwitterEmail this Story
  Practice Management 
  • A privacy checklist to protect your firm and your clients
    Personal information is being shared constantly on the Internet, making it important for financial planners to take steps to protect firm and client privacy, writes RIA Independence President Ash Bhatnagar. He offers a risk assessment for planners, a list of items that planners should never collect from clients and a list of items that should not be transmitted through e-mail. Management Center blog (4/10) LinkedInFacebookTwitterEmail this Story
  • What intellectual advisers gain from transparency rules
    There are two types of planners in the world: those who rely on their personality to sell services and those who rely on their professional skills, Jack Waymire writes. The latter type is bound to prosper as investors and regulators increasingly look for transparency. That's because truly skilled planners are happy to document and provide their qualifications to potential clients. "The only advisors who can afford to practice transparency are high quality professionals who have nothing to hide," Waymire writes. (4/11) LinkedInFacebookTwitterEmail this Story
  • How valuation-based asset allocation can help long-term savers
    Valuation-based asset allocation can improve investors' outcomes over the long term, Wade D. Pfau writes. His analysis of historical data shows that the approach supports both lower savings rates and higher withdrawal rates in many cases. Planners who don't apply valuation-based allocation may still be able to use the method to convince clients to hold equities in times of uncertainty, Pfau writes. Journal of Financial Planning (4/2012) LinkedInFacebookTwitterEmail this Story
  • Analysis reveals tax-efficient withdrawal strategies
    This article considers 15 retirement-withdrawal strategies to determine the most efficient approach under federal and state tax laws. Some common strategies such as reducing short-term taxes or delaying the use of taxable assets often produce inefficient outcomes, the authors conclude. Also, a high final account balance will usually result in greater tax liability. Journal of Financial Planning (4/2012) LinkedInFacebookTwitterEmail this Story
  • Other News
  Industry Report 
  • More Americans plan to spend tax savings, survey finds
    More U.S. taxpayers plan to spend the extra money they will receive from payroll tax cuts this year, according to a survey by John Hancock Financial Services. Twenty percent of respondents said they are likely to spend their extra funds, compared with 12% last year. At the same time, nearly half of respondents expect to save their tax refunds, while 25% will use refunds to pay off debt. (4/10) LinkedInFacebookTwitterEmail this Story
  • 5 ways clients can tackle rising health care costs
    Americans are increasingly worried about their ability to pay for health care during retirement, surveys indicate. Meanwhile, a significant number of adults say they don't have a plan for paying for health care in retirement. Planners can help clients prepare by taking steps including setting savings goals, managing Medicare and shopping for long-term-care insurance, Mark Miller writes. Registered Rep. (4/13) LinkedInFacebookTwitterEmail this Story
  • Studies find financial literacy is lower among women, youth
    Women, the elderly and the young showed the lowest levels of financial literacy in recent studies by George Washington University, and 60% of Americans overall have not made any calculations whatsoever for their financial needs in retirement. The research suggests that financial education needs to be started at a young age and more heavily promoted among workers as companies shift away from traditional pension plans. "People spend more time planning their annual vacations than they do planning their own retirement," said Mark Schwartz, the senior executive vice president of AXA Advisors' Washington, D.C., office. (4/13) LinkedInFacebookTwitterEmail this Story
  • Other News
  FPA News 
People who don't take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year."
--Peter Drucker
Austrian-American writer and management consultant

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