One way to keep momentum going is to have constantly greater goals."
--Michael Korda,
British-American writer
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| Financial Planning Digest |
| April 24, 2012 |
Low-risk stocks lead to higher returns, study says
A recent study is challenging the link between risk and reward when it comes to investing in stocks. An analysis of global stock markets between 1990 and 2011 found that the least volatile stocks had significantly higher returns than those whose prices fluctuated the most. The least volatile U.S. stocks had returns of more than 12% during that time, while the most volatile had an average decline of nearly 9%. InvestmentNews (free registration) (4/19)
Lawmakers retain tax breaks for retirement plans
The House Ways and Means Committee has left tax breaks for retirement savings intact for now, following a hearing April 17 on whether such tax treatment should be altered. Neither Republicans nor Democrats appeared eager to change the incentives for workers to contribute to 401(k) plans and IRAs. InvestmentNews (free registration) (4/17)
Other News
IRS regulations address ordering rules under Section 642(c)
The Internal Revenue Service has issued final regulations for ordering rules for estates and trusts under Section 642(c). The rules require that provisions identifying funding sources must have an independent economic effect to be valid for federal tax purposes. The regulations will apply primarily to ordering rules found in governing instruments for charitable lead trusts. JournalofAccountancy.com (4/16)
How to choose between long-term-care options
Clients who are in the market for long-term-care insurance will need to select between "short-fat" and "long-thin" policies. The first offers higher benefits over a short period of time, and the other offers lower benefits over an extended period. Short-fat policies are more costly, but they can offer greater flexibility for patients, Michael Kitces writes. Nerd's Eye View blog (4/19)
Valuable artwork raises questions for estate clients
Clients who own valuable artwork will need to make important choices to ensure pieces are handled correctly under their estate plans, Patricia Annino writes. The first step is to receive a professional appraisal to guide decisions about a potential sale and taxes. Then, clients need to consider gifting options, including trusts, that can be used to transfer works to individual beneficiaries or charities. Wealth Management Insider (4/19)
Other News
Should your retired clients keep cash reserves?
Some investors prefer to keep several years of spending money in cash to protect against portfolio losses during retirement. An analysis found that the strategy is likely unnecessary for clients who employ a proper rebalancing strategy, Michael Kitces writes. However, keeping cash reserves can still offer important benefits such as helping clients stick to their investment strategy and improving returns under the right conditions. Nerd's Eye View blog (4/18)
S&P 500 promises dividend growth in 2012
Dividend-paying stocks have long played a role in boosting the performance of equity portfolios. Trends suggest S&P 500 companies will increase dividend payments even further in 2012. Long-term investors can tap into higher dividends by building a portfolio around S&P 500 firms from a variety of sectors. Advisor Perspectives (4/18)
Annuities offer clients protection with flexibility
Variable annuities with guaranteed lifetime withdrawal benefits and deferred income annuities are two products that offer investors flexibility along with guaranteed income for retirement. Variable annuities offer a more steady income, but less growth potential. Deferred annuities present more risk, but can also be customized to meet clients' individual needs. Advisor Perspectives (4/10)
Other News
Final regs require reporting of interest payments to nonresident aliens
Under final regulations issued by the Internal Revenue Service, banks and other financial institutions will be required to report to the IRS interest payments made to nonresident alien account holders who live in countries that have an agreement to exchange tax information with the U.S. The new rules go into effect Jan. 1. JournalofAccountancy.com (4/18)
Why it may be time to give your website a makeover
Researchers using eye-tracking software have found that visitors pay extra attention to visual elements on websites such as logos and navigation bars. The findings highlight why advisers need to ensure their websites are leaving a positive first impression on potential clients. Your website conveys information about your practice before clients ever set foot in your office, Michael Kitces writes. Nerd's Eye View blog (4/17)
Other News
Tomorrow! Free webinar for consumers: Taxes -- Start Your Money Plan Here
360 Degrees of Financial Literacy, in partnership with the AICPA's Personal Financial Planning Section, is offering a free consumer webinar series, Take Charge: Your Money. Your Life. The next webinar in the series, Taxes: Start Your Money Plan Here, will take place from 1:30 to 2:30 p.m. Eastern time Wednesday. In this webinar, Mackey McNeill, CPA/PFS, will explain how you can use your tax return to create a comprehensive financial plan, including how to ensure your retirement plan delivers, how to evaluate your investment strategy, how to protect your assets and more. Register today.
Webinar: CPA/PFS Perspectives on Offering Investment Services
Register today for this inaugural webinar of a new quarterly series: CPA/PFS Perspectives, to be held from 1 to 2:30 p.m. Eastern time May 7. This webinar features a panel of successful CPA Personal Financial Specialists who will discuss the practical aspects of offering investment services. Each panel member brings a different perspective on the topic and will discuss his or her experiences and answer your questions.
This webinar is available free without CPE to PFP/PFS members and available for purchase with CPE for all with discounts for PFP/PFS and Tax Section members. Register today!
PFS Exam Review Web Class: PFP Section members save $100!
In six segments, the PFS Exam Review Web Class will help you understand the technical foundation of the personal financial planning discipline and prepare you for the Personal Financial Specialist Examination. For your convenience, these six segments will be broadcast live two times between May 8 and 23. You have the option to select the time that's most convenient for you. Plus, you'll have access to the archive after the event is broadcast, so you can use these video segments as a reference tool to help you study for the PFS Exam. Watch all six segments live and receive 15 hours of CPE. Purchase the PFS Exam in the same order and receive a 10% discount. Qualify for a PFS Exam Sponsorship to further offset the cost.
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