Our Top Seven Ideas for Accounting and Financial Services The author discusses findings from a Hinge Research Institute (HRI) conducted with 523 professional services firms regarding why firms do not get more referrals. One interesting finding was why firms do not get more referrals. HRI found that in 72% of cases, the answer is simple: no one asked them. HRI also learned that 81.5% of service providers have received referrals from individuals and companies who they have never worked with. Below, the author explains the top seven referral marketing approaches HRI learned about. But first, the author takes a minute…
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Knowing the Business is Critical to Effective Risk Oversight In this article, the author shares excerpts of a speech he presented to board members regarding the importance of managing risk and sources of risk.
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Ted, a senior VP at a large media company, was famous for publicly deriding and humiliating others. Working for him was like walking on eggshells, as he could fly into a rage over the most trivial matters. He would also impose deadlines designed to set his staff up for failure. To top off his bullying behavior, he expected his staff to work 24/7, leading many to complain about stress-related problems. Ted’s management style sapped the morale of his division, which was afflicted by a disturbing absenteeism rate and high turnover. To read the full article in Knowledge Instead, click: What…
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Many of the biggest beneficiaries of President Donald Trump’s tax overhaul have not even been born yet. The new law doubles the amount that can be passed to heirs without worrying about estate and gift taxes, to about $22 million for a married couple. But the thresholds are in place only until 2025, and the ultra-rich are turning to a key tool—the dynasty trust—to secure the financial futures of their grandchildren, great-grandchildren, and beyond. To read the full article in FinancialPlanning, click: The Ultra Rich are Turning to This Key Tax-Cutting Tool.
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When an NFL-athlete client heard about the alleged fraud of star quarterback Vince Young in 2012, former advisor Kenneth Ray Cleveland used it to his advantage. “Saw that, but it is like I said this morning in my text message, you get the credit for your financial success,” Cleveland wrote in a 2012 e-mail to former Indianapolis Colts defensive tackle Cory Redding. “Dare I say Vince Young is every bit as good an athlete as Cory Redding, but Cory Redding does his homework.” To read the full article in FinancialPlanning, click: Advisor Gets Prison for $4.7M Fraud of NFL Star.
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Considerations for Fair Market Value Healthcare enterprises are increasingly relying on intangible assets to enhance their ability to provide timely, quality professional medical services to patients. Trade secrets are one such class of intangible asset that may be owned by a healthcare enterprise. A trade secret is any information that has economic value and is not generally known by the public. Technical and specialty research may be considered the “work-in-progress” of patents, copyrights, trademarks, or other intangible assets, and this research usually entails the use of trade secrets, i.e., special “know how” that is often protected (or padlocked), in contrast…
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Odds as a Financial Ratio in Business Valuation Theory Every business transaction involves a bet of sort. This is also evidenced in the price of put and call options. Can we draw some insight from sports betting to help us calculate the value of a business? Perhaps. Odds in sports betting is a common expression communicating the change and return of winning a bet. Odds as a ratio in business valuation theory is presented in this article. Using odds as a ratio in business valuation helps expressing the probability of a forecasted free cash flow. This might start further discussions…
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The Social Security cost-of-living adjustment could be more than 3% next year, but seniors are grappling with increases in household expenditures that are even higher, according to a report. To read the full article in Think Advisor, click: Social Security COLA Could Exceed 3% Next Year, Report Says.
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Technology is rapidly changing the way advisors meet clients, so much so that the relationship may look completely unrecognizable in just a few years. And that transformation opens up several key opportunities for innovators. To read the full article in FinancialPlanning, click: An Amazon for Financial Services? The Race is On.
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One rule of thumb that’s commonly incorporated into financial plans assumes clients will have paid off their mortgage before entering retirement. Not only does it ease cash-flow concerns for initial retirement years, but it can also create a sense of calm as clients become debt free. To read the full article in FinancialPlanning, click: Mortgage Advice it Might be Best to Ignore.
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Is Not Debatable This article explains why the undiscounted terminal value as of a future date must be discounted back by (a) N – 0.5 years when the traditional perpetuity method with a mid-period convention is used, (b) N years when the traditional perpetuity method with an end-of-period convention is used, or (c) N years when an exit multiple is used.
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Are You Properly Insured? Expert witnesses face many of the same risks other businesses face; from first-party losses such as damage to property, to third-party losses from legal liability. While the nature of a business dictates specific insurance needs, most businesses carry a portfolio of insurance that includes property and business interruption, commercial general liability and excess liability, automobile liability and physical damage, and workers compensation insurance. Professionals such as doctors, lawyers, accountants, and yes, expert witnesses, face special risks from their performance of “professional services” for third parties, and thus have the need for professional liability insurance which is…
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New duties will require plenty of understanding and good communication. Many experts expect accountants’ work and duties to change fundamentally in the coming years. Technology will allow for a more complete audit that uses all available data rather than samples. And the scrutinizing of anomalies will provide opportunities for auditors to provide more useful information to clients. To read the full article in the Journal of Accountancy, click: Four Skills Accountants Need to Succeed in a Tech-enabled Future.
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Five years ago, I made the biggest mistake of my career. I gave some untimely advice to a new client and quickly realized the full impact our work can have on our clients’ lives—not just on their wallets. To read the full article in FinancialPlanning, click: The Worst Retirement Advice I Ever Gave.
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When Bill Martin recently donned a pair of virtual reality goggles at Fidelity Investments’ client advisory council meeting in Boston, he was skeptical about whether the technology would be of any use for financial advisors. But after a tour through the virtual world, Martin, chief investment officer at Wichita, Kansas-based INTRUST Bank, returned like Neo in “The Matrix,” ready to see how deep the rabbit hole goes. To read the full article in FinancialPlanning, click: Virtual Reality in Wealth Management? It’s Happening.
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Mike Gregory Discusses the Newly Released Five in One Book on Business Valuations and the IRS In this article, Michael Gregory provides some thoughts of how the official IRS rules of engagement are different from the unofficial rules of engagement and introduces how to work with the IRS. The 38 examples in the book provides additional insight. Mike Gregory recommends the book to all business valuation firms that have a library and those that prepare reports for federal tax purposes. Parts One and Two of the book discuss the IRS structure, process, and how to resolve conflicts with the IRS;…
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On Business Valuations The Tax Cuts and Jobs Act (TCJA) changes many aspects of how business analysts perform valuations. Upon passing of the TCJA, Jim Hitchner moved quickly to gather and disseminate information about the TCJA and its effect on business valuation. He has written two comprehensive articles in Issues 72 and 73 of Financial Valuation and Litigation Expert. The information in this article summarizes some of the main points expressed in those publications.
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If you or your organization is interested in adopting blockchain technology, you need to know the difference between public and private blockchains. One might be a better option than the other. This blog post can help you decide. To read the full article in AICPA Insights, click: Public vs. Private Blockchains: What CPAs Should Know.
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Triggered by the growing demand for greater value, the financial services industry is creating new categories of products and services that never existed, expanding access in ways that were never expected, providing greater transparency and simplicity—and driving down costs to unprecedented lows. To read the full article in FinancialPlanning, click: How Advisors Can Beat the Fee Compression Race.
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Women financial advisors stand a long way from equal footing with men in terms of hiring and pay—and independent broker-dealers are no exception to the industry-wide disparities. The average share of female registered representatives out of the total headcounts of the largest IBDs amounts to an estimated 17%, according to data submitted by firms for Financial Planning’s 33rd annual FP50 survey. To read the full article in FinancialPlanning, click: Which Independent Broker-Dealers Have the Highest Percentage of Women Advisors?