Before investing client assets, advisors are required to assess a client’s risk tolerance. If the investor takes on more risk than they can endure, they are likely to lose more money than they can stomach when the inevitable bear market comes. And even if the market recovers, there’s a risk that the investor will panic sell at the bottom of the market. To read the full article in Financial Planning, click: Risk Tolerance: The Misperception that Keeps Hurting Clients.
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The world is more hectic than ever. Busy professionals often struggle to escape the career treadmill, and omnipresent technology keeps us working around the clock. Dinnertimes eaten up by e-mails and weekends lost to client calls create a costly intrusion. When free time becomes scarce, family activities frequently get moved down the to-do list. To read the full article in the Journal of Accountancy, click: How to Create More Quality Family Time.
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When a male co-worker got too close for comfort, he drove a financial advisor to leave a regional brokerage firm where she had been working for years. He gave other female colleagues shoulder rubs that they “did not want, nor ask for,” said the advisor, who requested anonymity to share her story. To read the full article in FinancialPlanning, click: Wealth Management Fares Worst in Broad Study of Sexual Harassment.
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Case Study of a Real Estate Developer For most lost profits cases, the losses begin at the date of the harmful act and end when the injured party is returned to the position it would have had “but for” the alleged damaging act of the defendant. However, not every lost profit matter is a breach of contract where beginning and ending dates can be easily defined. Sometimes losses may not occur until a period in the future. This situation requires the expert to assess the facts of the case and anticipate the market and economic environment when calculating these future…
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Book Review by Michael D. Pakter, CPA, CFF, CGMA, CFE, CVA, MAFF, CA, CIRA, CDBV In this article, Michael D. Pakter, writes a brief review of Michael Gregory’s latest book, Business Valuations and the IRS: Five Books in One.
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The new tax law could affect existing estate plans, so now is a good time to review documents with clients. Clients may need guidance in five areas, including the impact of the law on state-level estate taxes. To read the full article in Next Avenue, click: Five Questions to Ask Your Estate Planner After the New Tax Law.
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Some of the most disruptive business models that the world has ever known have succeeded through the use of cross-subsidies—the act of giving away for free something that consumers were previously paying for. To read the full article in FinancialPlanning, click: Fee Disruption is Coming.
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FASB issued technical corrections and improvements to its financial instruments standard on recognition and measurement of financial assets and liabilities that was originally issued in 2016. To read the full article in the Journal of Accountancy, click: FASB Issues Technical Corrections to Financial Instruments Standard.
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To a Key Employee—Part II of II In this second part, the author provides readers an illustration of the decision-making and allocation issues. These include issuing options, phantom stock, and converting the existing entity. Read Part I here.
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Healthcare Reimbursement Environment, Part II of VI In the January/February 2018 issue of The Value Examiner, the author provides readers with an overview of the U.S. healthcare reimbursement system and details the due diligence process as it relates to reimbursement. This brief article is an excerpt, which is part of the series on healthcare reimbursement, where the author provides more in-depth explanation of the due diligence process.
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Some planners are adding language to grantor trusts that allows trustees to pay taxes directly or to reimburse grantors. This can dissuade grantors from turning off grantor trust status entirely, but there are certain IRS rules to consider. To read the full article in WealthManagement, click: Where are all the Grantor Trust Reimbursement Statutes?
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Alexa, can you be my financial planner? Artificial intelligence is getting more sophisticated, but where does that leave the professionals? I asked that question of my new device, a birthday present from my son. The answer? “I don’t know that.” But for how long? Just as other industries have been disrupted by technological advancement, so, too, will the financial industry. To read the full article in FinancialPlanning, click: Alexa, Can You be My Financial Planner?
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Wells Fargo has put an end to a well-publicized fight with a former retail bank manager who blew the whistle on its sham-accounts scheme that ultimately affected 3.5 million Americans. Both sides say they reached a settlement this month, though its terms are confidential. The agreement signals a possible shift in legal strategy for Wells as it appears to be the first instance in which the bank has voluntarily ended one of its lengthy fights with any of the whistleblowers it fired after they spoke up about the creation of fake accounts. To read the full article in FinancialPlanning, click:…
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Remaster the Employee Mindset The author discusses ways to engage staff and develop the inner-entrepreneurial spirit.
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To a Key Employee—Part I of II The author encourages, as a starting point, owners of a closely held company to consider numerous issues with regard to the compensation of key employees. If the closely held company operations are successful, valuable and long-term employees sometimes seek to be compensated through an equity ownership in the company. This key employee desire for equity ownership has practical implications as well as taxation implications. From the practical perspective, the founding owners assumed the business risks and financial risks of starting the closely held company. Accordingly, the founding owners understandably feel that they are…
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How does the current performance of U.S. stocks compare to the long-run historic average? Since the stock market is essentially a vote by millions of investors on future cash flows of companies, growing faster than average would indicate that, at least on this dimension, Trump is delivering on his promise to “make America great again.” (American companies, that is.) To read the full article in FinancialPlanning, click: Trump vs. Obama: Who Had Best 1st Year Stock Market Gains?
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According to a National Bureau of Economic Research (NBER) working paper, older persons today appear more likely to enter retirement in debt than in past decades. Researchers examined older individuals’ debt patterns using the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). With the HRS, they compared cohorts of people on the verge of retirement (ages 56 to 61) as well as people slightly older (ages 62 to 66). To read the full article in PlanAdviser, click: Debt Causing Financial Vulnerability for Pre-Retirees.
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Since 2007, the Medicare Modernization Act of 2003 has required high-income Medicare enrollees to pay an Income-Related Monthly Adjustment Amount surcharge, or IRMAA, on their Medicare Part B premiums. This lifts the premium from covering just 25% of costs up to as high as 80% of results, and increased Part B premiums by as much as 219% in 2017 alone. To read the full article in FinancialPlanning, click: The Value of Medicare Surtax Planning.
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Refocus and Prioritize The author contends that almost every business owner or manager is an absentee owner or manager, regardless the amount of time they spend at their business.
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While valuation may generally be part art and part science, rebutting and/or defending a valuation introduces additional types of art and science. The stakes are often higher because interested parties are affected by the contested valuation’s outcome, and the narrative can become more nuanced due to conflicting views on a variety of issues. This article endeavors to cut through the clutter and provide practical tips to address some common themes that arise in rebutting and/or defending a valuation report in a contested situation.