Start Your Succession Plan Decades in Advance Engaging in a decades-long succession-planning process can ensure that clients are taken care of and a practice continues to thrive after its founder retires. Recruiting young advisers can bring new ideas to your practice and help keep it going. Mike Lockwood, representative of Lincoln Financial Advisors Corp., explains. To read the full article in Wealth & Management, click: Succession Planning is Not About You. It’s About Your Clients.
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In August 2016, Pfizer announced it would acquire Medivation for $14 billion. The transaction made headlines for how the size of the deal escalated over a period of approximately six months prior to the announcement. In Part I of this series, Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, presented a broad outline of the PFE-MDVN transaction. Part II will delve more into the transaction to present some high-level observations around allocation of the purchase price. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Allocating Purchase Price for a Pharma Transaction—Pfizer Acquires Medivation…
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The Psychological Reasons Why People Fail to Save “Present bias”—the concept that people would rather have a smaller sum of money now than a larger sum of money in the future—is one cognitive bias that keeps people from saving, according to a new paper. Another problem is “exponential-growth bias,” which refers to a failure to understand compound interest. Derek Thompson, senior editor at The Atlantic, explains. To read the full article in the The Atlantic, click: The Two Biases that Keep People from Saving Money.
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“Most important, pensions should be required to uphold their original intent: to keep retirees who can no longer support themselves out of poverty.” Industry leaders weigh in on retirement news your clients may be thinking about. To read the full article in FinancialPlanning, click: How to Save Public Pensions, no Federal Bailout Needed: Retirement Scan.
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In August 2016, Pfizer announced it would acquire Medivation for $14 billion. The transaction made headlines for how the size of the deal escalated over a period of approximately six months prior to the announcement. Sujan Rajbhandary, senior member of Mercer Capital’s Financial Reporting Valuation Group, presents in this blog post (and Part II) a broad outline of the transaction and explore what a potential purchase price allocation would look like. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Allocating Purchase Price for a Pharma Transaction—Pfizer Acquires Medivation (Part I). This article is republished from Mercer…
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Looking Beyond the 401(k) to Save for Retirement If proposals to curb the size of individual retirement accounts and 401(k)s take effect, clients with large IRAs and 401(k)s will need to consider alternate methods of saving for retirement. Darla Mercado, Personal Finance Writer, discusses a few options including, deferred compensation plans, health savings accounts, and after-tax contributions to 401(k)s. To read the full article in the CNBC click: Big IRAs and 401(k)s are at Risk: Where Else to Save?
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Startup Ecosystems Allow Entrepreneurs to Help One Another Almost all of the more than 360 major metropolitan areas in the U.S. have an ecosystem in which startups support one another through funding and other types of assistance, according to the Kauffman Foundation. These networks may help entrepreneurs receive psychological and social support as well as monetary backing. John F. Wasik of The New York Times, explains. To read the full article in The New York Times, click: An Ecosystem Where Start-Ups Help Other Start-Ups
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It is clear that the DOT/IRS are attempting, through Proposed Changes to Section 2704 of the Internal Revenue Code, to eliminate minority interest discounts and marketability discounts (DLOMs), even though those terms are not mentioned at all. To address the valuation side of things, Chris Mercer, founder and CEO of Mercer Capital, wrote a whitepaper outlining his thinking on valuation implications in some detail. To read the full article and download the whitepaper on Chris Mercer’s blogsite, click: Valuation Implications of the Proposed Changes to Section 2704: Good News or Bad News? Maybe Not so Bad. This article is republished…
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When Employees Ask for Promotions Before They’re Ready Eager, ambitious employees sometimes ask for promotions or raises before they are ready. Rebecca Knight discuses that managers should handle these requests with transparency and should coach their employees to help them reach the next level. To read the full article in the Harvard Business Review, click: What to Do When Your Employee Asks for a Raise Too Soon.
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Life Insurance Loan Can Have Tax Consequences When life insurance is surrendered or lapses, its remaining value is used to repay any loans that have been taken out on the policy—a situation that can create unexpectedly large tax bills, as the taxable gain on the policy is calculated without considering the presence of the loan. Michael Kitces explains that clients can avoid this “tax bomb” by holding on to a policy until death. To read the full article in Nerd’s Eye View, click: How Lapsing a Life Insurance Policy With a Loan Can Cause a Tax Bomb.
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Corporate finance does not need to be a mystery, states Travis Harms, Mercer Capital’s Financial Reporting Valuation Group lead. The goal of this whitepaper is to give directors and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions, allowing them to bring their perspectives and expertise to the discussion. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Corporate Finance in 30 Minutes. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Recognize and Gain the Competitive Advantage Firms in the accounting and financial consulting arena tend to have more commonalities with each other than differences. In many cases, their services, processes, and even benefits are essentially the same. Fortunately, there is a proven way for your firm to develop a strong differentiation strategy—and it is based on the expertise your people already have. In this article, Dr. Frederiksen discusses how expertise can be used to develop and maintain a competitive advantage.
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No matter what your fees are, there’s always the worry that you’re either too expensive and giving up work, or too cheap and leaving money on the table. Ingrid Case explains how these four questions can help you determine whether to give yourself a cut—or a raise. To read the full article in FinancialPlanning, click: Should I…Raise my Fees?
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Federal Agencies Plan Amendments to Form 5500 Employee benefit plans would face new reporting requirements under extensive changes to Form 5500, Annual Return/Report of Employee Benefit Plan, proposed by the federal government last month. The federal agencies are also proposing to require all group health plans to file Form 5500 along with a new Schedule J. Sally P. Schreiber, Tax Adviser senior editor, explains. To read the full article in The Tax Adviser, click: Agencies Propose Amendments to Employee Benefit Plan Reporting.
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Wall Street generally does not like MOEs unless the benefits are utterly obvious and/or one or both parties had no other path to create shareholder value. In some instances, MOEs may be an intermediate step to a larger transaction that unlocks value. Jeff Davis, managing director of Mercer Capital’s Financial Institutions Group, explains. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Fairness Considerations for Mergers of Equals. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Many Americans Suffer From Financial Anxiety Americans are becoming steadily more worried about their finances, and 85% of those participating in a recent Northwestern Mutual study said they are experiencing some kind of financial anxiety, explains Sean Williams. About two-thirds of those surveyed said the problem has reached the point that anxiety is hurting their health. To read the full article in The Motley Fool, click: The 13 Biggest Financial Fears of Americans.
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Worker Classification in the Gig Economy With one-third or more of Americans working as freelancers, the traditional factors for classifying workers as employees or independent contractors are becoming obsolete. Here’s what tax practitioners need to know about changing employment relationships in the gig economy. To read the full article in The Tax Adviser, click: Worker Classification and the Evolving Service Delivery Model.
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Part 1 of this series offered an overview of observed transaction premium data (from the 2016 Mergerstat Review) for acquisitions of public companies. That post also deliberated on one of five common avenues to incremental economic benefits that motivate market participants to transact. Part 2 walks through the four remaining variations on the incremental economic benefits theme, and offers some concluding thoughts on how to incorporate this sort of analysis into fair value measurements. Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, explains the analyses and discusses his views. To read the full article in Mercer Capital’s Financial…
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What’s the Best Way to Manage Big Data? Companies disagree about whether chief financial officers, chief information officers or other individuals should be in charge of big data analysis, according to a report by Mu Sigma. Forty-four percent of respondents say they use a centralized approach to big data management, but some companies use an individual or federated model. James Bourne explains. To read the full article in CloudTech, click: Who Should be in Charge of Big Data Analytics: the CIO, CFO, or a Specialist?
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Retired CPAs Share Retirement Advice The transition into retirement can be challenging for CPAs who have grown accustomed to the daily routine and demands associated with the accounting profession. Maria L. Murphy, freelance writer, discusses seven tips from accountants who have successfully transitioned for making the most of life after work. To read the full article in the Journal of Accountancy, click: Retirement Tips from Retired CPAs.