News About IRS And Tax: January 2018

Wednesday 31 January 2018

6 Reasons it Pays to File Your Taxes Early

As the saying goes, “the early bird gets the worm.” Or is it the tax refund? Well, whether you file early or you are a tax procrastinator, you still may get a tax refund, but here are six reasons it...

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source https://blog.turbotax.intuit.com/tax-refunds/6-reasons-it-pays-to-file-your-taxes-early-19100/

Timing Tax Savings With Deduction Lumping And Charitable Clumping

Most taxpayers are eager to claim any and all tax deductions that they can, yet the reality is that with the newly expanded Standard Deduction under the Tax Cuts and Jobs Act (TCJA) of 2017, as many as 90% of households will no longer itemized deductions at all… which effectively means many tax deductions that were recently popular, from state and local income and property taxes, to mortgage interest, and even charitable contributions, may actually be worthless in the future.

For those who are at least close to the threshold where itemized deductions exceed the Standard Deduction, though, it may be appealing to deliberately time and “lump together” available itemized deductions (e.g., shifting the timing of state estimated tax payments, and property taxes where permitted), or even clump charitable contributions into a donor-advised fund, such that the combined lumped-and-clumped deductions do exceed the Standard Deduction… at least every few years.

Ironically, those who already have substantial itemized tax deductions – especially including the mortgage interest deduction – may already have more than enough deductions to pursue such strategies. And with the new $10,000 cap on SALT (State And Local Tax) deductions, many households will struggle to itemize at all (especially married couples). Nonetheless, for some, the opportunity to lump and clump deductions together – especially for those that have other (appreciated) assets available to front-load charitable contributions into a donor-advised fund (and save on capital gains taxes in the process – can produce a material tax savings in the future!

Tuesday 30 January 2018

#FASuccess Ep 057: Marketing Your Way To $1B Of AUM In 10 Years With E-Books And Radio Shows with Ted Jenkins

Welcome, everyone! Welcome to the 57th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Ted Jenkin. Ted is the co-founder of oXYGen Financial, a wealth management advisory firm under Kestra that manages nearly $1 billion of client assets.

What’s unique about Ted, though, is that his firm is focused almost entirely on serving Gen X and Gen Y clients – thus the “XYGen” part of the oXYGen Financial name – and gets paid through a combination of AUM fees, a small portion of insurance implementation commissions, and a $99 per month “technology fee” that they charge their clients for their own personal financial management dashboard… which is provided by aggregating their accounts through eMoney Advisor.

In this episode, Ted shares how oXYGen Financial grew from scratch to over 1,500 hundred clients over the past 10 years since it was founded, how the firm executes its digital marketing strategies by producing a high volume of “e-books” – some as short as 1 or 2 pages – that they offer online prospects in exchange for their email address and phone number, the way oXYGen Financial drives visitors to its website by getting visibility on “not-advisor-traditional” radio shows like sports programs, and the way the firm follows up with those prospects who contact them online.

In addition, we also talk in depth about oXYGen’s actual four-meeting financial planning process with clients, that starts with an Initial Client Meeting which talks clients through a “Key Money Concerns” checklist the firm created, to a Data Gathering meeting that the financial advisor themselves doesn’t even sit in, followed by a Plan Presentation meeting that oXYGen frames as a “Strategy Session” to talk about potential planning strategies to implement, and then wraps up with an actual implementation meeting that includes transferring assets for oXYGen to manage.

And be certain to listen to the end, where Ted talks about the challenges he went through in leaving a 17-year career as a Vice-President-level manager at a major broker-dealer to go out on his own with his business partner Kile Lewis, how he plowed money into marketing in the first year to not just get clients but set the groundwork for building the oXYGen Financial brand, and how he focused on building relationships with other local small business owners in the Atlanta area to grow the firm.

So whether you are interested in learning more about reaching prospective clients online through e-books, curious how you can grow your business through radio shows, or simply want to learn more about how you can profitably serve Gen X and Gen Y clients, I hope you enjoy this episode of the Financial Advisor Success podcast!

Monday 29 January 2018

E-File is Now Open: Why You Should File your Taxes Early

Today, January 29, the IRS officially kicked off the opening of the 2018 tax season and is now accepting e-filed tax returns. As we all know, some taxpayers wait until last minute to file their taxes, but if you stop...

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source https://blog.turbotax.intuit.com/tax-news/e-file-is-now-open-why-you-should-file-your-taxes-early-21087/

Second Public Comment Letter To CFP Board On Revised CFP Professional Standards Of Conduct

Over 2 years ago, the CFP Board began its process to updated the Standards of Professional Conduct for all CFP certificants, for the first time since the last set of changes took effect in the middle of 2008. And after an initially proposed last June, followed by a public comment period, the CFP Board issued a second revised proposal in December, for which a second (and likely final) public comment period is now open.

In today’s article, I am publishing in full my own second public comment letter to the CFP Board. As you will see, I remain supportive of the CFP Board’s direction with the new standards, which is to expand the fiduciary standard to all CFP professionals at all times (and not “just” when doing financial planning or material elements of financial planning, as in the past).

However, the recent revisions to the proposed Standards of Conduct did introduce a number of new concerns for CFP professionals, while also failing to resolve some of the problems of the original proposal. Of greatest note is the fact that the revised proposal effectively creates two forms of advice from CFP professionals – financial planning advice, and non-financial-planning financial advice – which are both subject to a fiduciary standard, but have different disclosure requirements, and will be evaluated by different Practice Standards. Which means CFP professionals will be able to routinely avoid being held accountable to following the CFP Practice Standards by not giving financial planning advice, even as the CFP Board’s own Public Awareness campaign continues to advocate “for financial planning, work with a CERTIFIED FINANCIAL PLANNER professional”.

Also notable in the revised proposal for the new Standards of Conduct is what still hasn’t been resolved, including the fact that “reasonableness” is used as a key term to determine whether a CFP professional is guilty of wrongdoing a whopping 28 times (even though the CFP Board has no formal mechanism to issue Guidance, and raising the legitimate concern that such terms will only be defined after the fact through enforcement), serious gaps or outright conflicts for CFP professionals who are switching from fee-only to commission-and-fee compensation or back the other way, and a serious gap in the definition of what constitutes a “financial planning engagement” that could legitimately subject an advisor’s cocktail party conversations to a fiduciary standard.

Ultimately, I remain hopeful that the CFP Board will move forward with its proposed changes to the Standards of Professional Conduct, which represent a positive step forward for the financial planning profession. But only after the remaining issues are given serious consideration, particularly with respect to the unintended consequences of murky definitions of what triggers a fiduciary engagement, fulfilling the CFP Board’s Public Awareness campaign promise that “for financial planning, [consumers should] work with a CERTIFIED FINANCIAL PLANNER professional” (which already presumes that CFP professionals will be doing financial planning!), and developing a framework to provide ongoing guidance to interpret and clarify a large number of key definitions so CFP professionals don’t have to learn through the process of rulemaking by enforcement. Especially given the CFP Board’s strategic priority of Accountability!

In any event, I hope that you find this (second) public comment letter to be helpful food for thought, and that if you haven’t yet, you submit your own Public Comment letter to the CFP Board by emailing Comments@CFPBoard.org – the deadline is this Friday (February 2^nd)!

Friday 26 January 2018

Happy Earned Income Tax Credit Awareness Day! Are You Eligible?

Today is National Earned Income Tax Credit Awareness Day! The Earned Income Tax Credit (EITC) is a huge benefit to taxpayers with low to moderate income and has helped lift millions of people out of poverty. To determine if you...

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source https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/happy-earned-income-tax-credit-awareness-day-are-you-eligible-18892/

Weekend Reading for Financial Planners (January 27-28)

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that the battle over the CFP Board’s expanded fiduciary standard is heating up, with both SIFMA and FSI (lobbying firms for broker-dealers) calling for the CFP Board to postpone their fiduciary proposal until at least next year to see what the SEC does, and the CFP Board responding that it still intends to move forward (and putting to rest the criticism that CFP Board is solely beholden to its large-firm broker-dealer stakeholders).

Also in the news this week is the announcement that administration of the Broker Protocol is being shifted to a new law firm called Capital Forensics (after complaints arose that the prior law firm Bressler Amery & Ross sat on the news that Morgan Stanley was leaving the protocol and failed to communicate it to the other protocol participants in a timely manner), and a look at how despite the de-regulatory agenda of President Trump the financial advisory industry is facing a slew of new and additional regulatory activity in the coming year from both the SEC and FINRA (not to mention what is already underway with the Department of Labor’s fiduciary rule).

From there, we have a series of practice management articles this week, including: a look at some of the new additions on Form ADV that will be required in the coming weeks as firms do their annual updates; the regulatory and compliance issues to consider when hiring non-advisor employees (who still must be overseen by the firm); why fiduciary compliance does not actually require advisors to always use the absolute lowest cost solution for clients; the rise of the “quasi-independent” model of breakaway brokers who join existing independent RIAs that provide solutions to the advisors who often become partners of the firms; the various Millennial archetypes (beyond the increasingly popular “HENRYs”) that financial advisors should consider working with; and how to think about developing a special treatment program to deepen your relationship with your top clients (and what we can learn from the airline industries about how to provide differentiated service to your most valuable clients/customers).

We wrap up with three interesting articles, all around the theme saving and spending habits: the first looks at how, in a world of retargeting ads and email marketing, often the best way to save and buy less is simply… to buy less in the first place (which keeps you from being signed up for all those lists in the first place, and helps you get more comfortable in simply enjoying what you already have); the second is a look at how sometimes the best strategy to succeed is simply by using brute force, which can apply to everything from investing (don’t try to pick stocks, and instead just own all of them with an index fund) to accumulating for retirement (if your savings rate is aggressive enough, it hardly matters what you actually generate in investment returns!); and the last is an interesting exploration into what is worth spending a little more money on, particularly for those who may be financially successful (or fully financially independent) precisely because they lived a lifetime of frugality… and now can’t find out how to flip the switch and actually try to enjoy the money they have!

Enjoy the “light” reading!

Thursday 25 January 2018

How Advisors Pay For #FinTech And Why It Matters: Cost Of Revenue Vs Overhead

Most advisory firms that do “wealth management” – some combination of financial planning and investment management – will have three core technology platforms they use: portfolio accounting software to track the investment portfolios, financial planning software to build the financial plans, and CRM software so you can just keep track of all the clients. And this software will come with a cost, but one thing that’s interesting about financial advisor #FinTech, is how much (or how little) we are willing to pay for different types of software.

In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we examine how financial advisors pay for different types of technology, why these dynamics influence how much we are willing to pay for software, and what this means for the future of financial advisor #FinTech!

As a starting point, just consider how much this software costs for a typical advisor to use. CRM software in our industry is typically about $500 to $1,000 a year. Financial planning software is a little more expensive, with packages like MoneyGuidePro or RightCapital at about $1,000 to $1,500 a year (and some, like eMoney Advisor, are a bit more expensive at over $3,500 per year). Portfolio accounting solutions, though, are typically the most expensive at all, with costs like $40 to $70 dollars per year per account, which means 80 clients who each have an average of 3 accounts leaves the advisor paying about $10,000 to $15,000 per year. Which raises the question: why the huge discrepancy, and why are advisors willing to pay so much more for some software solutions that others? Or stated more simply, why isn’t there a $15,000/year financial planning software solution, as there is for portfolio accounting software?

We can gain some insight by looking at the typical financials of an advisory firm. The classic advisor’s Profit and Loss statement reduces gross revenue by both Direct Expenses (the costs it takes to actually get the revenue in the door and service it, such as client-facing advisors), and Overhead Expenses (e.g., administrative staff, rent, E&O insurance, and technology) to arrive at the bottom line: Net Profits. In essence, there are two primary “categories” of expenses here, direct expenses that produce the revenue, and overhead expenses that support the operation of the business, like admin staff and office space and technology.

The reason this distinction matters is that typically, we will pay a lot more for direct expenses than we will for overhead expenses, precisely because the cost tends to produce more revenue and it “pays for itself” over time. Yet while advisor technology is typically classified as an overhead expense of the business, but it’s not actually always the way we think about the costs when we decide what to buy. After all, for advisors running the typical assets under management model, the reality is that portfolio accounting software isn’t really just an overhead expense, but more of a direct expense, because advisors need portfolio accounting software to validate their AUM fees. By contrast, even for firms that do rigorous financial planning as part of their AUM fee, the planning software isn’t a core requirement for generating that AUM fee. It’s still good to do good planning work, but you can do good planning work more profitably by reducing the cost of this overhead expense! Thus, we’ll pay 10 times the cost for portfolio accounting software than financial planning software because, when we run an AUM model, we think of portfolio accounting software as something that drives revenue, while financial planning software is just a cost to be managed. And pay accordingly.

In fact, if you extend this line of thought further, it actually becomes clearer why and how it is that even within existing advisor technology categories, some software providers charge a lot more than others. For instance, while financial planning software is typically an “overhead cost to be managed”, MoneyGuidePro costs about $100 a month while eMoney Advisor costs over $300 a month. Both are good financial planning software packages, but what eMoney Advisor does have, that MoneyGuidePro does not, is its client portal. And it matters, because when clients link all their accounts to the portal and engage with the portal, they tend to be “stickier” clients, who are less likely to leave, and therefore the firm has a higher retention rate and keeps more revenue. Thus why eMoney Advisor charges triple the fee of MoneyGuidePro… and similarly why Riskalyze charges nearly double the price of FinaMetrica… because that is what happens when software is positioned as a revenue driver (that can be used for business development and revenue growth and retention), instead of an overhead cost!

And the other reason why all of this matters is the implications for the future of advisor technology. As more and more advisors converge on the AUM model, it’s getting very competitive to gather new assets, and it’s driving advisory firms to focus more and more on financial planning to differentiate themselves (or even become their primary revenue model). And as investment management shifts to the background as a “supporting service” that financial planners offer, there’s going to be immense pressure on portfolio accounting software solutions to bring their costs down, as they get shifted from a revenue-driving software to an overhead expense to be managed. At the same time, if we are primarily in the business of doing financial planning and financial planning fees are driving our revenue, then we will also pay a lot more for financial planning software as a revenue driver. And if advisors were will to pay $15,000 per year for financial planning software, how awesome could that financial planning software be!?

The bottom line, though, is just to recognize that it is the ability of software to drive revenue that makes us willing to pay so much more for some software than others. And with the coming divide between advisor technology for planning-centric firms and investment-centric firms, we’re going to see a shift as increasingly financial-planning-centric firms that typically treated planning software as an overhead expense to be managed begin to treat it as a direct expense to generate revenue, while simultaneously beginning to cut back on portfolio management expenses (including portfolio accounting software). Which may mean some big changes for the future of advisor technology, as it is exciting to think about what some software types could look like if advisors were willing to pay 10X more than the tools they currently use!

Wednesday 24 January 2018

Can I File Exempt & Still Get a Tax Refund?

The IRS issues tax refunds when you pay more tax during the year than you actually owe. When you file exempt with your employer for federal tax withholding, you do not make any tax payments during the year. Without paying tax, you do not qualify for a tax refund unless you qualify to claim a refundable tax credit.

source https://blog.turbotax.intuit.com/tax-refunds/can-i-file-exempt-still-get-a-tax-refund-6695/

TurboTax Offers Free Filing for Military E1- E5

Continuing this tax season, TurboTax will still be offering the expansive military discount to all US active duty military and reservists. The Details For service members in ranks E-1 to E-5, you can file both your federal and state taxes...

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source https://blog.turbotax.intuit.com/turbotax-news/turbotax-offers-free-filing-for-military-e1-e5-18831/

Can I Claim My Girlfriend or Boyfriend as a Dependent?

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next...

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source https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/can-i-claim-my-girlfriend-or-boyfriend-as-a-dependent-21025/

Do Losses Truly Loom Larger Than Gains?

Loss aversion—the idea that losses hurt more than gains feel good—is one of the most well-known insights of behavioral economics. Originally developed by Daniel Kahneman and Amos Tversky in the late 1970s as a component of “prospect theory”, loss aversion has since come to be seen as the driving force behind a wide range of phenomena such as the endowment effect, status quo bias, the disposition effect, and even the equity risk premium. However, a new article forthcoming in the Journal of Consumer Psychology makes the provocative claim that despite widespread belief to the contrary, losses are not actually more impactful than gains as a general psychological principle.

In this guest post, Dr. Derek Tharp – a Kitces.com Researcher, and a recent Ph.D. graduate from the financial planning program at Kansas State University – takes a deep dive into this provocative paper… examining the evidence on why losses may not truly loom larger than gains, and why it may be better to look at loss aversion as a concept that applies (only) in some specific circumstances.

In their forthcoming paper, researchers David Gal of the University of Illinois at Chicago and Derek Rucker of Northwestern University examine the history of loss aversion research, beginning with Kahneman and Tversky’s seminal paper and growing into one of the most widely accepted ideas in social science. Developed out of a need to address anomalies which could not be addressed by expected utility theory, Kahneman and Tversky provided a clever explanation for why loss aversion could result in people being risk averse when evaluating gains and risk seeking when evaluating losses. However, based on Gal and Rucker’s review of the research that has emerged since the development of prospect theory, as well as some of their own research which has attempted to isolate the effects of loss aversion relative to alternative explanations, the authors conclude that loss aversion has been greatly overgeneralized. Instead of being a general psychological principle, loss aversion appears to apply more or less based on the specific circumstances of a given situation, and it cannot be said that losses simply loom larger than gains.

As a result, financial planners should be careful not to assume that loss aversion applies in situations in which it may not. From career considerations to portfolio management strategies and even retirement income planning… clients may not actually be as loss-avoiding as we once believed, and the research suggests there really are situations where they may prefer to seek gains than to simply minimize risk of loss. Some more nuanced perspectives related to perceptions of losses and gains also provide potential insight for financial planners relevant to topics ranging from clients chasing gains to the ways in which financial planners sell and package their services. But ultimately, the key is to acknowledge that, despite conventional wisdom, losses may not truly loom larger than gains!

Tuesday 23 January 2018

What is the Capital Gains Tax?

The IRS deems all taxable income as one of two types: ordinary and capital gain. Here is an overview the difference between ordinary and capital gains, and a basic introduction to capital gains.

source https://blog.turbotax.intuit.com/taxes-101/what-is-the-capital-gains-tax-4094/

#FASuccess Ep 056: The Opportunities In Providing Hourly As-Needed Financial Advice For The Middle Market with Sheryl Garrett

Welcome, everyone! Welcome to the 56th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Sheryl Garrett. Sheryl is the founder of the Garrett Planning Network, a financial advisor support network for fee-only RIAs with a focus on bringing financial planning to the middle market by making it available on an hourly, as-needed basis.

What’s unique about Sheryl, though, is that what started out as a very unique business model in the late 1990s turned out to be so popular, that it attracted other financial advisors to her to emulate the model… and as a result, what started out as something Sheryl wanted to do for her own clients turned into a network of several hundred advisors all delivering the same hourly model in their own local markets.

In this episode, Sheryl shares her own path through the financial planning industry, how she struggled early on in a broker-dealer that required her to cold call and sell products, how she dropped her FINRA licenses and shifted to an early fee-only RIA, then picked her FINRA licenses back UP a second time for another broker-dealer firm, only to drop them again by transitioning once more into the fee-only channel for good… albeit by becoming a partner in a new fee-only RIA, only to quickly discover that the partnership wasn’t going to work, which is what ultimately led her to finally start a firm of her own, a full 10+ years into her career.

In addition, Sheryl shares what it took for her to finally launch the Garrett Planning Network, what she’s learned about the success and challenges of the hourly model for financial planning, why referrals from other advisors can actually be one of the best ways to build an hourly practice, how – just as with other advisory firm models – many hourly planners build lifestyle practices, while some endeavor to grow larger businesses, and how one of the appeals of the hourly model for her is that it kept her focused on trying to be as efficient as possible with her clients to help them manage their cost of advice.

And be certain to listen to the end, where Sheryl talks about the value of organizations like the Garrett Planning Network, where it’s great to have the advisor support services… but in the end, the most powerful effect is simply finding a community of fellow advisors, pursuing a similar business model with a similar clientele, from whom you can learn, and with whom you can share best practices. Whatever your target clientele and business model happen to be.

So whether you are interested in learning more about the Garrett Planning Network, curious how you can grow your business by generating referrals from other financial advisors, or simply want to learn more about the hourly financial planning business model, I hope you enjoy this episode of the Financial Advisor Success podcast!

Monday 22 January 2018

AdvicePay And The Automation Of Billing Financial Planning Fees (Without Custody)

In recent years, the rise of the robo-advisor has driven a realization amongst most financial advisors that it’s absolutely essential to provide value beyond “just” portfolio management itself to attract and retain clients. This surge of interest in delivering financial planning is driving the growth of CFP certification to record levels (now more than 80,000!), but is also causing many financial advisors to question the entire AUM business model altogether; after all, if the future is all about getting paid for financial planning and not investment management, then will consumers eventually compel advisors to move away from the AUM model and towards fee-for-service financial planning?

Yet the caveat of this transition is that there’s an incredible operational efficiency to charging AUM fees. They’re straightforward to calculate, the infrastructure already exists to sweep fees from investment accounts and remit them to advisors, and the AUM fee is psychologically easier for clients because it happens automatically on their behalf. By contrast, charging directly for financial planning requires managing invoices, collecting and cashing physical checks, and a process to collect for late/missed payments. And from the client’s perspective, writing lots of checks for fees often just makes clients more fee-sensitive.

To address this challenge, we’re excited to announce the launch of AdvicePay, a new payment processing platform for financial advisors specifically created to facilitate fee-for-service financial planning fees (both one-time and especially recurring retainers). Because the reality is that while there are already a lot of other payment processing platforms out there, from PayPal to PaySimple, to the Quickbooks Merchant account, most don’t even meet the compliance requirements of state regulators to avoid custody and provide proper notifications to clients, some prohibit financial advisors from using them at all, and none are built to integrate with the existing systems of financial planners (nor do they appear to have any intention to ever do so!)!

Yet after registering a few hundred independent RIAs with state regulators in just the past 2 years alone at XY Planning Network, we’ve learned exactly what regulators really expect and are looking for to ensure consumers are appropriately protected, especially when it comes to charging ongoing recurring retainer fees. And while we originally built AdvicePay simply to solve this problem just for XY Planning Network, we’ve realized that with the entire advisory industry shifting towards financial planning – leading to a growing demand for a payment processing system to handle all those fee-for-service payments – there is an opportunity to help even more financial planners, and more consumers who want to work with them. Especially given how many people might need financial planning, and would be willing to pay for it, but don’t even have liquid investment assets to manage – and need a way to pay for financial planning directly from a bank account or credit card.

As a result, we’ve spent the past several months expanding the capabilities of AdvicePay to handle the wider needs of the financial advisor community, raised $500,000 of venture capital funds to support further development, and are excited today to be rolling out AdvicePay to the entire financial services industry… so anyone who wants to build a fee-for-service financial planning business will now have the tools to do so (in a compliant manner!).

In the long run, we’re not certain if financial planning fees will simply become a supplement to the AUM model, replace it entirely (where advisors charge for financial planning, and give away asset management for free!), or branch out further into its own path as a means of serving new consumer segments who can’t be served by AUM fees alone. But we’re excited to see what AdvicePay can do to help support the ongoing growth of the financial planning profession!

Saturday 20 January 2018

How Will Tax Reform Affect My Refund Next Year?

We know that you work hard for your money and often a tax refund may be the biggest check you get all year, so we’re here to let you know how the new tax reform legislation may affect your tax...

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source https://blog.turbotax.intuit.com/tax-reform/how-will-tax-reform-affect-my-refund-next-year-33055/

11 DAYS to the Self Assessment Tax Return Deadline!

11 days until the self-assessment tax return deadline

[As at 20 January]: There are just 11 days left in which to file your Self Assessment tax return with HMRC. Miss the deadline (11.59pm on 31st January 2018) and you'll straight away be in for a £100 fine from HRMC, so don't delay — contact Taxfile this morning or early next week to book an appointment with one of our helpful tax advisors and accountancy experts. We'll make filling in and filing your tax return a breeze and what's more, we're currently open 6 DAYS A WEEK from now until the end of January (Saturday mornings by appointment only). Don't leave it to the last minute, though, as there is always a bottleneck for those who do — so come in as early as you can this week. It doesn’t matter if you have zero tax to pay – you still need to submit your tax return on time! You also need to have paid HMRC any tax due for the 2016-17 financial year by the same 31 January deadline. So get our professional help with filing of your tax return — you can book an appointment online, drop by the Tulse Hill shop to book one, send us an email message via our contact form or, better still, simply call us on 0208 761 8000 and we'll book you in and help sort out your tax return accurately and on time. Don't delay — time is quickly slipping by and if you leave it too late you'll be caught in the last minute bottleneck!

source http://www.taxfile.co.uk/2018/01/11-days-to-self-assessment-deadline/

Friday 19 January 2018

Weekend Reading for Financial Planners (January 20-21)

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the fascinating letter that Blackrock CEO Larry Fink sent to business leaders, stating that they must make a positive contribution to society (in addition to delivering financial performance) to command Blackrock’s interest (as the world’s largest institutional investor)… and raising the question of whether SRI/ESG investing is about to make the shift from niche to mainstream (which, ironically, eliminate any potential performance differential for such strategies as they literally become the market!).

Also in the news this week was the first-time-ever release of a FINRA budget, that (finally) sheds some light on how the organization collects revenue and spends its resources… and recognizes that it must be “right-sized” with fewer staff and lower costs to be sustainable in the face of a shrinking base of broker-dealers. And the U.S. Supreme Court has granted certiorari to hear the case of Ray Lucia v. SEC, which may strike down the SEC’s current process of selecting its administrative law judges as being unconstitutional (and force the SEC to adopt a more independent and better-reviewed appointment process, instead).

From there, we have several articles on retirement planning and research, including a look at how not to split an IRA in a divorce (and why it’s essential to split an IRA after the divorce decree is finalized), why so-called “cash buffer” or “cash bucketing” strategies don’t actually improve retirement income sustainability (and can actually harm it), and how the availability of reverse mortgages may change the 4% rule (taking an initial withdrawal rate equal to 1/25th of the available retirement assets) into a Rule of 30 (taking a 3.33% initial withdrawal rate against the combined value of the retirement portfolios and equity in the home, using a reverse mortgage line of credit to tap the equity in the future if/when/as needed).

We also have a few articles on financial advisor marketing strategies, including a reminder that the best way to get fresh new marketing ideas is not to ask other advisors what works but to ask your target clientele instead, a look at how to refine what your firm delivers to clients to truly create a differentiating client experience (beyond “just” trying to deliver better client service), and a great way of thinking about differentiating as a financial advisor by being capable of delivering something that other advisors either can’t, or don’t deliver themselves (though in the long run, a can’t differentiator may be more sustainable).

We wrap up with three interesting articles, all around the theme of personal growth and development in an evolving business or career path: the first looks at why personal progress is all about continuously taking ourselves out of our personal comfort zone (because in the end, “if you want something in life that you have never had, you will have to do something that you have never done”); the second explores the “four elements of entrepreneurship”, recognizing that it’s more about the mental attitude of being willing to make decisions and attempt new things in the face of uncertainty than any particular skill or ability; and the last delves even further into the steps that successful advisors (and especially advisory firm founders) must take to avoid becoming the bottleneck in their own businesses as they grow.

Enjoy the “light” reading!

Thursday 18 January 2018

The Coming Golden Age Of The (Focused) Solo Financial Advisor

With an ever-growing wave of mergers and acquisitions, and industry consolidation, amongst both broker-dealers and RIAs, there is an increasingly common view that the solo financial advisor is “doomed” in the coming years. Whether due to the burdens of managing the firm, meeting the rising volume of fiduciary compliance obligations, handling increasingly complex investment or insurance solutions, or just doing all the financial planning work… the presumption is that all together it will simply become “unmanageable” – or at least impossible to do in a cost-effective manner – for the typical solo financial advisor in the future. Thus requiring solo advisors to either be acquired, or at least be “tucked in” to larger firms, in order to access their resources and have better economies of scale. Yet the reality is that “the death of the solo financial advisor” has been forecasted for nearly two decades now, and in the meantime solo financial advisors have actually become more profitable than ever!

In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we take a deeper dive into the current state of the solo advisor, why it’s actually becoming easier to be a successful independent solo financial advisor, and why the coming decade is more likely to be the GOLDEN AGE of solo financial advisors than the death of them!

As a starting point, it is helpful to pause and reflect on the current state of solo financial advisors as they exist today, nearly 20 years after Mark Hurley famously issued his 1999 report forecasting the death of the solo advisor. Because the current industry benchmarking studies reveal some striking trends, including that the best solo financial advisors take home as much hard-dollar cash compensation as the typical partner in a billion dollar advisory firm! In fact, the top solo advisors are keeping in their pocket as much as 70 to nearly 90 cents of every dollar of revenue that they generate, after accounting for all expenses (technology, office space, staff, etc.). In hard dollar terms, the typical standout solo advisor is netting almost $600,000 per year in take-home profits, on $700,000 to $800,000 of total revenue. So to put it mildly, solo advisory firms are not exactly struggling and dying in today’s marketplace! And while these figures are based on about the top 25% of solo firms – so clearly not all solo advisors are doing this well – even the average solo advisor can do very well on much lower levels of revenue with the potential for a 60% to 80% profit margin!

Accordingly, even if costs rise substantially (say, another 10% on overhead), solo advisors would still have ample profit margins to absorb the impact, and top solo advisors could still be taking home nearly half a million dollars a year in take-home pay. Even an advisor generating “just” $250,0000 in gross revenue and running a 60% profit margin would still be taking home $150,000, which is still almost 3 times the median household income in the U.S. Simply put, there’s a lot of room to succeed as a solo advisor, even if costs rise.

Furthermore, it’s really not even clear if we should expect costs to rise for solo advisors in the future, as the reality is that the cost of what it takes to operate an advisory firm today compared to 20 years ago has been reduced tremendously, due to technology. Tools that make it more efficient to be a solo financial advisor – scheduling software, rebalancing software, tax updates built into powerful planning software rather than proprietary spreadsheets, account aggregation tools that automatically update financial plans, etc. – have all reduced the costs of being a solo financial advisor, in terms of both time and money. And while 20 to 30 years ago the “best” technology was at the wirehouse firms that had the resources to develop them, today almost all of the best solutions are provided by independent technology firms, and accessible for the average solo financial advisor (because the independent technology provider can achieve economies of scale, which transfers down to the individual advisor using the software!).

With all this being said, I don’t want to be insensitive to the plight of many of today’s solo financial advisors today who are not running 60% (or 80%-plus) profit margins, and are not taking home half a million dollars or more in compensation from their firms. For many solo advisory firms, there is often a complaint with growth that “the business isn’t scaling”, which is typically code for “this isn’t getting any easier as my firm gets bigger, so when are all of these efficiencies coming along?” But the real struggles for solo advisory firms, particularly once they cross about 50 clients, aren’t actually the result of being too small to survive, but instead are a result of not having enough focus. Because the reality is that it is time intensive and hard to scale if each client you serve is different and you don’t have a clear target market where you can create a consistent solution. But that means the key to success isn’t more size and staff and growth… it’s finding better focus. Otherwise, growing bigger just makes the problem worse, because you add even more inefficient clients and then throw staff and money at the problem, which doesn’t actually make it more efficient, and just makes you miserable because now you have to manage more and more staff on top of your inefficient business!

However, it’s important to recognize that there is one real challenge that solo advisory firms do face in the future: the marketing challenge of getting new clients, and differentiating yourself, given the coming (and even current) landscape of advisory firms. Because while there was a time where just being a comprehensive financial planner was a sufficient differentiator, but that is no longer the case. Solo advisors have to compete with over 80,000 other CFP certificants now, and every major broker-dealer has been making a big push into financial planning for years. And while it is true that solo financial advisors can often still go deeper than those firms, and have more relevant expertise, and be more specialized…. unfortunately, few solo advisors are. Many are still just generalist financial planners. And there is a problem with trying to outmarket a firm that’s 100 or a 1,000 times your size, or even larger, when all you do is the same generalist financial planning advice that they do. Which means focusing and specializing into a niche helps both your client service efficiency and your marketing!

The bottom line, though, is just to recognize that not only is the solo financial advisor not dying… and I’d argue that there’s never been a better time to become a solo advisor, thanks to the rise of the internet and all this amazing technology that allows us to be solo advisors and leverage that technology at a fraction of the cost of traditional staff members. However, the fact that you can be more efficient than ever as a solo won’t help in the future if you can’t differentiate yourself. But when you get all that right, as the benchmarking studies have shown already, solo financial advisors can make an incredible income (sometimes not even working full time!)! Which means being a solo financial advisor can still be amazing… at least, once you have focus!

W-4 Withholding and Tax Reform

On December 22, the President signed the tax reform bill into law, but it’s important to keep in mind that for most people, the bill does not affect their taxes for 2017 (the ones they file in 2018). As you are sitting...

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source https://blog.turbotax.intuit.com/tax-reform/w-4-withholding-and-tax-reform-33053/

Wednesday 17 January 2018

Sweepstakes: Your #TaxHero Is Ready When You Need It

Tax refund season is here, and it’s time to start filing! Whether you’re a hardcore do-it-yourselfer or first time filer, DIY tax filing doesn’t mean you’re alone. With TurboTax Live™, you can take advantage of a nationwide virtual network of...

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source https://blog.turbotax.intuit.com/tax-news/your-taxhero-is-ready-when-you-need-it-25570/

Acquisition And Home Equity Mortgage Interest Tax Deductibility After TCJA

The “American Dream” has long included the opportunity to own your own home, which the Federal government incentivizes and partially subsidizes by offering a tax deduction for mortgage interest. To the extent that the taxpayer itemizes their deductions – for which the mortgage interest deduction itself often pushes them over the line to itemize – the mortgage interest is deductible as well.

Since the Tax Reform Act of 1986, the mortgage deduction had a limit of only deducting the interest on the first $1,000,000 of debt principal that was used to acquire, build, or substantially improve the primary residence (and was secured by that residence). Interest on any additional mortgage debt, or debt proceeds that were used for any other purpose, was only deductible for the next $100,000 of debt principal (and not deductible at all for AMT purposes).

Under the Tax Cuts and Jobs Act of 2017, though, the debt limit on deductibility for acquisition indebtedness is reduced to just $750,000 (albeit grandfathered for existing mortgages under the old higher $1M limit), and interest on home equity indebtedness is no longer deductible at all starting in 2018.

Notably, though, the determination of what is “acquisition indebtedness” – which remains deductible in 2018 and beyond – is based not on how the loan is structured or what the bank (or mortgage servicer) calls it, but how the mortgage proceeds were actually used. To the extent they were used to acquire, build, or substantially improve the primary residence that secures the loan, it is acquisition indebtedness – even in the form of a HELOC or home equity loan. On the other hand, even a “traditional” 30-year mortgage may not be fully deductible interest if it is a cash-out refinance and the cashed out portion was used for other purposes.

Unfortunately, the existing Form 1098 reporting does not even track how much is acquisition indebtedness versus not – despite the fact that only acquisition mortgage debt is now deductible. Nonetheless, taxpayers are still responsible for determining how much is (and isn’t) deductible for tax purposes. Which means actually tracking (and keeping records of) how mortgage proceeds are/were used when the borrowing occurred, and how the remaining principal has been amortized with principal payments over time!

Tuesday 16 January 2018

Your Personal Tax Prep Checklist – Check Off These Documents Before Starting Your Taxes

If you are eager to file your taxes, either because you’re due a tax refund or you just want to get it out of the way, the IRS has announced they will be accepting paper and electronic returns starting Monday,...

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source https://blog.turbotax.intuit.com/tax-planning-2/your-personal-tax-prep-checklist-check-off-these-documents-before-starting-your-taxes-32999/

#FASuccess Ep 055: Separating Management From Ownership On The Path To $10B of AUM with Tim Kochis

Welcome, everyone! Welcome to the 55th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Tim Kochis. Tim is the co-founder of Aspiriant, one of the first independent RIAs to have reached $1 billion in assets under management in the early 2000s, that today is one of the advisory industry’s few independent RIAs focused on comprehensive wealth management to have reached a whopping $10 billion of AUM.

What’s fascinating about Tim is the way that he was able to attract and retain great talent as his firm grew, by distributing ownership equity of the firm early on… a philosophy that Aspiriant has retained by now having over 50 partners that participate in the firm’s equity ownership.

In this episode, Tim shares how he was able to grow so quickly to become one of the leading RIAs (with a niche focus on working with corporate executives), the way he differentiated his firm and gained credibility even without having a big corporate name on his business card, how he deepened his reach in his niche by co-authoring multiple books on tax strategies for managing executive compensation and concentrated stock positions, the reason why Aspiriant chose from early on to charge separately for investment management and financial planning, and how the firm structured its lengthy and comprehensive financial plans with a shorter Executive Summary up front and a deep Appendix of Technical Memoranda in the back… with all the technical information.

In addition, we talk in depth about how Aspiriant separated ownership from management of the firm, the management infrastructure it used to operate, why Tim and his partners ultimately decided to merge the firm with another large RIA after already reaching $2.5 billion of AUM, and how he navigated his own exit as the firm’s CEO (even though he still retains an ongoing ownership stake).

And be certain to listen to the end, where Tim discusses some of the insights he’s gleaned over the years in how to successfully execute a succession plan, and the work he’s now doing with leading industry consultants Philip Palaveev and David DeVoe on succession planning and developing the next generation for advisory firm leaders.

So whether you have been curious about ways you can establish credibility through a niche without a big corporate brand name, how to best structure a succession plan within your own firm, or are simply curious to learn more about the growth path of a multibillion dollar RIA, I hope you enjoy this episode of the Financial Advisor Success podcast!

Monday 15 January 2018

Self-Employed? Don’t Forget About the Estimated Tax Deadline

If you’ve taken the plunge into self-employment, congrats on being your own boss! Whether you’re working as a contractor or making money in the fast-growing sharing economy, don’t forget you may need to pay estimated taxes. The upcoming fourth quarter...

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source https://blog.turbotax.intuit.com/self-employed/self-employed-dont-forget-about-the-estimated-tax-deadline-19852/

Comparing The Best Digital Advice “Robo-Advisor” Platforms For RIAs

As robo-advisor platforms have increasingly pivoted from direct-to-consumer offerings to business-to-business offerings instead, financial advisors have had many new “robo-advisor-for-advisors” platforms to choose from. The appeal of these “digital advice” support platforms is the potential to expedite the onboarding process for clients – especially less affluent clients where the advisor can’t necessarily afford to take as much time to work with the client directly – where the technology helps with everything from risk profiling to efficiently handle the administrative tasks of account opening. And increasingly, these advisor FinTech companies are actually trying to expand into full-scale end-to-end wealth management offerings. Yet ironically, as more and more digital advice platforms build out their capabilities, it’s increasingly difficult to simply keep track of the varying list of feature and integrations.

In this guest post, Craig Iskowitz, CEO and founder of Ezra Group (a management consulting firm providing advice to the financial services industry on marketing and technology strategy) and Natalia Autenrieth of Autenrieth Advantage (a coaching practice that provides financial advisors with strategic and practice management advice), share their thoughts on the best “robo-advisor-for-advisors” platforms for RIAs available, reviewing popular players like AdvisorEngine, Oranj, RobustWealth, Jemstep, and Riskalyze regarding everything from features and integrations, to the client experience, pricing, and more!

Notably, as these modern digital advice solutions become more and more capable, they’re also beginning to shift from technology tools to assist with “just” an advisor’s smaller clients, to platforms that are capable of supporting the full range of an advisor’s clientele. After all, even “traditional” financial planning clients continue to have increasingly higher expectations with respect to the online experience their financial advisor provides… which in turn is expanding beyond just having a seamless digital experience for opening and managing accounts, and into areas such as proactive communication and tracking of financial planning progress.

So whether you have been wanting to look into your options for utilizing a robo-advisor-for-advisors platform, are currently using a solution and want to ensure that it’s still the right platform for your firm, or are simply interested in staying on top of this rapidly expanding area of advisor FinTech… I hope that you find this guest post from Craig and Natalia to be helpful!

Friday 12 January 2018

Four Changes to Make This Year to Buy Your Dream Home

The new year has just started and many people are looking ahead at what goals they want to knock out this year and beyond. One big goal many people have in mind for 2018 is purchasing a new house. Buying...

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source https://blog.turbotax.intuit.com/income-and-investments/four-changes-to-make-this-year-to-buy-your-dream-home-32996/

Weekend Reading for Financial Planners (January 13-14)

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that during the lull of the delayed Department of Labor fiduciary rule, the SEC is proactively working on its own version, and a first proposal could be released as soon as the second quarter of 2018. In fact, in anticipation of the coming rule, the CFA Institute has submitted a somewhat controversial comment letter suggesting that as the SEC proceeds, the best solution may not be to just harmonize with a uniform fiduciary rule for all broker-dealers and RIAs, but instead to focus more on the titles that advisors use and simply require those who hold out as such to be registered as investment advisers (and be subject to a fiduciary rule under current law!).

At the same time, this week’s news also included newly proposed legislation in New Jersey, that would require brokers who are not fiduciaries to clearly and explicitly disclosure that they are not and have no obligation to act in their clients’ best interests, as delays in a national fiduciary rule are leading to a growing momentum for states to take up the fiduciary slack in their stead. And the Wall Street Journal also published an investigative report about how even at discount brokerage firms like Schwab, Fidelity, and TD Ameritrade, which are known for not using commission-based brokers, that their Financial Consultants are still receiving bonus incentives on top of their salaries that introduce problematic conflicts of interest in their recommendations (further supporting the need for a fiduciary rule).

From there, we have a slew of advisor technology articles this week, including: a new cybersecurity platform initiative in the advisory industry called cleverDome; why financial advisors should be concerned about the recent news of computer chip vulnerabilities Meltdown and Spectre (and another reason/reminder of why it’s so important to promptly patch your computer with software updates!); how “robo” tools are coming to life insurance now, both streamlining the process of applying for insurance, and even the time it takes to underwrite the coverage (as algorithms and data feeds begin to replace requests for paper medical records and human underwriters); a favorable review of Advyzon (which provides a combined CRM and portfolio accounting/reporting tool for investment advisers); and a look at some of the financial data startups that are trying to compete with Bloomberg in the independent financial advisor community (including YCharts and Sentieo).

We wrap up with three interesting articles, all around the theme of time management and personal productivity: the first looks at what the research tells us about the most (and least) productive times of day for decision-making or creative work; the second provides a fascinating look at how our struggles with time management may simply be a modern-world iteration of the age-old philosophical question about how to find better focus and meaning in our lives; and the last is a simple but effective technique to help avoid distracting “opportunities” that may come along in your business… just provide a quote that is drastically higher than your usual prices, and let the prospective client either say no (but then it was their decision, not yours), or perhaps even yes (and properly pay you for the off-focus work, giving you dollars you can then re-deploy more productively in the business!).

Enjoy the “light” reading!

Thursday 11 January 2018

The Unhappiest Successful Advisors: Accidental Business Owners

As we enter the new year, many advisors will be thinking about ways they can improve their business in 2018. Yet one of the more interesting trends that I have been seeing lately is the rise of advisory firms where the biggest challenge is not the success and growth of the business… but that the advisory firm owners themselves are unhappy, or downright miserable. This seems to particularly occur within the RIA community, and especially amongst those firms managing between approximately $100 million and $300 million of AUM… a subcategory of firms I call “accidental business owners”. Because the source of their stress is that they may have built successful and profitable businesses – and now find themselves responsible for managing it – despite the fact that they never actually intended to build a firm that they would have to spend so much time managing in the first place!

In this week’s #OfficeHours with @MichaelKitces, my Tuesday 1PM EST broadcast via Periscope, we discuss what is causing so many advisory firms to become accidental business owners, why they occur in the first place, the problem with being an accidental business owner, and what financial advisors can do if they find themselves in this situation to become happier (and regain control of their lives).

To understand the phenomenon of the accidental business owner, it’s important to first point out that the word “business owner” is being used in a very specific way. We often talk about advisory firms as being “businesses”, but there’s a distinction between true “businesses”, and advisory firm practices. The difference is that a practice is built around an individual advisor. The practice is you, and while you may have a staff member or two, it’s primarily about the services you provide to clients. By contrast, an advisory firm business – a true business – goes beyond just you as the founder advisor. There are other advisors, who manage clients, and who are responsible for helping to bring in new revenue. Historically, almost all financial advisors were salespeople, and most salespeople simply have practices – as evidenced by the fact that if the advisor-salesperson did not go out and selling new insurance or investment products, income dropped precipitously and the business would die. But with the rise of the AUM model, and phenomenally high retention rates amongst advisory firms, advisors began being able to accrue clients over time and actually build large and scalable businesses – businesses that truly needed to hire other advisors to come in and manage relationships – often even without trying to do so. The clients just accrued until the point that it was a business. Thus, they became “accidental” business owners.

But the fundamental problem that crops up for those financial advisors who become accidental business owners is that the job of running an advisory business is different than the job of being a successful advisory practice. A successful practice as a financial advisor is all about your ability to effectively service your own clients. By contrast, running a successful advisory business requires you to be in the role of teaching and training other financial advisors to be good at business development, financial planning, servicing clients, and managing relationships (in addition to managing the firm, hiring staff, making technology decisions, and actually being a leader of the firm). Which means if the primary reason you started your firm in the first place was because you like to be a financial advisor, and give people advice, and help them, and have those client relationships… then being an advisory firm business owner is going to be pretty miserable, because you don’t get to do any of that stuff anymore. Which ultimately tends to occur as firms grow to around $100 to $300 million in AUM, because this is the point at which an advisor (or a small team of 2-3 advisors) truly crosses the threshold where they are at capacity and have to add more advisors and other employees and start to scale their practice up to a business.

So with all this being said, if you do find yourself in the position of being one of those unhappy accidental business owners, what should you do about it? The key is to acknowledge that is that there is effectively a fork in the road. The path on the left is to embrace your new role as a business owner. You may not have set out to do it, but here you are, and this is your opportunity to grow, to learn something new, and to do this well. You may recognize that you need help, but that’s OK. If you’re a more visionary type, and you can see what needs to be built, but you’re really not the good manager to build and integrate it all together, then make the reinvestment to hire a Chief Operating Officer to be your right hand for implementation.

On the other hand, the path to the right is to go back to being a successful solo advisory practice again. This is by far the more painful path for most of us. Because it basically means downsizing the firm and the number of clients you serve, which to many can feel like “failure”. Except it turns out that it may be the single fastest step to actually make you happy again in your business. Because, due to the 80/20 rule, many or even most advisors can maintain their current take-home pay by scaling back to (just) their top 20% of clients while freeing up additional expenses and a lot of time and effort.

But the bottom line is that as you get started here in the new year, take a good long look at what you’ve built. Is it a practice, or a business? And more importantly, what do you want it to be. Do you really want to build a business, and make the reinvestments – financial, time, effort, and learning new skills – that it takes to lead the business? Or do you really just want to run a successful practice, make good money, and regain control of your time? Either path is truly okay, but you have to decide what you want to build towards. And if you’ve found yourself accidentally going down the “wrong” path – you’re an accidental business owner that doesn’t really want to be anymore – recognize that going back to a lifestyle practice is an acceptable answer, and it may be the path that truly leads to greater happiness!

Wednesday 10 January 2018

Managing The “Theater” Of A Financial Planning Meeting

For financial advisors who pride ourselves on the quality of the advice we provide to clients, it can sometimes be easy to lose sight of the importance of the more physical elements of our business that seem qualitatively irrelevant to the value of the guidance and recommendations we give to clients. However, as a tremendous amount of psychological research suggests, we should be careful not to overlook the more “theatrical” elements of a financial planning meeting – from the clothes we wear and the way we present information to clients, to the design and set up of our office – as the “theater” of financial planning actually does influence our clients, and their ability to implement our advice in a meaningful manner.

In this guest post, Dr. Derek Tharp – a Kitces.com Researcher, and a recent Ph.D. graduate from the financial planning program at Kansas State University – examines why it is important to both acknowledge and manage the theater of financial planning, particularly given the ways in which clients and prospective clients utilize the signals we as advisors send (both consciously and unconsciously) to decide everything from whom to hire, to what financial recommendations they should implement (or not!).

It is widely acknowledged that effective communication is an important aspect of what financial advisors do. However, something that is less commonly appreciated is the role that our environment plays in facilitating that communication. In his book, Suggestible You, Erik Vance examines the ways in which our suggestible minds are influenced by the stories we hear and the environments we hear those stories in. In particular, Vance examines the “theater of medicine”, and its surprisingly powerful role in shaping the perceptions and beliefs of patients, which can, in turn, influence their physical health and well-being as well!

Additionally, the physical spaces we occupy (such as our office) can actually say a lot about us. Though laboratory research in financial planning is still very young, and scholars are only beginning to delve into how the offices of financial advisors can optimally be designed, some research from other fields has found that our physical environments can actually say even more about our personalities than some commonly used tools and assessments. At the heart of this are ways in which our personality manifests in certain behaviors which leave physical evidence within our environments that is really hard to fake – from mementos we collect and things intentionally place out for others to see, to more subtle clues such as the way we dress and organize things on our desk.

Ultimately, financial advisors have many options for trying to better manage the theater of financial planning… from sending signals of our conscientiousness through our clothing (e.g., formal dress) and communication style (e.g., controlled posture and calm speech), to signals of our competence through education and professional designations (e.g., CFP certification), and even signaling our knowledge of and solidarity with niche communities that we service… there are many ways in which we can seek to manage the “theater” of our financial planning to help our clients adopt and implement wise financial planning practices!

Tuesday 9 January 2018

See Where You Truly Stand Financially with Turbo

Ever wonder where you truly stand financially? Sure, you can get your credit score, but that is only part of the picture…not a holistic view of your financial health. That’s why we’ve created Turbo, a free (yes, free!) financial health...

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source https://blog.turbotax.intuit.com/announcements/see-where-you-truly-stand-financially-with-turbo-32956/

#FASuccess Ep 054: Lessons Of An Advisory Firm Merger And Launching Your Own Advisor FinTech Company with Greg Friedman

Welcome, everyone! Welcome to the 54th episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Greg Friedman. Greg is the co-founder of Private Ocean, an independent RIA in northern California that manages nearly $1.2B of assets under management for 450 households, with a combination of both investment management and financial planning services.

What’s unique about Greg, though, is that in addition to leading a billion-dollar advisory firm that he founded over 25 years ago, he also developed his own CRM system to better manage all the workflows for his financial planning clients… which he eventually made available to other advisory firms as well, in the form of the software we now know as Junxure CRM.

In this episode, Greg talks about how Private Ocean got its initial traction with a niche Center of Influence in the California Tire Dealers Association – just to emphasize that any niche can work when you build connections to the key Centers of Influence – how the firm is structured today with lead and associate advisors, how compensation is set for the firm’s lead advisors, and why Private Ocean has decided to charge only AUM fees despite having such a deep focus on its financial planning work with clients.

In addition, we talk in depth about the real-world challenges that cropped up when Greg decided to merge his successful advisory firm with a larger one 7 years ago, to become the successor CEO of the combined organization when the other firm’s founder retired, how Greg is able to manage his software company along with his advisory firm and how he handles his time, the guiding philosophy that he uses to stay focused across all of his businesses, and why Greg thinks it’s so crucial to have an Executive Coach.

And be certain to listen to the end, where we include a small additional “bonus” interview – because ironically, in the short time between when we originally recorded this podcast, and when it went live, Greg actually sold Junxure to AdvisorEngine. So we gather some of his thoughts about what makes you want to sell a company you built. Especially when you’re not ready to retire yet.

So whether you have been curious about how to build your business by leveraging a niche, the unique opportunities for advisory firms that develop and eventually sell their own software, or curious about the real world challenges that come with merging a successful advisory firm into a larger one, I hope you enjoy this episode of the Financial Advisor Success podcast!

Monday 8 January 2018

Announcing CPA CE Credits And Other 2018 Updates To The Nerd’s Eye View!

Running a successful business requires continual reinvestment… which is why, every year, we survey our Nerd’s Eye View readership to find out what we could be doing to deliver more value to you, and/or to make the reader experience even better. And so, as 2018 kicks off, I wanted to share a little perspective on the current State Of The Blog, and some of our plans for the upcoming year.

Overall, this past 2017 was another big year of growth for Kitces.com. Our total site traffic was up nearly 25% over 2016 – which at our size, means the blog grew more last year than it did in the first 6 years cumulatively. Our new Financial Advisor Success podcast has quickly become the most highly reviewed podcast for financial advisors on iTunes, and finished its first year just shy of 1,000,000 advisor downloads. And our team expanded, with the promotion of Rachel Zeller to Operations Manager, and the hire of Derek Tharp (who just successfully defended his dissertation and is now Dr. Derek!).

These new hires gave us additional capacity to begin a process of major reinvestments into the Kitces.com platform itself, and the services that we provide to our readers. Which means we’re have a number of exciting announcements to make!

First and foremost, the Nerd’s Eye View blog is now providing CPE credits for CPAs, in addition to the CE credit we already provide for CFP certificants and IMCA members with the CIMA or CPWA designations in our Members Section! In fact, Kitces.com has joined the NASBA Registry of CPE Providers – a significant national recognition for the quality of our CE content and instructional design – in addition to becoming a CFP Board CE Quality Partner. To our knowledge, we’re one of less than half a dozen CE providers for financial advisors in the entire country to have been recognized by both organizations, as we continue to reinvest into the quality of the content we provide.

Second, we’re beginning the process of a major technology overhaul in our back-end systems used to run the blog itself. The primary purpose of these changes are to make it feasible for us to better customize the reader experience for you – from sharing more relevant article suggestions, to removing prompts to sign up for our updates when you’re already a subscriber (which is a surprisingly difficult technology challenge to implement!), and giving you more flexibility to select which email updates you receive (e.g., the ability to exclude certain content categories that may not be of interest to you). You’ll see these changes roll out incrementally throughout 2018. We also plan to leverage these new tools to conduct more survey research of financial advisors, on key practice management topics that aren’t being sufficiently studied elsewhere.

Third, the growth of the Nerd’s Eye View means we’re hiring again! A new Research Associate position is currently listed in our Career Opportunities section, and we’ll be hiring a “Director of Digital Engagement” to help us roll out our customized content enhancements later this year. So if you know anyone who might be interested, please send them our way!

In the meantime, we’ll also have more opportunities in 2018 for Guest Posts, and another year of the Financial Advisor Success podcast means 52 new podcast guest opportunities as well! If you’re interested, please reach out directly via our Contact page to let us know!

Friday 5 January 2018

Weekend Reading for Financial Planners (January 6-7)

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the news that both New York and California are now working on plans to convert their no-longer-fully-deductible state income taxes into either a higher state payroll tax, or an option to making a “charitable” contribution to a state fund instead (where the state would offer a dollar-for-dollar credit against taxes, and as a charitable contribution it would remain deductible for Federal tax purposes). Also in the news is the announcement that Citigroup is also leaving the Broker Protocol, but that even as the Protocol unravels, FINRA still doesn’t believe there’s any reason for the organization to get involved even as the number of temporary restraining orders and arbitrations by wirehouses against former brokers begins to rise.

From there, we have a number of retirement-related articles this week, including a research study that finds what appears to be a significant increase in male mortality rates immediately after early retirement (at age 62), another study showing that mortality rates are rising and that life expectancies in retirement may be starting to shrink (especially as prospective retirees struggle to save and retire later, although ironically shorter retirement time horizons may mean retirees need less to retire than they once believed), a look at all the different types of senior housing arrangements that are emerging as the mass wave of Baby Boomers decide how they want to live in retirement, and why the key to helping retirees be happy may be less about maximizing their retirement portfolios and more about minimizing their regrets in retirement.

We also have several articles on practice management and career development, from tips on how to better navigate your career in an existing advisory firm, to best practices in how to find a mentor, and why truly being a professional financial advisor is about more than just being financially successful but actually committed to being a bona fide professional.

We wrap up with three interesting articles, all around the theme of (non-traditional approaches to) New Year’s resolutions and improving your business and life in 2018: the first explores what it takes to have a truly impactful New Year’s resolution for your advisory firm (hint: it’s about actually establishing a better infrastructure for the firm to be successful); the second explores how it may be better to set goals on how you will allocate and use your time rather than just setting business goals for revenue or growth; and the last looks at how the perennial New Year’s resolution of trying to be more productive may just be a mental trap, because the real issue is not figuring out how to be more productive to achieve your goals, but taking a fresh look at why you’re pursuing them and whether you’re even pursuing the goals that will actually make you happier in the long run!

Enjoy the “light” reading, and hope you had a Happy New Year!

IRS Announces E-file Open Day! Be the First In Line for Your Tax Refund

The IRS announced today that it will begin processing tax returns on 1/31/14. The good news for you? TurboTax is open for business and will begin accepting tax returns on January 2, 2014!

source https://blog.turbotax.intuit.com/tax-news/irs-announces-e-file-open-day-be-the-first-in-line-for-your-tax-refund-15822/