News About IRS And Tax

Friday, 29 March 2019

What Does an IPO Mean for Employee Taxes?

As you’ve probably seen, there’s a wave of tech companies with hotly anticipated Initial Public Offering (IPO) announcements expected this year which could have the effect of creating thousands of millionaires overnight and countless more who’ll see their financial situation...

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source https://blog.turbotax.intuit.com/income-and-investments/401k-ira-stocks/what-does-an-ipo-mean-for-employee-taxes-30159/

Weekend Reading for Financial Planners (Mar 30-31)

Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with the big news that Charles Schwab is launching a new financial-planning-for-a-monthly-subscription-fee solution as a new “Premium” version of its Schwab Intelligent Portfolios solution, providing full access to a CFP professional for ongoing financial planning advice, and accelerating consumer awareness of the new and increasingly popular financial advisor business model (particularly for ‘next generation’ clients who are willing to pay for financial advice but don’t have investment accounts large enough to merit a financially viable AUM relationship).

Also in the news this week was an announcement that FINRA is considering whether to modify or even just consolidate its suitability rule once Regulation Best Interest comes out, noting the similarity and overlap between the two… and ironically showing, by FINRA’s willingness to consolidate the suitability rule into Regulation Best Interest, that Reg BI apparently really isn’t a material improvement or change to broker-dealer standards in the first place (or it would be deemed ‘too disruptive’ to the industry to even try to consolidate the standards!).

From there, we have a number of articles around practice management, and specifically how to attract and retain top talent, including one article looking at the rise of “student loan repayment” as a popular new employee benefits to attract young talent, a second highlighting that more flexible paid time off (or flex time in general) is also an increasingly popular perk, best practices in how to structure interviews for prospective hires, and a fascinating look at how digital-media-savvy Ritholtz Wealth Management has been able to leverage its blog and social media presence to attract good advisors to the firm.

There are also several investment-related articles, from a look at the potential recessionary implications of the recent inversion of the yield curve (from the researcher who first pioneered the study showing how inverted yield curves can foreshadow recessions), to a new BlackRock study suggesting that there might not actually be an “illiquidity premium” after all (but that there is a premium for complexity and more challenging due diligence and governance in private markets that also often happen to be illiquid), and a discussion of how structured products are once again making a resurgence, not to the levels they peaked at in 2007, but driven this time around not only by investors who may be nervous about markets and want more downside protection, but also a number of new technology platforms that are trying to make it easier for advisors to shop more efficiently for structure note solutions in the first place.

We wrap up with three interesting articles, all around the theme of how to be more efficient and effective when running meetings: the first looks at some of the scientific research studies on how to run better meetings (along with a study that shows the leader of the meeting is not actually very good at judging the quality of their own meeting!); the second provides some tips about how to carve out or break up meetings that may have gotten “too big” (as invitee-lists tend to expand over time!); and the third provides a series of detailed tips on how to not just make meetings more efficient, but to literally make them more effective, from how the meeting itself is run to be inclusive of all participants, to more carefully considering the invitee-list to the meeting, and simply being especially cognizant of why the meeting is being called, its ultimate purpose, and whether it really needs to happen in the first place (or if another medium, from email to company intranet, would be better to accomplish the same meeting goal).

Enjoy the “light” reading!

3 Tools Every Self-Employed Business Owner Should Start With

Congratulations on recently starting your own business! By now making daily decisions that affect the business may seem routine, but we know that with every decision, you’re trying to make the business a success. You may feel like most of...

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source https://blog.turbotax.intuit.com/self-employed/3-tools-every-self-employed-business-owner-should-start-with-43394/

Thursday, 28 March 2019

Kitces & Carl Ep 04: Does Social Media Really Matter For Financial Advisors

Despite the recent public scrutiny of various social media platforms, the number of active users on mediums like Twitter, Facebook, LinkedIn, and Instagram continues to grow exponentially, making social media an increasingly attractive channel for financial advisors to not only reach prospective clients and centers of influence, but to nurture relationships with existing clients as well. Yet, it’s also incredibly easy to spend a lot of time (and potentially money) on social media, only to find that your efforts have been for naught, leading many to wonder if social media really matters for financial advisors at all.

In our fourth episode of “Kitces & Carl”, Michael Kitces and financial advisor communication guru Carl Richards sit down to discuss the question of the extent to which financial advisors should or “have to” participate in social media (or not), why it might be a worthwhile endeavor if done correctly, some ideas that advisors can use immediately to get more out of their social media efforts, and why, ultimately, using social media successfully is ultimately about a series of “micro interactions” to better connect with other individuals.

The first question to consider is whether or not it’s absolutely essential for financial advisors to build a social media presence to begin with. As while there are numerous stories of advisors landing multi-million-dollar clients solely through social media, the reality is that the only non-negotiable virtual presence that every advisor must have is a modern, professional-looking website (not a social media account). Because, in a world where consumers are far savvier and more informed than they’ve ever been, the one thing you can count on is that a prospective client will have done their due diligence on you before they decide to book that first meeting, and there’s no better way to throw ice water on a warm prospect than an outdated website… or one that prominently features a sailboat, lighthouse, or long, winding road tapering off towards the horizon, that doesn’t really connect with prospects today.

Beyond that, though, for financial advisors, the task of getting in front of prospective clients has always been primarily a social endeavor, and at its core, social media is an avenue for humans to communicate and interact with each other. Which means that social media can not only augment and amplify how you present yourself to the public, but it can be a particularly effective means of connecting with others… especially if you have yet to crack the code of networking events or other organized social activities. In other words, whether face-to-face or through “the interwebs”, authentic communication is the best pathway for developing relationships, and social media is simply one of many channels to do so.

And when it comes to social media, a side benefit is that even those you’re not interacting with can see how you communicate with others, and can form their own opinions about you and decide whether or not they want to learn more about you and your services. Because one of the most powerful aspects of developing a social media presence is that it allows you to reach a much larger audience than would be possible by concentrating solely on in-person events. Moreover, social media can also open avenues of access to centers of influence and other people in your target market that you might not have access to otherwise.

Ultimately, though, the key point is to recognize that developing a quality social media presence takes time. There are no overnight successes, and you won’t miraculously have a line of people who want to hire you banging on your door because you sent out a tweet or few, but (as is the case when helping clients build their own solid financial foundations) small actions taken repeatedly can still lead to massive changes. Or stated more simply: repeated authentic interactions compound over time, whether in-person or via social media. In other words, regardless of the way in which you make it happen, in the end, communicating authentically with others is the most reliable and effective way for any financial advisor to build a successful practice. Social media just happens to be a particularly efficient channel to do so. At least for some advisors.

Wednesday, 27 March 2019

Financial Planning Research Highlights From The 2019 CFP Board Academic Research Colloquium

From February 19th through February 21st, the CFP Board’s Center for Financial Planning hosted their third annual Academic Research Colloquium (ARC) for Financial Planning and Related Disciplines in Arlington, VA. This year’s event saw a 20% increase in attendance, bringing together roughly 230 attendees, of which about 35 were practitioners, to share and discuss research relevant to the financial planning profession, as a part of the CFP Board Center’s longer-term goal of establishing itself as the “academic home” for the financial planning profession.

In this guest post, Derek Tharp – lead researcher at Kitces.com, and an assistant professor of finance at the University of Southern Maine – provides a recap of the 2019 CFP Academic Research Colloquium, and highlights a few particular research studies with relevant takeaways for financial planning practitioners.

The 2019 CFP Academic Research Colloquium again had a strong showing from CFP Board-Registered Ph.D. programs, with scholars from Missouri, Texas Tech, Georgia, and Kansas State producing nearly 32% of all research (when weighted by type of presentation and authorship rank). Additionally, Ohio State, Alabama, and the College for Financial Planning contributed another 13% of total research. Despite the concentration among top programs, the ARC remains an academically diverse event, drawing in scholars from a total of 69 institutions, including Harvard, Wharton, and Stanford.

The colloquium featured a wide breadth of topics. Some particularly relevant themes for financial planning practitioners included a number of studies on financial psychology of both clients and practitioners, including measuring brain activity during financial conversations to determine whether planning or emotional areas of the brain were activated during financial conversations, examining the tools that do (and do not) work for measuring risk-taking behavior, assessing perceptions of success and satisfaction among female advisors, and identifying gaps between perceptions of both financial planning graduates and employers regarding student preparedness for a career in financial planning. In addition, there was research on the impact advisors may have on clients- both good and bad – including differences in financial decision-making among households that use a financial planner versus a transactional advisor, the use of municipal bonds among advisor-assisted investors, and the characteristics of those who report being victims of investment fraud.

Overall, the third Academic Research Colloquium again brought together a strong mix of academics and practitioners to present and discuss financial planning research. However, some considerable challenges and opportunities going forward include continuing to develop Financial Planning Review into a high-impact journal, dealing with (potentially) declining institutional and sponsorship support, and the Center’s general push to continue to establish the ARC as the “academic home” of financial planning. Only time will tell if the Center for Financial Planning will be successful in their pursuit, but the ARC continues to be a conference worthy of attending for both academics and practitioners who wish to engage in academic research.

Tuesday, 26 March 2019

#FASuccess Ep 117: Forming A Specialized Advice Process To Add Real Value In Serving Small Business Owners. with Josh Patrick

Welcome back to the 11tth episode of Financial Advisor Success Podcast!

Welcome, everyone. Welcome to the 117th episode of the “Financial Advisor Success” podcast. My guest on today’s podcast is Josh Patrick. Josh is the founder of Stage 2 Planning, an independent RIA in Burlington, Vermont that specializes in working with small business owners.

What’s unique about Josh, though, is the way he’s been able to leverage his own personal experiences as a small business owner, before transitioning into financial planning as a second career, to create a deeply specialized advice process for small business owners and command retainer fees in excess of $50,000 a year from his clients.

In this episode, we talk in depth about exactly what Josh does to earn monthly retainer fees of $4,000 to $5,000 per month from small business owners, the 5 core areas that he advises them on, including setting clear values and culture, becoming operationally irrelevant in your business, learning how to really delegate effectively, how to set up effective business systems, and how to divide up the profit of the business into cash flows for lifestyle, emergency funds, business growth, and a retirement plan, and the way he’s made his expertise known through a combination of blogging, podcasting, and public speaking to create a steady flow of small business owners who seek him out and are willing to pay his fees for the value they perceive.

We also talk about how many of these same business management principles map onto the business of being a financial advisor as well, where most financial advisors hit the ceiling themselves by failing to apply Josh’s 5 principles of effective business, Josh’s strategy for advisors to differentiate their firms while not making the firm too reliant on any one key employee or advisor, how advisors can create a guarantee that reduces a prospect’s fear of signing on but without running afoul of regulators, and how most experienced advisors could apply a version of the 80/20 rule to their own practices to make themselves significantly more financially successful while simultaneously lessening the demands of the business on themselves.

And be certain to listen to the end, where Josh talks about the biggest challenge that he sees most financial advisors struggle with, the inability to delegate key tasks in client relationships, and how to overcome it by recognizing that in the end, even if team members make mistakes, there’s still crucial learning opportunities, especially since the truth is that in the end, clients will rarely actually leave over a single mistake anyway, and whether they do or not is primarily a result of how the firm handles the mistake, not the mere fact that it happened in the first place.

Monday, 25 March 2019

How Does the New Tax Law Affect My Health Insurance?

Tax Reform made changes to the tax law effective in the 2018 tax year for the majority of taxpayers. A few of the changes include the reduction of five of seven tax brackets, an increase in the standard deduction, and...

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source https://blog.turbotax.intuit.com/tax-reform/how-does-the-new-tax-law-affect-my-health-insurance-43282/