The FPA NorCal regional conference ran as it usually does, on the Tuesday/Wednesday following Memorial Day weekend at the Palace Hotel in San Francisco. Pulling over 600 attendees from across the country, the event is on par with any national conference in the financial planning space. Here are the highlights from Day 1, as broadcast from the incredibly active Twitter stream on the #FPANorCal hashtag!Read More...
Economic Outlook Highlights from Neel Kashkari – FPA NorCal Opening Session (Twitter Style!)
This past week featured the 2011 FPA NorCal regional conference. Pulling over 600 attendees, don't let the "regional" label fool you - the event is on par with any national financial planning conference! The opening general session event featured Neel Kashkari, currently a managing director with PIMCO, and former chief of the Trouble Asset Relief Program (TARP) for the Federal government. Here are the highlights... as captured on the #FPANorCal twitter hashtag!Read More...
Questioning Whether A College Education Is Worth It – Are We Measuring The Results Wrong?
As the cost of college continues to rise, and more and more students graduate in debt, and then try to enter a difficult job market, many have begun to question: is college actually worth the price?
The basic formulation is pretty straightforward: by going to college, you spend 4(+?) years not in the labor force, and spend money outright on the cost of college itself; in return, you have a higher employment income for all the years that follow college until you retire, which in theory can make up the college tuition outflows plus the years of foregone earnings.
However, as college gets more expensive, and the "bonus" to future salary for having a college education doesn't seem to be what it once was (especially for many liberal arts degrees), it's getting harder to make the case that college is still worth it.
There's just one problem: while you earn one future income without a college education, and a higher future income with a college education, neither projection accounts for the crucial income risk of unemployment.Read More...
Do Clients Really Care About Whether Advisors Are Fiduciaries?
With an increasing focus on fiduciary from NAPFA, the FPA, and a global trend towards fiduciary advice witnessed as far as reforms in Great Britain and Australia, it would seem that fiduciary is at the forefront of concerns about financial advice. Yet at the same time, we discuss the issues of fiduciary, broker/dealer, registered investment advisor, and the distinctions about advice that they imply, in the industry and technical jargon not really accessible to most clients. In the process, are we making fiduciary issues more relevant to clients, or actually diminishing the importance? In the end, is it really about having a legally-bound fiduciary on your side... or is it just about talking to someone you trust?Read More...
Legislative Uncertainty Creates New Problems For Estate Planning Gifting Strategies
Lifetime gifting is a widely accepted technique for managing potential exposure to future estate taxation. The purpose of the strategy is not just the obvious "if I give it away while I'm alive, I can't be taxed on it when I die" - due to the fact that both gifting and estate taxation share the same single lifetime exemption amount that is protected from taxation. Nonetheless, gifting can still be highly effective, because once the asset is transferred, all future appreciation is in the hands of the donee, and not the donor; as a result, the value of the asset is "frozen" at its value on the date of gift in terms of its cumulative gift and estate tax impact. And with the gift tax exemption recently increased to $5 million - and only until the end of 2012, after which it is scheduled to lapse back to $1 million - many estate planners are counseling clients to make some big gifts while they can. There's just one problem: it's not clear whether a future reduction in the gift and estate tax exemption could indirectly cause a so-called "recapture tax" on prior gifts.Read More...
Missed NAPFA National 2011? Experience The Entire Conference In Minutes… Twitter Style!
This past week was the NAPFA 2011 National Conference in Salt Lake City. Pulling almost 500 attendees from across the country, it's one of the top financial planning events of the year. Unfortunately, though, many did not have the time or opportunity to attend the conference. The good news, however, is that a growing cadre of Twitter users "live-Tweeted" the conference for all to enjoy, using the #NAPFA11 hash tag. So for those of you who missed the conference, here's a quick synopsis of the entire 3-day conference from start to finish... from those who Tweeted it!
NAPFA Throws Down The Gauntlet For Leadership Of The Profession
NAPFA has long been at the front vanguard of the profession, carving a path to advance financial planning forward. And for the most part, it has been incredibly successful. It put fiduciary in the center of the debate, and organizations from the CFP Board to the FPA have adopted fiduciary into their own Codes of Ethics and Practice Standards. It put comprehensive in the center of the debate, and now the CFP Board’s public awareness campaign is anchored around the comprehensive nature of financial planning to pull together all of life’s intricacies. It put fee-only at the center of the debate, and now methods of compensation, conflicts of advice, and objectivity of advice are being evaluated by Congress and government agencies to determine future regulation of the profession. It put the importance of competence at the center of the debate, and now the public media openly acknowledges the value of having the CFP certification as a cornerstone of financial planning knowledge. With so many victories in its core missions, NAPFA had to some extent begun to render itself less relevant, as its successes brought all parts of financial planning closer to its own ideals and diminished its own differentiation. And so at NAPFA National 2011, the organization announced a new branding effort and vision for 2020 – once again, throwing down the gauntlet for leadership of the profession.
Just Because Social Security & Medicare Are In Trouble Doesn’t Mean (All) Your Benefits Are!
Once again, the Social Security and Medicare Boards of Trustees have released their annual report on the fiscal health of the Social Security and Medicare programs, and once again the Trustees report shows that the fiscal health of the two programs has further deteriorated, a combination of primarily slower-than-projected growth, upwards adjustments to long-term costs (Medicare), and increases in estimated longevity (Social Security). With the latest projections, the Social Security trust fund is projected to be exhausted in 2036 (last year it was anticipated to last until 2037), and the Medicare trust fund will be depleted in 2024 (compared to last year's estimate of 2029). But while it's true that the systems are both headed for serious trouble as the trust funds potentially go "bankrupt" - the reality is that the actual depletion of the trust funds may still have a far less severe financial planning impact than many assume, for one simple reason: the overwhelming majority of Social Security and Medicare benefits will actually still be funded, via our ongoing Social Security and Medicare tax system!Read More...
Top 40 Tweets From FPA Retreat
Earlier this month the Financial Planning Association hosted FPA Retreat, one of the leading cutting edge conferences on the art and science of financial planning. Drawing hundreds of attendees from across the country (and around the world, with participants coming from as far away as Australia!), the conference never lacks for interesting ideas and conversations, both within the sessions and out in the hallways. This year, though, those who didn't attend still had the opportunity to enjoy some of the content virtually, thanks to an active group of participants who "live Tweeted" highlights throughout the conference on the #FPARetreat11 hashtag. For those of you who missed it, here are some of the highlights...Read More...
Is Social Media A Tool For Deepening Client Relationships?
As the popularity of social media rises - from Facebook to LinkedIn to Twitter - advisors are increasingly asking "what's all the buzz about" and "why should I care?" As many point out, planners develop new clients primarily by getting referrals from existing clients, and having face-to-face meetings to get to know them better. No one makes a decision about who to give their life savings to based on a Facebook page, right!? Perhaps, but a focus on the new business development opportunities from social media misses an important but crucial point - there's already plenty of value to be derived from social media, just by connecting to your EXISTING clients, to deepen the personal relationship you already have with them!Read More...
