Posts by Bruce Starks, CPA, CFP®
New CFP Board Sanctions and Guidelines
Good to Know CFP Board is changing the way CFP® Certificants and Candidates for CFP® Certification are disciplined (sanctioned) for violations of the Code of Ethics and Standards of Conduct. The new guidelines will be effective on July 1, 2024. In many cases the new potential sanction is more severe than previous sanctions but in…
Read MoreDependent Care Assistance Plan
Course: Retirement PlanningLesson 9: Building Retirement Wealth by Maximizing Fringe Benefits Student Question: Is a Dependent Care Assistance Plan (DCAP) funded by an Flexible Spending Account the same thing as a Dependent Care FSA? If not, could you provide some additional info as to how the two would work together (could an individual utilize both…
Read MoreGolden Anniversary—CFP® Certification Turns Age 50
CFP® Certificants in the News According to a recent CFP Board article, “In 1973, the College for Financial Planning minted its first class of 42 trail-blazing men and women specifically trained in the professional discipline of financial planning. Half a century later, CFP Board certifies nearly 98,000 CFP® professionals in the U.S. That number will…
Read MoreUnderstanding the Relationship Between Coupon Rates and Duration
Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: There is a question regarding duration that I continue to struggle with. Which of the following are true:1-Lower coupon bonds are more sensitive to interest rates than high coupon bonds.2-There is inverse relationship between bond prices and change in interest rates.3-There is a positive relationship between coupon rates and duration.…
Read MoreNot All Sunsets Are Beautiful
Good to Know Income taxes and transfer taxes will rise—in some cases painfully—after December 31, 2025. Transfer taxes include gift, estate, and generation-skipping taxes. Income tax rates will increase and transfer taxes may rise as taxpayer friendly provisions of the Tax Cuts and Jobs Act (TCJA) expire (sunset) for years beginning on or after January…
Read MoreDefining Basis Points
Course: Investment PlanningLesson 15: Fundamentals of Derivatives – Futures and Options Student Question: Can you please explain what Basis points are and how/why they are generally used? Instructor Response: There are 100 basis points in 1%. Basis points are merely a common method of measuring investment fees or returns. An exchanged traded fund may charge a…
Read More529 To Roth IRA Rollover
Good to Know Your prospect started saving for their child’s college education early and consistently. Fast forward to when the child graduates from college. Now it’s obvious there’s $35,000 in the 529 plan that will not be needed for college. When they turn to you for advice, how do you advise them? Here’s an interesting…
Read MoreRecognition on Installment Notes
Course: Estate PlanningLesson 12: Valuation and Freeze Techniques to Reduce Estate Tax Liability Student Question: I’m not sure how gains are spread out over the course of the note if these are typically structured “as interest only with a balloon payment at the end”. Here’s the language from the lesson: Instead of an outright sale, an…
Read MoreCFP® Certification—A Competitive Edge
CFP® Certificants in the News According to CFP Board, “more than 10,000 firms across the U.S. are employers of CFP® professionals, and with good reason.” The chart below testifies to the explosive growth of clients that prefer working with a CFP® Certificant in 2023, rising dramatically to over eight of every ten clients from only two…
Read MoreInterest Rate Risk in a Bond
Course: Investment PlanningLesson 10: Fixed Income Securities Analysis Student Question: I’m not clear why holders of long-term bonds are subject to interest rate risk. If a 20-year bond is purchased at par with a coupon rate of 6.25% ($62.50/year), it seems to me that the investor would still receive $62.50 a year regardless of interest rate changes. What…
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