Bruce Starks, CPA, CFP® – Page 11

CFP Board Supports Expansion of Fiduciary Duty

CFP® Certificants in the News The Employee Retirement Investment Security Act of 1974 (ERISA) pioneered desperately needed reforms for employer provided retirement plans. As just one example of pre-ERISA abuses, some employers required lengthy vesting requirements and—in a flagrantly deplorable practice—terminated employees before they became vested to avoid paying pensions. Fifty years ago, ERISA rode…

Risk Premium versus Intrinsic Value

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: After reading the following, I’m confused about the amount a participant is allowed to take out as a loan from a qualified plan. Would it be up to $50k of vested account balance or only up to $10k? Text states: As a general rule, a participant…

Artificial Intelligence in Insurance

Good to Know The promise of AI must be tempered by the responsibility for its use by insurance companies according to a guidance bulletin published December 4 by the National Association of Insurance Commissioners (NAIC). According NAIC Commissioner Birrane, “This initiative represents a collaborative effort to set clear expectations for state Departments of Insurance regarding…

Risk Premium versus Intrinsic Value

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: The first review exercise page in Lesson 5, is Intrinsic Value the same as Risk Premium? Is that why we’re solving for P0 and not V (which is given)? The formula provided in the explanation confuses me. (question and answer from review exercise below) Review Exercise Question: Current price…

Crummey Powers

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Instructor…

When Do Gen Z, Gen X, and Millennial Investors Seek Financial Advice?

Good to Know “Advisors may need to connect to younger prospects on social media and tailor services to such life events as marriage, buying a home or starting a family, according to a recent survey…” according to a recent article published by Financial Advisor IQ. The article was based on a survey of 1,000 investors…

Donating Short-term Appreciated Securities

Course: Income Tax PlanningLesson 15: Property Transactions Student Question: In the lesson, deducting donations of ‘cash’ versus ‘long term appreciated securities’ are differentiated. I’m curious about “short term appreciated securities”. In other words, if I own a stock – bought at $10,000 and it’s worth $50,000 when I donate, but I’ve only owned it 6…

Are You Displaying Your CFP® Mark Correctly?

CFP® Certificants in the News Take this quick quiz to test your knowledge of CFP Board’s expectations of your use of the CFP® mark. For every use of the mark below, determine which is compliant. Note that question number 1 in our previous article was based on an accidental and incorrect posting by CFP Board.…

Custodial Accounts and Gifting

Course: Estate PlanningLesson 13: Case Study Online Student Question: If a check given by Mary to Peter was deposited into a custodial acct where Mary was the custodian, doesn’t that mean that Mary didn’t give up ALL control, so it’s not a complete gift? Instructor Response: That’s a great way to approach completed gift questions!…

Maximum Family Benefit

Course: Insurance PlanningLesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit? If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving benefits…