Bruce Starks, CPA, CFP® – Page 27

Absolute Investment Risk on the CFP Board Exam: Part I

Good to Know This blog is the first in a four-part series that includes: When to trust the “mean” return, Using standard deviation to forecast outcomes, Skewness—Do we want negative or positive skew in our portfolio? Kurtosis of a return distribution—Is more kurtosis a good thing? We will begin with the average or mean return.…

Interest Rate Risk in a Bond

Course: Investment PlanningLesson 10: Fixed Income Securities Analysis Student Question: Hi- 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…

CELEBRATING BLACK HISTORY MONTH

CFP® Certificants in the News CFP BOARD encourages CFP® certificants and candidates to attend a Feb. 24 televised event featuring CFP Board Chair Kamila Elliot, CFP®. Here’s the invitation—“Join CFP Board Chair Kamila Elliott, CFP® during CNBC’s special Financial Faces of Change LinkedIn Live event on February 24 at 1:00 p.m. (Eastern). To celebrate Black History during February,…

How to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part III

Good to Know This blog is the third of a three-part series that includes: Part I: Reducing the IRS valuation (but not the real value) of Client Assets, Part II: Creative Use of Installment Sales and Specialized Trusts, and Part III: Using Annuities, Charitable Trusts, and Other Techniques. Private Annuity Sale (PAS) A private annuity…

Social Security Retirement Benefits

Course: Insurance PlanningLesson 10: Social Security Student Question: Hi- This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? Both $250…

Skewness versus Kurtosis

Course: Investment PlanningLesson 13: Asset Allocation Student Question: Hi- Can you help me understand the difference between Kurtosis and Skewness? I can’t quite piece it together. Thanks Meg Instructor Response: Hi Meg, Entire books have been written on this topic but the following summary should get the points for you on the CFP® Board exam…

How to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part II

Good to Know This blog is the second of a three-part series that includes: Part I: Reducing the IRS valuation (but not the real value) of Client Assets, Part II: Creative Use of Installment Sales and Specialized Trusts, and Part III: Using Annuities, Charitable Trusts, and Other Techniques. Background—Eliminate Transfer Taxes This blog combines the…

Unused Premium

Course: Insurance PlanningLesson 8: Gift and Estate Valuation Student Question: Hi- Could you please clarify for me what the unused premium would be in term life insurance? I don’t quite understand how you could not use the premium. Thanks. Thanks John Instructor Response: Hi John, Certainly. A lot of different terms in insurance, to be…

Deductibility of CEO Compensation

The CEO of Branyan Corporation, a publicly traded corporation, is paid a $3 million salary in the current year. How much of this is deductible by Branyan as a business expense? All $3 million. Salaries are a deductible expense. Salaries for senior executives are never deductible. $1 million. Annual compensation paid to the CEO of…

ARE FINANCIAL ADVISORS READY FOR THE “ADVICE REVOLUTION?”

CFP® Certificants in the News According to a CFP Board article dated December 21, 2021, “The shift in wealth management toward financial advice and financial planning is undeniable. From managing the change in consumer expectations to recognizing the significant value that financial planners offer, many financial firms have accelerated their adoption of business models that…