Bruce Starks, CPA, CFP® – Page 36

Complying with the Practice Standards

Course: Fundamentals of Financial PlanningLesson 1: The Personal Financial Planning Process Student Question: Good evening. In Practice Standard B-3 (shown below), is the “reasonable basis” why advisors have client agreements stating what services are provided? Practice Standard B-3 The Practice Standards set forth in the Financial Planning Process – a CFP® professional must comply with…

Last Minute COVID-19 and Tax Extenders Bill

Good to Know President Trump signed the COVID-19 and Tax Extenders Bill into law on December 27, 2020. This blog will focus upon the following key provisions: Pandemic Relief CARES Act Extensions and Pandemic Provisions Tax Provisions Disaster Tax Relief Tax Extenders Pandemic Relief The bill provides a refundable tax credit in the amount of…

Understanding 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: Lower coupon bonds are more sensitive to interest rates than high coupon bonds. There is inverse relationship between bond prices and change in interest rates. There is a positive relationship between…

TOP 4 FINANCIAL CONCERNS OF THE PANDEMIC

CFP® Certificants in the News More than five of every ten Americans are experiencing “high” to “very high” financial stress levels as a result of the pandemic according to a survey commissioned by CFP Board and released December 3, 2020. Admittedly, that is hardly a seismic revelation. But if we dig below the headlines, you…

Passing Property Via Will

Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello – I’m a little confused about the example (below) discussing an heirloom of only sentimental value. Why would this be titled at all for a will, especially since an earlier lecture said items of no value would pass through the will as the situation does…

The Georgia Senate Races and Personal Tax Planning

Good to Know- Elections matter. They matter for a number of reasons, many of which are far more profound than financial effects and, as such, are out of any financial professional’s control. However, the financial advisor or financial planner may help prepare a client for potential tax changes in 2021. If, as a result of…

Information Ratio

Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello, In calculating Information Ratio, why do we need the denominator to be Standard Deviation of the difference in portfolio and index returns? This is unlike the Sharpe Ratio, where the denominator is Standard Deviation of the Portfolio. Doesn’t the Standard Deviation of the Portfolio indicate…

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…

Good to Know: Environment, Social, and Governance (ESG) Investing in Employer-Sponsored Retirement Plans

Good to Know We look to a highly respected source – The National Law Review1 – to help clarify confusion over ESG (Environmental, Social, Governance) investing issues in employer-sponsored retirement plans. Specially, we focus upon The National Law Review’s commentary on these issues: An overview of the final rule, Key requirements of the final rule,…

Book Value versus Market Cap

Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: Hi, How is a company’s book value different from the market cap? Thanks, Anibal Instructor Response: Hi Anibal, Book value is an accounting concept generally based upon the acquisition costs of and the legally binding amounts of liabilities. It is the amount of cash that would…