Blog

Defining Basis Points

By Bruce Starks, CPA, CFP®

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…

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Basis on Sale of Gifted Stock

By Dan Madden, CFP®

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…

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Financial Firms Account for Increase in CFP® Professionals

By Dan Madden, CFP®

CFP® Board Updates New data from the CFP Board confirms recent trend of leading US firms adding more CFP® Professionals than ever.  There were 6,089 new Certificants in 2023, with 1,000 of those coming from Edward Jones alone.  In fact, four firms increased their number of CFP® Professionals by more than 200. The four leading…

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Calculating Rate of Return

By Dan Madden, CFP®

Course: Investment PlanningLesson 1: Key Principles of Investing Student Question: Can you help solve a practice question?  I looked through the textbook and my notes, and just couldn’t wrap my brain about how to solve the problem below.  The confusing part to me is that the fund was not sold, so there is no sales price,…

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Bi-weekly Refinance Payment Calculation

By Dan Madden, CFP®

Mark refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $410,000 at the time of the refinance and the interest rate is 7%? $1,021 $1,258 $1,521 $1,601 CLICK TO REVEAL ANSWER Expand B is the answer. Mark pays his mortgage every two weeks which…

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529 To Roth IRA Rollover

By Bruce Starks, CPA, CFP®

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…

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Recognition on Installment Notes

By Bruce Starks, CPA, CFP®

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…

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Actuarial Assumptions in Defined-Benefit Pension Plans

By Dan Madden, CFP®

Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a defined-benefit pension plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution rate.…

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CFP® Certification—A Competitive Edge

By Bruce Starks, CPA, CFP®

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…

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