Blog
CFP® Certificants in the News: Honesty is the Best Policy
“Honesty is the best policy.” –Sir Edwin Sandys, 1599 CFP Board reported automatic interim suspensions on several participants’ right to use the CFP® mark in its April 14, 2020, press release. The CFP Board suspensions were based upon investment license revocations by the State of California and FINRA. Assuming the allegations made by CFP Board are proven, a number of recently-disciplined CFP® certificants…
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Qualified Business Income Deduction
Course: Income Tax PlanningLesson 9: Tax Implications of Business Structures Student Question: I’m having a hard time understanding the Qualified Business Income (QBI) deduction for Specific Service Trade or Business (SSTB). A nonqualified business is an SSTB, right? But SSTB businesses can qualify if they are under AGI income phase-out? Does that mean if I am financial advisor and file Schedule C with net income onto…
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Ratio Percentage Test
Which of the following statements concerning SEP and Keogh plans is not correct? A SEP must meet fewer reporting requirements than are imposed on a Keogh plan. A SEP is not considered by the IRS to be a qualified plan as is a Keogh plan. A SEP is similar to a defined contribution plan; a…
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Don’t Make Any Sudden Moves – CFP Board Practitioner Survey
COVID19, Market Volatility and Staying Calm The author had a Trust client that I will call Mr. B, a decorated former Marine. He built a highly successful business after he left the Marine Corps and eventually sold the business at a favorable valuation. While most of the author’s trust clients were highly stressed by the…
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Bond Investment Strategies
Course: Investment PlanningLesson 11: Fixed Income Investment Strategies Student Question: Good morning! This page in the lesson lists the Laddered Approach and the Barbell Approach as popular passive bond strategies. However, in the reading, on Page 312 (Money Education, 2nd edition), the Laddered Approach and the Barbell Approach are listed as active strategies. Can you help me clarify which is correct? Thanks! Kaitlyn Instructor Response:…
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Ratio Percentage Test
Assume that, of the 100 employees eligible for participation in G Company’s qualified pension plan, 20 are highly compensated employees and all 20 participate. What is the minimum number of G Company’s non-highly compensated employees that must participate in G Company’s qualified pension plan to meet the ratio percentage test? 20 50 56 70 CLICK…
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Procedural Rules Effective June 30, 2020
CFP® Board Updates On June 30, 2020, the CFP Board will begin enforcement of the new Code of Ethics and Standards of Conduct. This will coincide with the expected begin date of the new Procedural Rules. For those who are not familiar, the Procedural Rules replace the current Disciplinary Rules and Procedures and the Appeal…
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Qualified Plan Contributions
Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: I understand below is an example, but it is possible to contribute $20k to a retirement fund like a Roth IRA? I thought the limit was $6k. Example:Acme, Inc. contributed $20,000 to Tarzan Smith’s qualified plan in Year 1. Tarzan will never pay Social Security tax or Medicare tax on the $20,000 employer contribution;…
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Defined Benefit Pension Plans – Actuarial Assumptions
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…
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