Vol. 2   Issue 1 - January 2010  -  www.cannonfinancial.com

The Estate Tax - What Now?

By Daniel A. Smith
As you know by now, it is 2010 and there is no Estate Tax. While the House passed a permanent extension of the current Estate Tax system in 2009, Congress never acted on it prior to recessing for the year. That means that the final year of the Bush tax cuts is in place and the Estate Tax has been repealed. This also means Generation Skipping Transfer Tax (GSTT) is repealed, since GSTT is imposed at the maximum estate tax rate. Read More.

Planning Ideas - Long-Term Care Insurance: Do Your Clients Need it?

Advisors are often admonished to provide their clients with comprehensive wealth management including risk management. In this context, risk management translates into planning for risks such as dying too soon, becoming disabled, or living too long.

One concern with “living too long,” even with affluent and high-net worth (HNW) clients is the need for long-term care. More specifically the concern is that (1) the risk associated with needing long-term care is so great; and (2) the cost of long-term care is so high and rising so rapidly that clients may either outlive their resources or diminish them to the point that other planning goals are frustrated. Read More.

Practice Management - Your Client Communication Plan

Most advisors understand the importance of client communication. Regular and purposeful client communication demonstrates your commitment to keep your clients informed. A well-executed Communication Plan also creates opportunities to ask your clients to keep you informed. Your commitment to interface with your clients in a professional, consistent manner allows you to be informed of your clients’ current situations, futures, feelings, and family dynamics so you can provide ideas, suggestions, and alternatives where appropriate.

Ultimately, a properly planned and executed Communication Plan enhances the Return on Investment (ROI) of your time.
Read More.

Behavioral Advice - Moral and Emotional Competency Increase Performance

In a breakthrough study, researchers found that advisors who demonstrated high levels of moral and emotional competency outperformed the S&P 500 by 73% over four full years. Top advisors delivered an average return on investment of 24.7% during the timeframe, nearly doubling the S&P 500 at 14.3%.

The study revealed that six key behavioral competencies accounted for 70% of the variance in client portfolio performance. Integrity had the strongest impact on positive client returns, while Client Service Orientation, Concern for Order & Quality, Teamwork, Self-Confidence and Achievement Orientation also predicted increased returns. Read the Study.

Regulation & Compliance - Harmonize, Harmonize

The term “harmonization” encompasses a broad range of issues geared at simplifying and tightening regulation of the financial services industry. One example is a major effort underway to examine the opportunities for harmonizing the regulation of futures and other securities. Currently, the Commodity Futures Trading Commission (CFTC) regulates futures and futures traders, while the Securities Exchange Commission (SEC) regulates other securities. These agencies held joint hearings and delivered a report to Congress on October 16, 2009. Read More.

Taxes - Paying for Healthcare Reform

Everyone has an opinion of the healthcare reform package currently working its way through Congress. Currently, the legislation has passed in the Senate, but it must be reconciled with the House version before going forward. One thing is certain: healthcare reform won’t be cost-free. Both the House and Senate versions include not only expanded health coverage, but also “revenue enhancers” intended to offset the anticipated price tag of reform. Not surprisingly, most of these are targeted at high- net worth (HNW) and affluent clients.
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