The Insured Retirement Institute (IRI) has created a new designation that focuses completely on retirement planning. The Retirement Income Certified Professional (RICP) designation and it’s offered by The American College and you can get it online through videos and recorded interviews with top retirement specialists. The course also includes support materials and a study guide.
The designation requires three courses, only the first of which is currently available. Its title is Retirement Income Process, Strategies, and Solutions. Course Two is titled Sources of Retirement Income and Course Three is titled Managing Retirement Income Plans.
The Retirement Income Industry Association (RIIA) launched its Retirement Income Analyst designation last May. The designation is given after completion of three courses that can either be taken online or in person at three universities located across the country.
One of the RIIA-approved programs begins September 4 and is offered at Boston University. It’s also offered online during the fall, spring, and summer. Texas Tech University in Lubbock, TX offers a five-week course during the spring and fall.
You can find out more about the courses for all three programs here at the RIIA website.
Advisors who don’t charge for financial plans usually cite one primary reason: If they propose charging for an initial financial plan, they might not get the client. After all, there’s a lot of competition out there, so it’s necessary to woo prospects with free services, right? But, let’s think about this. Do you really want clients that don’t place value on professional advice?
I assert that we should always charge for initial financial plans. Why?
Clients value what they pay for. I typically charge about $5,000 for a basic plan, asking for 50 percent up front, with the remaining 50% due on presentation of the plan. When a client pays money up front, they are “buying in” to the process. They will have more incentive to actively participate, provide information, and act on recommendations. By charging for this service, the advisor is validating the value proposition while the client acknowledges that there is a value to financial planning.
As financial advisors, we differentiate ourselves from stockbrokers and portfolio managers by providing services beyond mere investment management. We tout our value as financial planners, yet some of us charge only for investing, not for financial plans!
By not charging, initial financial plans are essentially a “loss leader.” That’s just a plain bad business practice. Think about how much time is spent on preparing and presenting financial plans. As opposed to giving this time away, financial planning should be treated as its own business unit. And, you should charge a fair price.
How many financial plans do you provide for free? If you average just two plans per month, charging $5,000 each would increase your annual revenue by $120,000. In the end, any revenue increase from financial planning is a winner – and you will ensure a stream of new clients that truly value you.
Many Boomers have failed to save enough money to support the type of lifestyle they’d like to lead during retirement. And although Social Security doesn’t provide nearly the amount of security it used to, there are ways to maximize your clients’ benefits, especially if they are married.
Spouses can’t claim each other’s Social Security benefits. But if they wait until they’re both 66 years old (current retirement age) to file for benefits, then there’s a strategy they can employ which will give them a bit of income now and maximize benefits for both a few years later.
Here’s the way it works. One spouse reaches the age of 66 and files to receive benefits but suspends actual collection of those benefits until he is age 70. His wife may claim a spousal benefit of half the husband’s full benefit.
So if the husband’s benefit is $3000 per month, she can receive $1500 per month without reducing the benefits he will receive. She can claim this benefit at age 62. If she chooses to do so, her benefit will be less than half of his—32% less, to be exact.
But if she also waits until she is 66, she can receive the full 50% of her husband’s benefit. If both wait until 70 to actually receive benefits (they both file and suspend), she can start receiving half of his monthly benefit at age 66, then they both can receive 32% more of their respective benefits per month at age 70.
So, if he files at age 66 and suspends receiving benefits until age 70, then she files at 66 and suspends receiving her benefits until age 70, she can still receive the $1500 per month. Then at age 70, they both will receive 32% more (benefits go up by 8% per year from age 66 to age 70) on their respective benefits.
This higher benefit level also serves as the basis from which all other benefits are calculated. This could be a retirement strategy your clients don’t know about, but should.
A US Supreme Court decision is in the making that will affect advisors to same-sex couples. The question is of extending the marital estate tax deduction to same-sex couples in states where it is legal for them to be married.
The case is Windsor vs. US and the judge ordered that Edith Windsor be refunded $363,000 that was taken from her because she was not allowed to take the marital deduction from her recently deceased female spouse. Their union was recognized by the state of New York. The case was sent to the Supreme Court without waiting for an appellate court decision.
The Declaration of Marriage Act (DOMA) was declared to be unconstitutional by a New York federal court. If the Supreme Court upholds that DOMA is unconstitutional, the 1996 law will no longer be able to keep same-sex spouses from receiving income and estate tax marital deductions or, for that matter, Social Security or pension benefits.
It is practically a certainty that the law will be brought before the Supreme Court within two years. The Windsor case is cited as being groundbreaking. Despite the federal ruling, many advisors are counseling same-sex couples not to change their planning for now.
But they don’t think such couples will need to wait much longer since the current administration is no longer defending DOMA from legal challenges
The 3.8% surtax is likely to add selling pressure in the stock market in the near-term and make life insurance and annuities more popular for the long-term. Those were just two of the emerging trends that will be reshaping the wealth management landscape for high-net-worth individuals in the months ahead, according to comments at a webinar last Friday by tax expert Robert Keebler.
Attendance was strong at the webinar, indicating that advisors know that the new surtax — part of the health care law that the U.S. Supreme Court upheld on June 29 — is going to play an important role in wealth management in the months ahead. However, Keebler’s assessment included some surprising twists, including a prediction that life permanent life insurance and annuities will return to popularity to shield income.
Keebler also said that avoiding paying the surtax on investment income could cause investors to sell assets with big gains. With the stock market rising 100% since its low during the global financial crisis, that could add selling pressure in the stock market.
Keebler received an amazing 4.67 score from attendees (on a five-point scale) and their comments are below.
Very helpful. Great topic. One of the best ones I've seen lately
Very helpful and timely, great examples
Should provide slides
Helpful but a lot of information; would like to have the slides.
Very well done. Made a confusing topic much more understandable.
Numerous sound problems!
Good detailed information
Interesting insight on a new planning subject.
Very valuable...wish there had been more time!
Dry topic, good presentation though.
Good information on a very timely topic.
As usual, Bob Keebler has added a better (detailed) understanding of a very complex tax topic that will (unfortunately) be a part of most of our clients' future financial reality. His ideas on how to help mitigate this surtax has already got me thinking in new directions to now approach with my clients. VERY GOOD STUFF!
I really enjoyed it, thought it was very informative
Excellent discussion of the mechanics of the tax and strategies for dealing with it.
A little hard to follow.
Great topic, info.
Overall very good
I need to watch it in your archive about three more times to understand it.
It was very well done, congratulations on collaborating with Bob, A REAL PROFESSIONAL.
Fabulous job once again Bob! Thank you to you and Andy.
I would have liked it to be longer for more Q and A.
Very good. Thanks for the timely subject
Great to see the examples. They clarify the confusing part of the requirements.
Good, nice use of examples, got kind of rushed at the end.
Good info on a new delightful subject!
Excellent and very timely.
GREAT information and sale ideas
Great information that is critical to be aware of.
Tough topic - presented very well
Chock full of information.
Good info, but went way too fast. Too many details glossed over
Very timely and informative
Robert is fantastic!
Good information, but should provide slides. Felt like an exam review much of the time, but concept was solid
Very helpful in understanding the surtaxes. Do you know of anyone that has created a calculator to assess if the surtax is applicable and subsequently the extra tax that will have to be paid due to the surtax?
Information overload. Perhaps you break this one into two segments