Nearly Half of Americans 55 and Over Are Making This Huge Financial Planning Mistake

When we think about financial planning, we tend to focus on things like building our IRAs or 401(k)s, paying off our mortgages in time for retirement, and socking away enough money to send our children to college. But there’s one critical move that a large number of older Americans have yet to make: creating a will.

Almost half of Americans ages 55 and older don’t have a will, according to a study by Merrill Lynch and Age Wave, despite the widely held belief that it’s best to have one prior to age 50. If you’re missing a will, it’s crucial that you carve out some time to get that key document taken care of — before something tragic happens and your heirs are left in the lurch.


Stop making excuses

Creating a will might be among the most uncomfortable things you’ll ever have to do in your life. But putting it off won’t spare you the unpleasantness of having to contemplate your own mortality. The only thing it will do is put your family in a tough position if something does happen to you and you don’t have that document in place.

Another reason people tend to put off wills is that they don’t want to make their children uncomfortable by looping them into the process. Not only that, but grown children are often reluctant to take part in estate-planning conversations. Still, those discussions are important to have, especially if you’re looking at a fairly large pool of assets that will need to be divvied up appropriately once you pass on.

Spare your children the stress

Having a will isn’t something that only wealthy people do. If you have any assets you expect to leave behind, whether it be cash, investments, or a home, then you’ll need to spell out what you want done with those assets once you’re no longer around.

If you don’t have a will, you won’t get a say in how your assets are distributed; rather, the laws of the state you reside in will dictate how your investments and belongings are disbursed after your passing. In that case, you run the risk that your assets won’t go to the people you want them to.

Furthermore, if you pass at a time when your children are still minors, you won’t have a say in their care unless you’ve designated a guardian in a will. And that’s a risk you absolutely can’t afford to take.

Get your affairs in order

Creating a will is a fairly simple process, provided your estate isn’t particularly complex. There’s software out there you can use to create a will by yourself, but in many cases, you’re better off enlisting the help of an estate-planning attorney to draft your will for you. You might pay just a few hundred dollars to have that document created (assuming you’re getting a basic will), and if you have a legal plan through work, will creation might be a covered service that costs you nothing extra out of pocket.

Once you have that will, store it in a safe place. That doesn’t mean putting it in a shoebox under your bed. Rather, invest in a fireproof safe and store it there — but make sure to give your children or loved ones the combination so they’re able to access your will in the event that they need to.

You’ll often hear that the best place to store a will is your safe deposit box at your local bank, and that’s true, provided your children or other trusted people in your life are given access to it. But if you’re the sole account holder on that safe deposit box, your loved ones might need to jump through some legal hoops to get into it.

Furthermore, if you use a lawyer to create a will, he or she should keep a copy of it on record as well. In fact, that’s another benefit to having an attorney create your will rather than going it alone.

Creating a will can be an unpleasant process — but it’s one you shouldn’t put off. Having that document in place will give you peace of mind knowing that your wishes will be carried out as you desire, and that’s reason enough to stop procrastinating and just get it over with.

How Yeske Buie groomed new millennial equity owners

Dave Yeske, 61, and Elissa Buie, 58, are planning for the day when their firm can run without them.

Back in 2010, the husband-and-wife co-founders of their eponymous RIA, set out to make themselves “dispensable” to the firm they’d created through the merger of their separate practices two years earlier. The plan was to do so by 2020.

“Being dispensable doesn’t mean we’d be gone, but it does mean that we’d built a firm that could run without us,” Yeske says. Staff turnover during the early years made the objective challenging. “We despaired of achieving anything like our goal by 2020,” he adds.

RIA co-founders Dave Yeske and Elissa Buie in Antartica last month. Three new partners keep the couples eponymous firm running in their absence.

RIA co-founders Dave Yeske and Elissa Buie in Antartica last month. Three new partners keep the couple’s eponymous firm running in their absence.

Today, Yeske Buie, with offices in San Francisco and Vienna, Virginia, is on track to hit that goal. It required solving a conundrum that bedevils many other firms: How to generate enough equity to fund their retirement without being forced to sell to an aggregator or a bank? The couple decided to find and groom the next generation of firm leaders in-house instead.

“We came to the realization that what worked best for us was hiring new college grads out of undergraduate programs and training them in the Yeske Buie way, as opposed to hiring staff with prior work experience in financial planning,” Yeske says.

Two of the firm’s new partners, Yusuf Abugideiri, 32, and Lauren Stansell, 28, are graduates of Virginia Tech’s financial planning program. The third, 27-year-old Lauren Mireles, works in client relationship management and graduated with a business degree from California University of Pennsylvania.

Yeske Buies new millennial partners (left to right) Yusuf Abugideiri, 32, Lauren Stansell, 28, and Lauren Mireles, 27.

Yeske Buie’s new millennial partners (left to right) Yusuf Abugideiri, 32, Lauren Stansell, 28, and Lauren Mireles, 27.

“Our three new owners are young because we hired them young,” he says, “but also because they emerged as a natural leadership team within the firm sooner than we originally thought possible.”

So quickly, in fact, that by 2012 the couple planned a test of sorts: a month-long trip to the Caribbean and Alaska in which they planned to be unplugged the entire time. They left the firm in the hands of their employees, who were all in their early- to mid-twenties at the time.

The team took a year to prepare for what became known as the co-founders’ “Dispensability Tour 2012,” Yeske says.

The vacation was a success. The team reached out to the founders just once on a matter that was quickly resolved.

While Yeskie and Buie still own 94% of their firm, they envision the day, maybe in a decade or so, when their ownership will drop to 50%, and then farther.

To that end, Yeske Buie also has an in-house planning residency program for recent college graduates that is modeled on those in the medical profession. The firm recently hired two graduates of the three-year program for permanent positions. They are not yet partners.

In an interview, the firm’s newest partners expressed no small degree of astonishment at finding themselves at the day-to-day helm of a firm like Yeske Buie.

“We are equity partners at a firm that serves over 250 clients and families and manages around $700 million” in client assets, Abugidieri says. “We lead and manage a team of 15 individuals.”

“Given our respective ages,” he says, contemplating these figures “can be staggering.”

Which is why Abugideiri has no intention of leaving.

“This is it for me,” he says. “It would be the ultimate blessing if working at Yeske Buie could be my first and last job.”

That’s good news for Yeske and Buie, who are reaping the benefits of having worked hard to build a bench of new leaders in whom they feel confident.

“Last August we spent nearly a month in Africa and didn’t feel the need for any special preparation, asking the team if they needed anything from us only days before our departure,” Yeske says. “They didn’t. And everything ran smoothly during our absence. As you might imagine, it felt good.”

The couple now owns an apartment in Cape Town, South Africa, after Buie spoke at a 2007 financial planning conference there. They currently rent the place out, but eventually plan to keep it open for friends and to visit the city more frequently themselves.

“Elissa has already planned at least five vacations for 2019,” Yeske say, adding that it will be some time yet before the pair fully step away from their work as planners.

“We’ll likely be around annoying the young people for many years,” he says.

Sensible Financial Planning & Management LLC. Sells 1,279 Shares of Vanguard S&P 500 ETF (VOO)

Sensible Financial Planning Management LLC. trimmed its position in Vanguard SP 500 ETF (NYSEARCA:VOO) by 2.2% during the 4th quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund owned 56,583 shares of the company’s stock after selling 1,279 shares during the quarter. Vanguard SP 500 ETF comprises about 6.3% of Sensible Financial Planning Management LLC.’s investment portfolio, making the stock its 4th biggest position. Sensible Financial Planning Management LLC.’s holdings in Vanguard SP 500 ETF were worth $13,003,000 at the end of the most recent reporting period.

Other hedge funds have also recently modified their holdings of the company. Argent Trust Co grew its position in Vanguard SP 500 ETF by 80.0% in the fourth quarter. Argent Trust Co now owns 44,310 shares of the company’s stock worth $10,183,000 after acquiring an additional 19,692 shares in the last quarter. Cerity Partners LLC grew its position in Vanguard SP 500 ETF by 66.5% in the fourth quarter. Cerity Partners LLC now owns 25,022 shares of the company’s stock worth $5,750,000 after acquiring an additional 9,993 shares in the last quarter. Capital Advisors Inc. OK purchased a new position in Vanguard SP 500 ETF in the fourth quarter worth about $516,000. Homrich Berg grew its position in Vanguard SP 500 ETF by 12.3% in the fourth quarter. Homrich Berg now owns 8,621 shares of the company’s stock worth $1,981,000 after acquiring an additional 944 shares in the last quarter. Finally, Exencial Wealth Advisors LLC grew its position in Vanguard SP 500 ETF by 101.9% in the fourth quarter. Exencial Wealth Advisors LLC now owns 1,716 shares of the company’s stock worth $394,000 after acquiring an additional 866 shares in the last quarter.

Shares of NYSEARCA:VOO traded up $2.26 during trading hours on Friday, hitting $254.46. 124,831 shares of the company’s stock traded hands, compared to its average volume of 3,721,835. Vanguard SP 500 ETF has a 1 year low of $214.83 and a 1 year high of $270.67.

Vanguard SP 500 ETF Company Profile

Vanguard 500 Index Fund (the Fund) is an open-end investment company, or mutual fund. The Fund offers four classes of shares: Investor Shares, Admiral Shares, Signal Shares, and Exchange Traded Fund (ETF) Shares. The Fund seeks to track the investment performance of the Standard Poor’s 500 Index, an unmanaged benchmark representing the United States large-capitalization stocks.

Further Reading: Should You Consider an Index Fund?

Want to see what other hedge funds are holding VOO? Visit to get the latest 13F filings and insider trades for Vanguard SP 500 ETF (NYSEARCA:VOO).

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Barred financial advisors pose questions ahead of M&A deal

An ex-NFL star settled with his barred advisor’s former firm for $1.5 million. The same firm also won an award for $2 million from another banned representative who has pleaded guilty to fraud.

The two former Next Financial Group advisors have cost the firm a combined $3.7 million already — and the cases pose further questions ahead of its pending sale to Atria Wealth Solutions. The private equity-backed parent of three independent broker-dealers unveiled its agreement to purchase Next on the same day last month as a FINRA arbitration panel decision awarding the firm more than $2 million in compensatory damages from admitted fraudster Douglas P. Simanski.

Simanski’s ex-clients have won 21 settlements for $2.2 million, FINRA BrokerCheck shows. Next — not Simanski — most likely paid the non-public settlements after he pleaded guilty to fraud in the Western District of Pennsylvania, where a federal judge deemed him “financially unable” to hire counsel.

Next also settled for $1.5 million with former NFL star offensive lineman Leonard B. Davis and his wife Amanda, after they alleged in a civil lawsuit filed in Houston court that two lawyers and an accountant conspired with advisor Tye C. Williams to defraud them in a franchise restaurant venture.

Leonard Davis, Dallas Cowboys

Former Pro Bowl and All-American offensive lineman Leonard Davis earned $25.4 million in 2007, making the Dallas Cowboys guard the NFL’s highest-paid player that season.


The onetime Pro Bowl guard with the Dallas Cowboys and VH1’s “Football Wives” cast member have no pending action against Next, but their lawsuit will likely shed more light on the case. The Davises also have a pending arbitration against Williams and his practice’s bookkeeper, who has pleaded guilty to fraud.

In a Dec. 26 ruling, a Harris County judge allowed the Davises’ claims of fraud and conspiracy to enter the discovery phase while dismissing their allegations of breach of fiduciary duty and aiding and abetting. The Davises have filed a motion to reconsider the ruling, and the lawsuit could stretch into 2020.

Compliance and regulatory cases involving conduct under a prior ownership structure often stretch two to three years after an acquisition, according to Stevens Lee attorney Thomas B. Lewis, who isn’t involved with the cases but represents financial firms in litigation.

It isn’t unusual for MA deals to result in additional claims. Sellers often set up contingencies like escrow accounts for potential liabilities under the previous owners, Lewis says. They also frequently provide buyers with disclosure documents about current cases, he adds.

“What you don’t know about are the potential liabilities in the future,” he says. “It could be a real windfall for claimaints’ counsel. There could be a lot of potential claims out there, and it’s probably in the interest of the new company to settle claims as fast as it can.”

A Next spokeswoman declined to discuss either case via email, saying the firm doesn’t comment on pending litigation or lawsuits. The Houston-based firm would keep its management and headquarters as an independent subsidiary of Atria, which expects to close on the acquisition later this quarter.

Next fired Simanski in May 2016, alleging he “sold fictitious investments and converted the funds for his own personal use and benefit,” according to BrokerCheck. Last April, Next filed the FINRA arbitration claim requesting $2.3 million in damages and accusing him of indemnification and breach of contract.

Douglas P. Simanski cases

A three-member panel awarded Next damages plus costs of $6,200 for an award of $2.01 million, the Jan. 8 decision shows. Simanski, 53, also pleaded guilty to securities fraud, wire fraud, and false tax returns in November, after investigators said he bilked clients for $4.5 million with bogus investments.

Christopher Brown, the public defender representing Simanski in the federal case, declined to comment in an email. It’s not clear whether the former Next representative or the firm could face additional arbitration filings. Simanski’s judge has scheduled his sentencing for April 4.

FINRA barred Simanski and Williams in 2016 because both advisors failed to provide documents and information in connection with investigations into their conduct, according to BrokerCheck. The regulator also barred Williams’ bookkeeper, Gwendolyn M. Berry, for the same reason that year.

Berry, 66, pleaded guilty last February to federal charges of wire fraud, mail fraud and false tax returns. She had embezzled $1.8 million from the Davises between 2008 and 2014 by siphoning money from their 529 plans and other accounts, according to investigators in the Southern District of Texas.

Two attorneys representing Berry in the civil and criminal cases didn’t respond to requests for comment. She’s serving prison time at a Houston facility until her expected release in July 2022, according to federal inmate records.

Voices: My predictions for 2019’s regulatory agenda

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Davis earned more than $70 million between 2002 and 2013, but he and his wife fell victim to a “scheme” in which the lawyers and accountants “knowingly ignored and failed to communicate numerous red flags to Davis that are now being brought to light,” the lawsuit says.

The Smashburger venture turned out to be “financially catastrophic” to the Davises after the first five eateries in a 30-location agreement had to be sold back to the franchise restaurant chain due to cash flow problems caused by the structure of the deal and Williams’ management, according to the complaint.

Davis “lost not only the capital invested, he also lost the money he loaned to the Smashburger venture, the money embezzled, the money paid to the Advisor Team as ‘legal and professional fees,’ and the money squandered over the course of the investment,” according to the filing in Harris County court.

The Davises had originally sued Next, Berry and Williams under their initial July 2015 filing, but the court ordered them to pursue the defendants in arbitration, according to the complaint. Next settled their claim in December 2017. The claim against Berry and Williams has been stayed, pending the lawsuit.

“I can tell you that Tye Williams represented the Davises with professionalism and concern for his clients,” Craig Nevelow, the attorney representing Williams, wrote in an email. “As you know, anyone can make sensational statements in a pleading in an attempt to buttress their case.”

Nevelow didn’t answer follow-up questions, having referred Financial Planning to a Nov. 26 motion for summary judgment filed by Michael Baldwin, a lawyer named as a defendant, and his firm Jackson Walker. Nevelow is “hesitant to go further into details” about the issues involving the Davises, he said.

The Davises never asked Baldwin to review any contracts with Williams or their decision to hire him in 2005, the motion states. Their spending at the peak of Davis’s career was “profligate,” and the lawyers warned Davis he could lose millions on his investment into the restaurants, the filing states.

“We think these claims are without merit,” says Alistair Dawson, the attorney representing Baldwin and the law firm. “All the risks associated with that transaction were conveyed to Mr. Davis before he entered into it, and he entered into it fully aware of the risks.”

Judge Debra Ibarra Mayfield ruled on Dec. 26 that the Davises had “not alleged sufficient facts” to sustain two of their claims under the relevant law and found that a five-year statute of limitations under the Texas Securities Act voided another claim around the 2009 Smashburger investment. Mayfield denied the defendants’ motion to dismiss the claims of fraud and conspiracy.

Mayfield, a Republican, lost her re-election bid to Democrat Beau Miller in November, making Miller the new judge in the Davises’ case. The Davises are challenging the Dec. 26 ruling as the other claims move forward. The next hearing is scheduled for March 1.

Tobias Salinger

Private-equity backed Hanson McClain acquires HGP Retirement Network

Scott Hanson wants to take the hybrid RIA he co-founded from its current $3.8 billion in assets to $10 billion within four years. His strategy to get there? Acquisitions.

“Organic growth is just too slow. It takes a long time,” says Hanson, who serves as co-CEO of Hanson McClain Advisors along with his partner, Pat McClain.

The Sacramento-based firm, which is backed by private equity firm Parthenon Capital Partners, is growing quickly, completing three acquisitions in a little over a year, according to the firm. Its latest deal, which closed on Feb. 1, was the purchase of the $235 million practice HBP Retirement Group.

Hanson wants to develop a national RIA where clients see one brand and have the same client experience across every office, he says. New advisors become employees of the firm and fully integrate into the organization, according to Hanson.

What’s in it for the advisors? Primarily growth.

Scott Hanson and Pat McClain are co-CEOs of hybrid RIA Hanson McClain, which has completed three acquisitions in a little over a year.

Scott Hanson and Pat McClain are co-CEOs of hybrid RIA Hanson McClain, which has completed three acquisitions in a little over a year.

“A lot of advisors get stuck at a certain point, and it’s hard for them to grow beyond that,” Hanson says.

The firm takes care of daily administrative tasks for advisors, and it has a 16-person marketing department to help them promote their practices and land new clients, he says.

The Hanson McClain business model resonated with Hugh Phillips of HBP Retirement Group. Phillips, who left the Ladenburg Thalmann subsidiary independent broker-dealer Securities America with advisor Cheyenne Walker, wants to double his AUM at his new firm where he says he’ll be able to spend more time with clients.

“Once you start approaching that $300 million dollar range, that’s when it’s really hard,” the Napa, California-based advisor says. “Your existing clients start losing the message. You’re not branding yourself as well.”

He points to what he says is a growing list of operational responsibilities and the need to make significant investments in the practice, such as by adding a full-time marketing employee and office manager.

“It definitely reaches a point of diminishing returns. You have to make such a substantial investment that your net really gets squeezed,” Phillips says.

Rather than go about it on his own, Phillips opted to sign on with Hanson McClain even though it entailed a pay cut.

“It’s close to half of where I was [at Securities America],” Phillips says.

Hanson McClain pays its employees a salary with a bonus based on AUM, according to the firm. Phillips says that equity and growth opportunities made the pay cut worth it.

“I know I took a step back. But sometimes you have to do that to take a couple steps forward. There’s no doubt about it,” Phillips says.

Another motivation to make the move was assurance that Hanson McClain would continue to grow in size and value, he adds.

“Sometimes we ask clients to make decisions based on trust, and that’s a huge part of why I made this decision,” Phillips says.

He’s had a a 30-year relationship with Hanson and McClain, having been a part of a marketing network offered through the broker-dealer Hanson McClain Securities (Hanson McClain no longer accepts partners for this network). Phillips had joined the program a few years after joining Securities America in 1995. At the time, Phillips managed $29 million in assets, he says.

“Every time I see [Hanson] I tell him I would never be in this position if it weren’t for our marketing partnership. Never ever would I be in this position,” Phillips says.

Still, it will take time to adapt to the new business model, he says. “I’m used to being in control of the environment, being the one in charge, being the one that has to handle everything that goes into running the business.”

As the hybrid RIA acquires new practices, Hanson McClain is developing a new brand for itself. It will adopt a new name — Allworth Financial — in late April.

“We wanted a name that resonated more with a national brand and consumer,” Hanson says.

A spokesman at Securities America did not respond to a request for comment on the departure of HBP Retirement Group from its network.

Jessica Mathews

Wealthfront now offering FDIC insured cash accounts

Wealthfront is looking to grab more than just a chunk of their clients’ investable assets — it’s out for their cash deposits, too.

The second leading robo advisor by assets teamed up with a handful of banks to unveil a new offering that gives clients a fully-insured place to keep their cash. The Wealthfront cash account offers a 2.24% interest rate (as of now) and is FDIC insured up to $1 million, according to a spokeswoman.

“Every year, the four largest banks in the U.S. make over $300 billion in revenue while paying consumers next to nothing on their cash deposits,” Dan Carroll, co-founder of Wealthfront, said in a statement. “Imagine how impactful that extra money could be on people’s lives.”

Accounts can be opened with as little as a dollar and aren’t subject to market risk. The firm, which manages almost $11.5 billion in customer assets, is working through a white-label agreement with the banks — including East West Bank and New York Community Bank — to provide the service, according to a spokeswoman.

There are no fees associated with the accounts, says the spokeswoman. Ninety percent of Wealthfront’s 220,000 clients are under the age of 45 and the average age is about 32. The majority live in coastal cities like New York, San Francisco, Los Angeles, Washington and Seattle. The average client account is around $41,000, according to public filings.

Andy Rachleff Wealthfront IAG

“In order to optimize and automate all of our clients’ finances, we need to offer ideal short and long-term destinations for their cash,” says Andy Rachleff.

“Adding the capability to help our clients with their short term needs will be an important addition on our way to building out Self-Driving Money,” the spokeswoman said, referring to Wealthfront’s overall vision to automate all client financial needs in one place.

CEO Andy Rachleff expects to make further forays into the banking space in the coming year. “In order to optimize and automate all of our clients’ finances, we need to offer ideal short and long-term destinations for their cash,” he said in a statement.

The move comes two months after Robinhood’s high-profile foray into the banking sector. The no-fee stock trading app initially rolled out a similar cash account comparable to traditional bank accounts — but with sky-high 3% interest rates. However, the firm had not communicated with the SEC before soliciting the product. After public backlash, Robinhood quickly scrubbed the page from its website.

Wealthfront says it has been in close contact with regulators about the suitability of the new offering. “We always work closely with regulators when we are launching a new endeavor,” the spokeswoman said.

In December, Wealthfront became one of the first robos to settle an enforcement action with the SEC. The company disclosed their proprietary tax loss harvesting software would monitor all client accounts for certain detrimental transactions, but was unable to prevent them, according to the regulator.

Some advisors are skeptical that Wealthfront’s partnership, and its entrance into the banking sector, will yield a different result than the Robinhood entrance before it. “Robinhood redux?” says William Trout, head of wealth management at Celent. “At a minimum, this move screams entry into the banking space.”

Wealthfront is only the latest robo advisor to seek an avenue into its clients’ bank accounts. Betterment rolled out a tool in December to sync checking accounts from its more than 400,000 retail clients to a low-risk ETF portfolio generating returns of about 2%, according to the firm. The largest independent robo advisor automatically siphons excess funds, anything more than $20,000, from the checking account into the investment vehicle for a 25 basis-point fee.

Considering Bank of America and Merrill Lynch are the only firms offering tools to tightly integrate banking and wealth management for clients, the offering could play very well for Wealthfront, Trout says. Additionally, the partnerships give the banks readily available access to cash deposits, while simultaneously offering Wealthfront clients the convenience of having a savings-like account integrated into their investment platform, he says.

However, Wealthfront’s recent “freemium” and no-fee offerings may be a roadblock to becoming profitable and sustaining revenue long term. “The terms they are offering here and elsewhere — like making their Path tool free — are either ambitious or downright reckless, depending on your point of view,” says Trout.

Wealthfront likely has “patient capital” behind them, especially now that Rachleff returned to the helm, Trout says, adding that client engagement has become the endgame.

“Turning eyeballs into wallets is tough,” he says. “Especially if you are offering very generous terms.”

Going Broke Remains Top Concern in Retirement: Survey of CPA Financial Planners

NEW YORK–(BUSINESS WIRE)–Of all the concerns impacting Americans’ retirement today, running out
of money, maintaining their lifestyle and rising healthcare expenses
continue to top the list. This according to the American Institute of
CPAs (AICPA) Personal
Financial Planning Trends Survey
which was conducted August 20
through September 24, 2018 and includes responses from 631 CPA financial

Running out of money is the top financial concern of clients planning
for retirement, cited by 30 percent of CPA financial planners. This
reflects an improvement from the AICPA’s 2016
, which found 41 percent of clients listing it as a top
concern. This is likely due to the economy’s steady improvement over the
last few years, with the stock market continuing to climb despite
volatility. Clients worried about maintaining their current lifestyle
and spending level (28 percent) in retirement was a close second
financial concern. Stress from rising health care costs (18 percent) was
a distant third. However, with medical costs forecast to continue
growing throughout 2019,
it is not surprising that this concern is up 7 percentage points from

“There’s been a relatively steady increase in asset values over the last
few years. This, in turn, has led to stronger client balance sheets and
presumably increased confidence that their money will continue working
for them well into retirement,” said Michael Landsberg, CPA/PFS member
of the AICPA Personal Financial Planning Executive Committee. “Of
course, all of this can change which is why it is important to revisit
asset allocation, make appropriate adjustments and ensure your savings
and investments will be able to fund the lifestyle you envision in

Nearly half (48 percent) of clients have expressed concerns about
outliving their money, according to the survey. Interestingly, that
outweighs the 39 percent of planners who have concerns about their
clients outliving their money. This underscores the extent to which even
well-positioned clients are stressed over the prospect they’ll outlive
their cash. When asked about the top three sources of client financial
and emotional stress concerning outliving their money, healthcare costs
(77 percent), market fluctuations (53 percent) and unexpected costs (50
percent) were cited as the top issues. Additional causes for financial
stress include lifestyle expenses (42 percent), the possibility of being
a financial burden on their relatives (22 percent) and the desire to
leave an inheritance for their children (21 percent).

“A sophisticated financial plan takes into account both the client’s
financial and emotional concerns,” said Andrea Millar, CPA/PFS,
Association of International Certified Professional Accountants Director
of Financial Planning. “To mitigate the fear of the unknown, CPA
financial planners map out a wide range of future scenarios, establish
long term goals and work with their clients to ensure they have adequate
coverage to cover the healthcare costs that may crop up in their
retirement ahead.”

Even with adequate planning, retirement becomes more complicated as
clients age. In fact, 57 percent of CPAs are seeing long term care
issues impact their clients’ retirement planning more frequently than
they did five years ago. Only one percent saw this issue crop up less
often, with 42 percent saying they had not seen a change. Fifty percent
of CPAs saw an increase in clients taking care of aging relatives, with
only 3 percent seeing this issue less often, and 47 percent saying about
the same as five years ago. The survey also found 45 percent of CPAs
citing diminished capacity as an issue impacting clients’ retirement
planning more often (3 percent less often, 53 percent about the same)
than five years ago.

Collectively, these issues demonstrate the competing challenges
individuals face when planning for their retirement and the need for
expert planning advice to meet their goals. On a positive note, as the
labor market has continued to improve more than a third (36 percent) of
CPAs said job loss is impacting their clients’ retirement planning less
often compared to five years ago (55 percent about the same, 9 percent
more often).

“It is incumbent on financial planners to act sooner than later when
planning for their client’s late retirement years. Particularly, they
should address client concerns about long-term care and the prospect of
diminished capacity to ensure their clients wishes will be carried out,”
added Millar.

Despite a number of concerns, the overall retirement picture for clients
of CPA financial planners is improving. When asked to compare their
clients’ current situation to five years ago, half of CPA financial
planners (50 percent) say their clients have more confidence they’re
ready for retirement. That outweighs the third (33 percent) that stated
they find their clients to be less confident. Another 17 percent saw no

To help Americans feel more confident about their retirement
readiness, members of the American Institute of CPAs’ Personal Financial
Planning Executive Committee have put together these 5 tips:

1. Don’t Wait, Explore Long Term Care Coverage Early.

As individuals are living longer lives, having a plan in place for a
serious illness or incapacity is critical for maintaining peace of mind.
Individuals should first consider all the options available for dealing
with prolonged medical and personal care in a way that accomplishes
their goals within the constraints of their financial situation.
Individuals should compare the relevant options such as traditional
long-term care insurance, hybrid long term care insurance, Medicaid
options, or self-insuring. However, they should not wait to explore
coverage options. Applicants over 70 years old run an increased risk of
being denied long-term care insurance due to health issues.

2. Don’t Look at Your Portfolio Too Often.

In any given year, the stock market has an approximately 70% chance of
going up in value. However, on a daily basis that likelihood decreases
to approximately 53%. Just understand that markets will fluctuate wildly
in both directions but have historically gone up over long periods of
time. Checking your portfolio daily can tempt investors to make
short-sighted decisions that can easily derail an otherwise sound
portfolio allocation.

3. Ramp up Savings by Taking Advantage of Catch-Up Contributions Once
Age 50.

Catch-up contributions are a great strategy for those who are age 50 and
over and looking to secure the likelihood of a successful retirement.
Individuals age 50 and over can make an additional $6,000 contribution
to their 401(k) or most other employer-sponsored retirement plans for
2019. For IRAs, an individual can contribute an additional $1,000.

4. Have a Tax-Efficient Drawdown Strategy.

Be sure to have a plan for how to best consume retirement savings
tax-efficiently in retirement. Without thoughtful planning, taxes can
take a hefty bite out of cash flow and that’s especially painful when
living on a fixed income in retirement. It’s critical to be mindful of
retirement withdrawals bouncing you into a higher tax bracket, affecting
taxes on Social Security benefits, and triggering higher capital gains
taxes and other adverse tax consequences.

5. Plan to Pay off or Pay down Debt Before Retirement.

As individuals enter retirement and reach the end of the accumulation
phase of their life, the continued use of debt should be revisited. Debt
is generally unfavorable for individuals in retirement as it hurts their
cash flow. Managing cash flow is critical because retirees typically
live on a fixed income derived from their investment portfolio, social
security, and pension plans. When approaching retirement, it is prudent
to review all outstanding liabilities and decide whether any debt should
be paid down or paid off while you still have the financial flexibility
to do so.

Additional PFP Trends Findings:

  • Seven in ten CPA financial planners (70 percent) say they discuss
    their clients’ estate plans with them at least once a year, and nearly
    a quarter (23 percent) do it once every 3-5 years.


The AICPA’s PFP Trends Survey is administered as an online survey to
CPAs who are members of the AICPA Personal Financial Planning Section,
including those holding the CPA/PFS credential. It was conducted from
August 20 through September 24, 2018.

About the AICPA’s PFP Division

The AICPA’s Personal Financial Planning (PFP) Section is the premier
provider of information, tools, advocacy, and guidance for CPAs who
specialize in providing estate, tax, retirement, risk management, and
investment planning advice to individuals, families, and business
owners. The primary objective of the PFP Section is to support its
members by providing resources that enable them to perform valuable PFP
services in the highest professional manner.

CPA financial planners are held to the highest ethical standards and are
uniquely able to integrate their extensive knowledge of tax and business
planning with all areas of personal financial planning to provide
objective and comprehensive guidance for their clients. The AICPA offers
the Personal Financial Specialist (PFS) credential exclusively to CPAs
who have demonstrated their expertise in personal financial planning
through testing, experience and learning.

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member
association representing the CPA profession, with more than 431,000
members in 137 countries and territories, and a history of serving the
public interest since 1887. AICPA members represent many areas of
practice, including business and industry, public practice, government,
education and consulting. The AICPA sets ethical standards for its
members and U.S. auditing standards for private companies, nonprofit
organizations, federal, state and local governments. It develops and
grades the Uniform CPA Examination, offers specialized credentials,
builds the pipeline of future talent and drives professional competency
development to advance the vitality, relevance and quality of the

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and
Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at

About the Association of International Certified Professional

The Association of International Certified Professional Accountants (the
Association) is the most influential body of professional accountants,
combining the strengths of the American Institute of CPAs (AICPA) and
The Chartered Institute of Management Accountants (CIMA) to power
opportunity, trust and prosperity for people, businesses and economies
worldwide. It represents 667,000 members and students across 184
counties and territories in public and management accounting and
advocates for the public interest and business sustainability on current
and emerging issues. With broad reach, rigor and resources, the
Association advances the reputation, employability and quality of CPAs,
CGMAs and accounting and finance professionals globally.

Can an annuity help sidestep Social Security taxes?

Our daily roundup of retirement news your clients may be thinking about.

Can an annuity help me sidestep Social Security taxes?
Annuitizing savings in a taxable account may not be a smart move for seniors who want to avoid the tax bite on their Social Security benefits, according to this opinion article on MarketWatch. Although the earnings in a deferred annuity will be tax-deferred and not included in their adjusted gross income, future withdrawals from the annuity could trigger a bigger tax bill than when the savings had stayed in the taxable account. That’s because the earnings, which are taxable, will have to be withdrawn before the principal, boosting the retirees’ combined income and consequently the portion of Social Security benefits to be subject to income taxes.

Implementation of videoconferencing is intended to serve taxpayers virtually via computers or mobile devices, explains Donna Hansberry, chief of IRS appeals.

Bloomberg News

Can you hedge retirement risk if your employer is Uncle Sam?
While investors will be better avoiding shares of the company that provides them income, experts cannot really say whether those who rely on federal pension should avoid the U.S. stock market and turn to international stocks, according to this article on personal finance website Motley Fool. “The overall principle of factoring your pension into your overall asset allocation definitely makes sense,” says an expert. Another expert points out that most investors are heavily invested in the U.S. stock market and have seen better returns over the past years, as international stocks didn’t perform quite well during the same period.

Retirement in America is too expensive, but it doesn’t have to be
Although the U.S. and Canada faced similar challenges when it comes to retirement security, Canadian policymakers strengthened the main component of their social security program, knowing that building a nest egg could be very costly for their workers, writes a Forbes contributor. Because of this move, workers in Canada face better retirement prospects than their American counterparts, the expert writes. “We should applaud Canadian policymakers for taking decisive action to shore up their basic building block of retirement income. Sadly, the situation in U.S. couldn’t be more different.”

4 things I’m starting to pay for now that I won’t need until I’m 65
Before turning 30, a young professional developed a four-step game plan that would help her achieve financial security in the future, according to this article on Bankrate. The plan includes saving in a 401(k) plan, buying life and long-term care insurance policies, and setting up a personal savings account, she writes. “I started funding things like retirement accounts and paying for insurance that I likely wouldn’t need or benefit from until after turning 65, giving me 35 years to grow my retirement nest egg and protect myself from the unexpected.”

Lee Conrad

Ron Carson’s firm accused in $500,000 arbitration claim of overcharging clients

One of the most influential advisors in the wealth management industry faces a client arbitration claim seeking at least $500,000 in damages.

CWM — Ron Carson’s RIA entity, also known as Carson Wealth — improperly notified a product sponsor that a client had left the firm and, as a result, the client was overcharged fees, according to allegations in an arbitration case listed on FINRA BrokerCheck. In addition, the client claims “CWM’s investment advisory fees were excessive.”

This is the first regulatory ding for Carson — who decided to drop his FINRA license effective Jan. 31 — in almost 15 years.

Like many advisory firms, the Omaha, Nebraska-based RIA had negotiated with product sponsors to charge its clients lower fees than the general public. However, CWM “improperly notified a product sponsor that the client was no longer a client of CWM, resulting in the client being charged the product sponsor’s standard fees (instead of the lower negotiated rate),” according to the allegation on BrokerCheck. “As a result, the client claims that it was overcharged fees by the product sponsor.”

Ron Carson at Carson Group's airport hangar in Omaha, Nebraska.

Ron Carson is the founder of Carson Group.

The complaint was filed Dec. 24 and has not been previously reported. BrokerCheck does not list a response from Carson.

“For clarification, Carson, in fact, negotiated on the client’s behalf to save the client millions — not cost the client, as stated in the dispute,” Ron Carson said in an emailed statement. “The firm never received any of the aforementioned fees from the client, a sponsor, or any other third party in exchange for services and, by negotiating great terms, actually made the client millions of dollars on their investment.”

Asked whether other client accounts may have been similarly affected, a representative for CWM declined to comment.

The claim is the first against Carson since he left LPL Financial for Cetera Advisor Networks at the beginning of 2017.

In a March 2004 complaint, clients filed an arbitration claim alleging their mutual funds were “unsuitable and not properly diversified,” according to BrokerCheck. The clients later withdrew the claim; the reasons for the withdrawal were not disclosed. Carson strongly denied the allegations at the time, according to the reply he posted online on his BrokerCheck record.

In February of the same year, former clients of Carson won compensatory damages of $50,000 from an arbitration case filed in 2002 seeking $12 million. The case accused Carson and LPL of negligence, negligent supervision, misrepresentations, breach of contract and other claims. The case involved “action taken or not taken regarding Level 3 stock and Level 3 option positions,” the award document shows.

Last year brought the strongest-ever growth for Carson’s operations, which added a record 49 new practices. An office of supervisory jurisdiction, Carson Wealth has grown to 96 partner firms serving more than 22,000 households. Advisors with $4.4 billion in client assets signed agreements to join Carson’s OSJ in the fourth quarter, bringing its total committed client assets for the year to $7.5 billion, according to the firm. Separately, more than 1,285 practices have joined Carson’s advisor coaching network.

Jessica Mathews

Retirees in Relationships Have Fewer Financial Planning Regrets, Data Shows

The road to retirement is often paved with financial blunders that cause many seniors to enter their golden years grossly unprepared. But new data from Global Atlantic Financial Group reveals that couples apparently have an edge over singles on the retirement planning front.

Only 49% of retirees who are in relationships have regrets about planning for their golden years, compared with 64% of single retirees. Specifically, 45% of singles regret not saving adequately, whereas only 30% of couples say the same.


Not only do couples have fewer regrets than singles, but they’ve also been better able to maintain their lifestyles in retirement. Singles, by contrast, are more likely to be forced to cut back on discretionary expenses.

If you’re heading toward retirement on your own, it pays to focus on planning so you’re not left regretting your missteps later on. Here are a few specifics to check off your list.

1. Start saving early on

The benefit of being in a couple is having multiple sources of retirement income to tap, whether it’s different IRAs, 401(k)s, pensions, or Social Security benefits. When you’re single, however, it’s on you to fund your retirement, which is why beginning to save from an early age is key.

Check out the following table, which shows what your savings balance might grow to if you were to fund a retirement plan over a 35-year period:


Socking away $600 a month over three and a half decades will leave you with nearly $1 million for retirement. And if you’re wondering about the 7% return above, it’s actually a few percentage points below the stock market’s average, which means that if you invest your retirement savings heavily in stocks (which you should feel comfortable doing if you’re looking at a 35-year window), you might do that well, if not better.

2. Plan on maximizing Social Security

Unless you manage to save a bundle during your career, you might end up quite reliant on Social Security during your golden years. And if that’s the case, you’ll want to make the most of your benefits.

To do so, first make sure you have a 35-year work history. That’s the time frame your benefits will be based on, and if you don’t have a full 35 years of work under your belt, you’ll have a $0 factored into your personal benefits equation for each year missing an income.

Next, be sure to hold off on filing for Social Security until full retirement age or beyond. That age is 67 if you were born in 1960 or later. Claiming benefits at full retirement age ensures that you get the full amount each month that your earnings history entitles you to, while delaying benefits past full retirement age boosts them by 8% a year up until you reach 70.

3. Talk to a financial advisor

When you’re part of a couple, you have another person to bounce ideas off and run different retirement scenarios by. When you’re single, you’re probably the only one keeping tabs on your savings, investments, and various assets, and that, frankly, is a lot of pressure. A good idea, therefore, is to enlist the help of a financial advisor, especially if you have doubts about whether you’re on track for retirement or not.

A financial advisor can help you map out a savings and investment strategy during your working years so that you’re not just winging it like so many people do. At the same time, that person can help ensure that you have the right financial protections in place for when your golden years arrive. For example, if you’re single, it pays to invest in long-term care insurance, the logic being that if you’re on your own and fall ill or get hurt, you won’t have a live-in caregiver like someone in a couple would potentially have.

The last thing you want to do is retire and bemoan the mistakes you made along the way. If you’re single, it’s especially crucial that you save consistently from an early age and make the most of your Social Security benefits. At the same time, consider enlisting the help of a professional who can help you navigate some of life’s tougher financial decisions — because while you might live alone, you don’t need to plan for retirement all by yourself.