:: IN THIS ISSUE ::

Question of the Week

Where can I find the current and archived Inside Information newsletters? The November Bob Veres Inside Information newsletter is now available on the PFP website. Bob's newsletter was introduced last month as a FREE benefit to all PFP Section members and PFS Credential holders. Click here to view this month's newsletter and access archived September and October issues.

November Media Reviews from Bob Veres

Bob Veres Media Reviews service will save you hours of reading each week, by summarizing the contents of three or four professional magazines each month, with direct links so you can go straight to the articles that interest you. You stay on top of everything in that pile of magazines next to your desk. Two November editions of Media Reviews are now available. Click here to access.

2009 PFS Exam and Case Study
LAST REMINDER TO REGISTER

The program takes place December 7th through 10th outside of Dallas. Click here to learn more and register now. Registration closes November 24th. The deadline to submit your sponsorship application has been extended to November 24th.

Forefield Alerts

To read more, click on the titles above or visit the PFP Center homepage at aicpa.org/PFP. Click on the icon that reads "Forefield Advisor". You will be prompted to enter your PFP Center web site user identification and password, at which time you will be taken directly to the Forefield homepage to read these alerts.

Update on "Red Flags" Rule

On November 10th, the AICPA filed a lawsuit in U.S. District Court for the District of Columbia seeking an injunction barring the Federal Trade Commission from applying its "Red Flags" rule, which would impose onerous and unnecessary requirements on its members. The FTC's "Red Flags" rule was designed to help prevent identity theft and was promulgated under the Fair and Accurate Credit Transactions Act of 2003. "We do not believe there is any reasonably foreseeable risk of identity theft when CPA clients are billed for services rendered," said AICPA President and CEO Barry Melancon, CPA. "As trusted advisors, CPAs are personally acquainted with their clients and already adhere to strict privacy requirements governing identifying information." Enforcement of the rule has been delayed several times, most recently from Nov. 1, 2009, to June 1, 2010. Read the AICPA complaint and news release. Also, in anticipation of the enforcement, the AICPA developed a practice guide for members, which provides guidance on developing an Identity Theft Prevention Program (ITPP) as required by the FTC's "Red Flags" Rule.

Welcome to PFP Community News, providing you with exclusive access to PFP member communications.

:: PFP NEWS AND COMMUNICATIONS ::

November/December Planner Now Available

As we near January 2010, nearly all of your clients will (or should) be asking whether they should convert a traditional IRA to a Roth IRA. Therefore, it is critical that you understand the concepts and calculations required to help clients determine whether to convert, which IRAs to convert, and how much to convert. In the lead article of the November/December issue of Planner, IRA expert Robert Keebler provides you with a wealth of information about IRA conversion and recharacterization. Topics include: The Four Kinds of Roth Conversions, Factors to Consider Before Converting, Incremental Roth IRA Conversion Theory, Roth IRA Segregated Conversion Strategy and Determining the Proper Amount to Convert.

Don't miss the additional, in depth Roth IRA conversion articles that will be posted along with The Planner on the PFP Section's website. To access other Roth resources, click here.

In this issue you'll also find a letter from Michael Goodman, chair of the 2010 AICPA Personal Financial Planning Conference (January 17th through 20th in Orlando). Goodman reveals some of the speakers and topics he's most excited about and emphasizes the importance of sharing with your colleagues your experiences from the last, tumultuous year.

To read more on these articles and other topics, you can access the November/December Planner here. Find archived issues here.

Regulatory Update

Over the past week, developments on the topic of financial services regulatory reform have continued to unfold. As reported in the last several PFP Community News communications, important pieces of legislation of impact to the financial planning profession have been approved by the House Financial Services Committee (HFSC) and await vote by the full House. In the meantime, the Senate Banking Committee Chairman Christopher Dodd (D-CT) released, on November 10th, a discussion draft of the Senate’s version of financial services regulatory reform in the form of a bill entitled Restoring American Financial Stability Act of 2009 ("Act"). An amended version is expected this week, with a mark up beginning in December. Key areas of interest to the financial planning community include the following:

• Removal of the broker-dealer exclusion: The HFSC's version of the Investor Protection Act would require any broker-dealer, when providing investment advice to retail customers, to adhere to a fiduciary standard of care. In comparison, the Senate bill is much more sweeping. Under section 913, the Adviser's Act would be amended so as to remove the broker-dealer exclusion of section 202(a)(11). Simply stated, any broker-dealer providing investment advice would have to register as an investment adviser and thus would be subject to the prevailing duty of care (of a fiduciary). There would be no ability to claim that investment advice is "solely incidental."
• AUM threshold for investment advisers: Under section 410 of the Act, Section 203A(a)(1)(A) of the Investment Advisers Act of 1940 would be amended such that the assets under management (AUM) threshold for registration with the SEC would be raised from $25 million to $100 million. This is similar to the Investor Protection Act, as amended by the HFSC.
• Custody of client assets: Under the current regulatory landscape, all investment advisers must utilize a "qualified custodian" – independent or affiliated – to custody client assets. Under the Act, the 1940 Advisers Act would be amended to require that the SEC establish rules which would require investment advisers to use an independent custodian to hold client assets "where necessary and appropriate in the public interest and for the protection of investors" – see section 223 of the Act, p. 302 of the discussion draft, which can be located on the Senate Banking Committee's website, here. By comparison, the HFSC's version of the Investor Protection Act would dictate the use of an affiliate when AUM exceeds $10 million.
• Consumer Financial Protection Agency (CFPA): Dodd's bill creates, in title X of the Act, an agency to oversee "financial activities", with an exemption for CPAs similar to the exemption contained in the HFSC bill. Also similar to the HFSC version is a separate exemption for persons subject to state or SEC regulatory oversight (i.e., investment advisers, broker-dealers and the representatives of each).

New Law Includes Mandatory E-Filing

Congress has passed the Senate version of (H.R. 3548) the Worker, Homeownership, and Business Assistance Act of 2009, and the President signed the bill into law (P.L. 111-92) on November 6th, 2009. Among other things, the law requires e-filing of income tax returns for individuals, estates, and trusts for returns filed after December 31, 2010. A preparer who reasonably expects to file 10 or fewer of these returns during the calendar year would not be required to e-file. Some states already mandate e-filing of individual returns, and practitioners there have made the shift for Federal returns as well. Until now, the IRS has provided incentives, rather than mandating e-filing for individual returns, an approach supported by the AICPA.

Aging Client Survey

We need your input. Please take this survey if you or your clients are dealing with aging family issues or are age 50 or older. Click here to begin. The PrimePlus/ElderCare Task Force wants to anticipate members' needs as they face these issues with their clients. We will use this information to develop additional resources for our membership. If you provide your contact information, we will share the results with you.