Author: George Mentz

Global  Job Tools and Technology

If you are  one of the millions of  Americans that is out of work right now, then you are probably wondering how to secure a good job or a better job in these difficult times.  Further, it is time to think outside of the box and to think BIG.    With over 7 billion people on this planet, this means that the United States of America is just one small group of consumers within a growing global marketplace

With regard to stakeholders and economics, all firms must have profits so they can pay their employees, reward the risk-taking owners and investors,  grow and innovate,  and contribute to local communities with charity.   We are a global economy, and  at this time the international demographics and consumption are changing very quickly.  As for consumers, we have 1 billion people in India, more than a billion in China, about a billion in Arabia, a huge emerging market in Africa, another  billion or so consumers in greater Asia which includes Malaysia and Indonesia, and then there are the nations of Europe and the Eastern-European nations. Similarly, there are 20 Latin nations south of the USA.

As an example of 21st century sales at a local level, I recently walked into a local used bookstore and asked the owner who their customers were.  She replied that 95% of her customers were outside of the city with many out of the country.  I was in shock and this information speaks volumes about  this global web economy.  Whether she was using EBay or other online tools to sell, her small-town antique and vintage books were available to a global marketplace which  included people who really wanted what she was selling.   Moreover, these buyers were willing to pay top dollar.

Using this tiny case study as an example, we see that utilizing the web to promote your company or resume is the number one way to secure new jobs or new business.  This is real-time global marketing that works for you 24 hours a day and seven days a week for the end user who now searches for products and services using their home computer or phone.

As individuals and businesses, how do we optimize opportunities around the world?    For starters, there are various ways to promote yourself and your brand.  Accordingly, if you are not on the Internet actively promoting your brand through websites and social media, then you have already put yourself into  a 21st century disadvantage.

Virtual Resume Marketing Basics

To begin your self-promotion, the  first way to improve your opportunities or  get a better job is to digitally customize  your highest attributes and credentials on your resume for the types of positions that you seek.  The  second method  is to take those attributes and credentials and brand them to the public using various websites, social media, email and other.  The key here is to make sure that interested searchers and parties know about your capabilities and your business excellence.  Further, you must make sure that your Internet presence portrays you in the highest light and in the highest truth.  In the end, it is helping those who are seeking professionals like you.  This takes skill, effort, and creativity.

As a note, an Internet resume is designed somewhat different than a normal resume .  This is because an Internet resume is more of a niche curriculum vitae that targets various types of work.  Typically, your specializations are the way that you will help other companies and other people increase productivity.  In this economy, they way to get paid your highest value is to convey the impression of increase to the other party.  This means that you make sure people understand your worth and why you are indispensible and cost-effective.   Often, it takes time and some writing to clarify the ways in which you can help others improve efficiency, effectiveness and their profits.  Time is money, and if you have the ability to save time for companies and executives, you also become a very important part of their profit center.

Selling your resume, expertise and your products & services to the global marketplace is the best way in which your company will continue to prosper in the future.  Let’s face it, the world has been competing for the American consumers’ dollars for many years. With that being said, this era could be your opportunity to provide excellence to as many customers as possible both in the USA and abroad.  Thus, you need not depend solely on your city, state, province, or region because there are seekers of your wares around the world.  If  you are trying to get a job, you are technically representing your own company, and  you must sell and promote your brand and your name to others who are willing to pay you for your services.  Not only should you sell yourself, your degree, education, or experience, but you must do this with digital-tactics. This means that you must use the most prolific and most searched keywords and key-phrases on your websites, social media and resume.  You do this because if people are searching for a certain product or skill, hopefully your resume and website will contain the correct “search terms” in the correct language to reel in your searcher.  Searchers include:  potential clients, HR executives, recruiters, headhunters, and dealmakers.

Out and In Sourcing – Local and Global

In  theory, there are two simple ways to succeed in the United States.  One  is providing local services that can NOT be outsourced on the ground,  and the other is to is to provide services globally to any customer that is willing to pay.   What is an example of a service that can be outsourced? How about:  home healthcare, electricians, fast food, coffee houses, plumbers, construction, home repair,   or even a local licensed lawyer would be an example.   Keep in mind that many professions can be outsourced. Even professions that people thought were safe are now being partially outsourced.  Examples are  partially outsourced work education, training, accounting or engineering.

Remember some professions that  were traditionally outsourced are moving back to the United States. A  lot of this has to do with technology, software, and robotics where the technology does the work in the United States and the individual worker in the United States controls or maintains the systems so it continues to perform an excellent way.  In essence, this puts thousands of people offshore out of work.  Thus, there is an ebb and flow between what can be done offshore and what can be performed effectively onshore.  To put outsourcing in reverse, many companies are now in-sourcing.  This means that a company like JetBlue or United Airlines may not fire an employee who wants to raise kids at home and the corporation may prefer to keep a 10 year veteran on staff and simply let him work from home and care for kids. Why?  This person has skills and knowledge that is hard to let go and that employee can perform customer service from home very effectively without a commute.

Reviewing Applicants for Jobs – Types of Resumes

In  my time as a hiring and screening representative for major company, I saw hundreds of superb resumes which also show a 21st century shift in appearance.  From my experience, there are two types of resumes now in the United States. The first is a resume of an individual who works for one company loyally who has one job. To be honest, many companies do not allow workers to engage in any outside activities or jobs.    However, this loyal person may be interested in obtaining a new job or work with a different company.

The second type of resume are individuals who I would call multi-preneurs, and these are individuals who typically work for themselves and provide services or products to  several companies in the United States and outside of the country as well.  These people are typically well  credentialed and have expertise in one or several areas that can help companies be productive.  These professionals prefer to work for themselves and not put all their eggs in one basket.  As independent contractors, tax law is also allowing many of them to take larger deductions for health and other office expenses.

Because the present economy is one of the nastiest challenges that we have had in the last hundred years,  there will be vast opportunity in the middle of this chaos;  however, many people may not be able to adapt quickly. Thus, the hustlers will adapt and win in this global market, and those who do not take action may stagnate for months if not years.  However, there is light at the end of the tunnel. If we can target certain jobs and continue to promote ourselves using these Internet secrets, the opportunities will be much larger and abundant.

Now back to the Virtual Resume .

There are several ways to market yourself.  The first is by sending your resume to the name and e-mail addresses of people who are looking for employees or filling certain positions. Since email boxes can be full, it is always good to add their name and your name to the subject line.  As Dale Carnegie said, the name of a person is always music to their ears.  The  second  way to create a resume account is through job networks such as Monster.com or  LinkedIn.com.   The professional network called LinkedIn.com  will actually allow you to create a public profile and resume which is a great way to include a link in your emails for others to see your resume, photo and credentials along with a method for others to connect to you.  The  third is through pure social networks like Facebook.  All of these social networks are ways to build alliances, communication, create friendships or even to  request recommendations.  The  fourth would be using your local knowledge and targeting a local company for employment. The key here is to use word-of-mouth, ask questions, join local associations,  and calling companies by phone.

Every city and town has small offices or boutique firms that may be looking for assistance in the area of customer service, relationship management, or sales or even information technology.  If you want to stay local, you may need to knock on doors until you find the company or person who needs help.  Every  company is in the business of selling, and without marketing and sales, no one will be able to learn about or see what a company has to offer.  It is this reason that companies will always be hiring because they must keep selling to new customers and managing existing relationships.

Online Resume Branding Tips

These rules also applies to your resume and your name brand. Here are some tips for every person out there looking for work.  First, have somebody review your resume who understands the type of work you’re looking for.  Then, make sure that you have this updated resume available on your website, on job search engines and in social networks. Be sure an create a special email address just for your job searches.  In this way, you protect your private account from spam.   Next, make sure you have an updated photograph of yourself that is of good quality.

Be sure that your resume includes all of the skills, degrees, credentials,  training or any other education or experience that you have.  Many people seem to omit relevant skills when they apply for jobs.   An example of that would be a language skill, global selling skill, Internet skills, or  short training course that you may have taken in areas including: compliance, ethics, service, safety, sexual harassment, or sales.  All of these short-term training courses or certificates can add great weight to your resume.

Also, we must know all we can about the companies that we want to work for.  We must further be prepared to answer questions about our strengths weaknesses and ability to provide service for the new company or team that you intend to work for. If you get an interview, you may need to sit down with several people in a department to be interviewed. Thus, the more you are prepared, the better.

Make  sure that your Internet brand and reputation is prolific on the Internet.  If you put your biographical information on all the top social networks you will probably create 2 to 3 search engine pages of links that relate to your resume and image.  These links should  bolster your best qualities. Then, begin targeting your jobs, opening job search accounts and uploading your resume.  There are several  top  job search engines such as:  Monster.com,  Yahoo Jobs, Careerbuilder.com, or Dice.com

To secure the best jobs with the best wages and benefits, we must be able to show how we are better than the rest of the applicants in myriad of ways in which can improve the capacity of the employer.  To do this, we must also find out what the employer is looking for and tailor ourselves for the position that we desire.

Many times, we may need to hone our skills and credentials toward the position that we desire.   This may require reading, learning, achieving licenses, diplomas, professional designations,  or more.  With the fast changing technology, many of us are required to know how to use various software, platforms, or technological methodologies.  With that being said, you may need to have 3 or 4 types of resumes where one specific resume is for sales and the other is for management and so forth.

Jobs and Economic Going Forward

In sum, we all must make the best of ourselves as individuals and invariably it benefits the employer, the organization, and even the community.  We must be willing to promote ourselves with integrity and honesty, but also aggressively.  By doing so, we can find great full time or even part time work.  In this fast-paced economy, we must be nimble and this agility includes communication by phone, email, web, and face-to-face.  Even if we are entrepreneurs or self-employed, we are still working for our clients and customers.

Well this troubling economy improve? Of course it will, and there are millions of jobs available online right now around the world.  This economic situation reminds me of the years when American manufacturing  and mechanics retooled for the “information technology era” that began over 25 years ago.   It may take several years for the world to transcend the global financial crisis but cycles always come and go.    I believe that we are in a process of retooling again, but we must all be mindful of the importance of learning new strategies and tools to serve and contribute on a global scale even more effectively.

Split Dollar Plans—Who’s Paying for that Life Insurance?

Why is This Topic Important to Wealth Managers? This blogticle discusses the general properties as well as taxation of the traditional split dollar plan. It is intended to provide both a review of concepts and refresher of a planning opportunity.

Split dollar insurance is an arrangement generally between an employer and an employee under which the policy benefits are split, and the costs (premiums) may be split. Split dollar plans can also be set up between corporations and shareholders (“shareholder split dollar”) or between parents and their children (“private split dollar”).

Under the traditional plan, the employer pays part of the annual premium equal to the current year’s increase in the cash surrender value of the policy and the employee pays the balance, if any, of the premium. From this basic concept, hybrid plans have evolved; for example, “employer pay all” plans under which the employer pays the entire premium, and level contribution plans under which the employee pays a level amount each year.

If the employee dies while the split dollar plan is in effect, the employer receives from the proceeds an amount equal to the cash value of the policy or at least its premium payments (under a basic plan), and the employee’s beneficiary receives the balance of the proceeds.

It is no secret to wealth managers that split-dollar life insurance arrangements can be a key feature incorporated into executive compensation packages. Beginning in 2001, transitional guidance on the valuation of split-dollar life insurance arrangements was provided in the form of notices and proposed regulations in anticipation of final regulations which were adopted in 2003.

How are the current regulations applied regarding this arrangement?

Under the final regulations issued September 17, 2003, the tax treatment turns on who owns the split-dollar policy.  If the executive owns the policy, the employer’s premium payments are treated as loans to the executive.  Consequently, unless the executive is required to pay the employer interest on the loan at or above the applicable Federal rate (AFR), the executive will be taxed on the difference between the AFR interest and the actual interest.  Verify that the rate of interest being charged is at least AFR.

If the employer is the owner of the split-dollar policy, the employer’s premium payments are treated as providing taxable economic benefits to the executive.   The economic benefits include the executive’s interest in the policy’s accessible cash value and current life insurance protection.

The final split-dollar regulations apply to any split-dollar life insurance arrangement “entered into” after September 17, 2003.  The term “entered into” is defined in 1.61-22(j)(1)(ii) of the regulations.  Under section 1.61-22(j)(2) of the regulations, an arrangement entered into on or before September 17, 2003 that is materially modified after September 17, 2003 is treated as a new arrangement entered into on the date of the modification, and is subject to the final regulations.

Section 1.61-22(j)(2)(ii) of the regulations provides a non-exclusive list of changes that are NOT considered material modifications.

See Tax Facts Q 3793 What is reverse split dollar and how is it taxed? for a discussion of reverse split dollar plans.

Tomorrow’s blogticle will discuss issues surrounding year-end planning preparation.

We invite your opinions and comments by posting them below, or by calling the Panel of Experts.

As corporate employers shift from defined benefit to defined contribution plans, the burden of ensuring retirement income sufficiency has shifted from employer to employee—and most employees are ill-equipped to handle the responsibility.

About 50% of private-sector employees have access to a retirement plan; but access to defined benefit plans has dropped off significantly. In 1980, 83% of those employees were covered by a defined contribution plan. But by 2008, that number had dropped to 31%, leaving about 85% of employees fending for their own retirement security.

In response to employees’ increasing retirement worries, insurance companies and financial services firms have developed new financial products and plan features providing income sufficiency for participants in defined contribution plans.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of retirement studies in Advisor’s Journal, see How Much to Allocate to Annuities: A Critical Analysis (CC 11-109) & How Are IRA Owners Investing Their Money? (CC 11-112).

For in-depth analysis of qualified plans, see Advisor’s Main Library: A—General Introduction to Qualified Plans.

A proposal to impose a “20/20 cap”—the lower of 20% of income or $20,000—on contributions to 401(k)s and other defined contribution plans is making rounds in Washington. Most Americans appreciate the need for Congress to pull out the stops to bridge the budget gap; but do we really want to discourage retirement savings as Social Security continues its inexorable slide toward insolvency?

The National Commission on Fiscal Responsibility and Reform—charged by President Obama with “identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run”—is calling for the 20/20 cap to replace the current dollar limit imposed on contributions to most accounts. The Commission’s proposal would cap aggregate contributions to defined contribution plans to the lower of $20,000 or 20% of income—employer and employee contributions combined.

The proposal also would collapse all defined contribution plans into a single investment vehicle for all employers.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of 401(k)s in Advisor’s Journal, see The Department of Labor Releases Final 401(k) Disclosure Rules (CC 10-82).

For in-depth analysis of qualified plans, see Advisor’s Main Library: Qualified Retirement Plans.

Partners in a partnership and members of an LLC taxed as a partnership cannot have individual SEP IRAs (Simplified Employee Pension Individual Retirement Account) plans, according to the IRS.

Only employers are allowed to maintain SEP plans for their employees. Because partners are employees of the partnership for retirement plan purposes, they cannot have an individual SEP plan. If partners in a partnership wish to utilize a SEP plan, the partnership as an entity must maintain and contribute to the plan for the partners.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of IRAs in Advisor’s Journal, see Qualified Charitable Distributions from an IRA (CC 11-03) & How Are IRA Owners Investing Their Money? (CC 11-112).

For in-depth analysis of SEPs, see Advisor’s Main Library: IRAs and SEPs.

Authors: George Mentz and Prof. William Byrnes

Are you logging long hours? Do you feel like you never leave the office? Answering calls seven days a week? You may be one of the many Americans who can relate to the current employment trends, which after-all haven’t changed much in the last five years.

Weekday v. Weekend Work

For example, recent statistics show that in 2010, 82 percent of employed persons worked on an average weekday, compared with 35 percent on an average weekend day. [1] The data is not much different from 2005 figures which reported, about 83 percent of employed persons worked on an average weekday, compared with 32 percent on an average weekend day. [2]

Interesting the job shortage and subsequent increased job market competition created by the financial crisis did not have a significant impact on the quantity of work for the average worker. In both 2005 and 2010, on average, employed persons worked 7.5 hours on the days they worked. More hours were worked, on average, on weekdays than on weekend days–7.9 hours compared with 5.5 hours, respectively.

Closing the Gender Gap

Are women starting to work more hours as compared to data presented five years ago? The results indicate a positive response. On the days that they worked, employed men worked 41 minutes more than employed women. This difference partly reflects women’s greater likelihood of working part time.

Yet even among full-time workers (those usually working 35 hours or more per week), men worked longer than women–8.2 hours compared with 7.8 hours.

Nevertheless, in 2005, on the days they worked, employed men worked about three-quarters of an hour more than employed women. Another slight deviation showing an equality of working conditions can also be seen among full-time workers (those usually working 35 hours or more per week), in that in 2005 men also worked longer than women—8.3 versus 7.7 hours.

Shift to Flexible Schedules

In 2010, on the days that they worked, 24 percent of employed persons did some or all of their work at home, and 83 percent did some or all of their work at their workplace. Gender did not play a part in this statistic however, as men and women were about equally likely to do some or all of their work at home.

Higher Education and Work from Home

Do those with higher education degrees work more from home? Recent information collected also says yes. On the days that they worked, 36 percent of employed people age 25 and over with a bachelor’s degree or higher did some work at home, compared with only 10 percent of those with less than a high school diploma.

Self-Employed and Work From Home

Most anyone who has ever owned a small business can relate to the fact that their work never stops. The statistics back-up this general contention as reports show these individuals are over 3 times a likely to work from home. In other words, self-employed workers were three times more likely than wage and salary workers to have done some work at home on days worked—64 percent compared with 19 percent.

Employment Going Forward

With over 9 percent unemployment in the summer of 2011, and the most challenging economy in recent history, one can only hope that we are in the “Great Transition’ rather than any type depression.  American’s are retooling, going back to school [3], starting new businesses, and more are working from home using new technology or even  leaving to work abroad.  More and more US Citizens are running small local businesses, and these small businesses, as stated by the SBA,  are the said to be engine of growth in our economy. [4]

We invite your opinions and comments by posting them below, or by calling the Panel of Experts.

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[1] 2010 data obtained from the U.S. Bureau of Labor Statistics–The American Time Use Survey (ATUS) 2010 Summary. http://www.bls.gov/news.release/atus.nr0.htm. Last Accessed 6/23/2010.

[2] 2005 data obtained from the Bureau of Labor Statistics. ATUS. http://www.bls.gov/news.release/archives/atus_07272006.pdf. Last Accessed 6/23/2010.

[3] Study: Online Education Continues Its Meteoric Growth -  by Jeff Greer http://www.usnews.com/education/online-education/articles/2010/01/26/study-online-education-continues-its-meteoric-growth

[4] How important are small businesses to the U.S. economy?  http://www.sba.gov/advocacy/7495/8420

Are you an employee or independent contractor of your firm? If you’re doing business in California and get the classification wrong, you could be in for criminal charges and up to a $25,000 fine.

California State Bill 459—which would impose strict recordkeeping requirements and severe penalties on firms that misclassify employees as independent contractors—passed the state senate on June 2. The bill moved to the Assembly and went on to a hearing at the Assembly Committee on Labor and Employment two weeks later. The bill is expected to come to a vote in the Assembly later this summer.

Under the bill, firms that mischaracterize employees as independent contractors can be subject to fines of up to $25,000. They also will be required to keep records verifying independent contractor status for at least two years or face a fine of $500 per employee and misdemeanor criminal charges.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For in-depth analysis of income taxation, see Advisor’s Main Library: Income Taxes.

Author: George Mentz

Today we explore additional factors which will likely contribute the job growth of personal financial advisors.

Economy

First, the question arises concerning the current financial environment with regards to financial planning. In other words, what negative effect has the financial crisis had on the financial planning market? Some commentators believe the impact is great. [1] The marketplace for private investors has changed significantly since 2008. Many investors are becoming more personally responsible for retirement savings and are seeking advice from professionals.

On the other hand, increased regulation regarding personal financial advisory services has grown over the last 5 years.[2] If this pattern continues personal financial advisors may decide to no longer participate in a market where the cost of compliance is too high. This will also prevent new advisors from entering the field.

Market Entry and Lifestyle

Nevertheless, the generally low barriers of entry into the industry make the position attractive for those seeking employment directly from school or through career transition for a variety of reasons including unemployment.

One report notes that about 30% of personal financial advisors are self-employed, most often operating small firms in urban areas.[3] Moreover, the flexibility in terms of lifestyle that the personal financial advisor enjoys is preferable to some over traditional office employment. Because most personal financial advisors are not traditional employees, work and lifestyle flexibility may attract a new generation of workers.

One global organization, The AAFM American Academy of Financial Management ® says about 20% of their  members are independent or registered investment advisors who provide ‘fee based management” services as compared to commissions on the purchase or sale of stocks, securities, or insurance products.   These wealth managers simply earn a percent of the total assets under management.   The trend for high net worth clients over the last 10 years has been to work with wealth management professionals who can assist with investment management services for the super rich.  The AAFM ® Certification Board of Standards works with an accredited law school in the USA which offers the first graduate law program in wealth management that can lead to a masters degree while similar professional development programs are offered by NYU and Wharton [4]

“Although successful [personal financial advisors] can live quite comfortably, their compensation has typically been below the level of top jobs on Wall Street. As financial industry compensation models reset themselves, however, the relative returns enjoyed by [these advisors] may look more attractive.” [5]

The San Diego Business Journal reported in 2009 that wealth management salaries held steady in the midst of the crisis, ranging from $150,000 to $ 400,000.[6] What’s more, “bidding wars among firms for top advisors are not uncommon” and packages will include “bonuses equaling two or three times the payouts from just a few years ago”. [7]

A great start to finding a career in banking and finance would be searching online with  www.AAFM.eFinancialCareers.com This career portal shows available jobs around the world in finance, banking, investments, hedge funds, risk management, insurance, compliance and more.  [8] Further, an  excellent opportunity to take courses in tax, finance, estates, asset management, wealth management and compliance is to apply to the online graduate program at: http://llmprogram.tjsl.edu

Median annual wages, excluding bonuses, of wage and salary financial analysts were $73,150 in May 2008, which is more than double the national median wage. The middle 50 percent earned between $54,930 and $99,100. The lowest 10 percent earned less than $43,440, and the highest 10 percent earned more than $141,070. Annual performance bonuses are quite common and can be a significant part of their total earnings. [9]

In light of the recent scandals with Bernie Madoff etc., clients and customers should be aware of who their advisor or planner uses as a custodian for  their funds.  Generally speaking, independent advisors should have  a 3^rd party administrator and custodian who protects and holds the assets, provides online account access, and sends the clients statements along with having SIPC insurance protection. Further, your  advisor should be registered with the state or federal government where you can review or check their records. [10]

We invite your opinions and comments by posting them below, or by calling the Panel of Experts including:

George Mentz, JD, MBA -  is an international lawyer, editor, author and contributor in the areas of personal finance, securities law, and wealth management.  Prof. Mentz continues to consult  with the US Government and United Nations on issues related to careers and education. Dr. Mentz is the first person in the US to obtain quad credentialing as a lawyer, Double Accredited MBA, Juris Doctorate Degree, financial consultant certification, and qualified financial planner.  Mentz and his educational & professional development firms have worked with thousands of executives in over 150 countries. Dr. Mentz has taught over 200 business and law courses at various accredited institutions, and he is the founder of the Mentz Consumer Protection, Class Action,  and Securities Law Firm http://securitieslawyers.us Mentz has served on the advisory boards of the: The African Economists Association, The Royal Society of Fellows, The Arab Academy of Banking & Finance, The China Wealth Council, The GFF Global Finance Forum in Switzerland, and the Indian Academy of Financial Management.    Mentz is the winner of several faculty awards and a meritorious award for charitable service.   Mentz has been a pioneer in promoting  accredited program courses, exams and standards as a government recognized  path to professional certification.

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[1] Lindsey Gerdes. “Personal Financial Advisor Among The 10 Most Promising Jobs For Recent Grads?” Bloomberg Business. Posted: April 13, 2009. http://www.businessweek.com/managing/blogs/first_jobs/archives/2009/04/personal_financ.html. Last Accessed 2/24/2010.

[2] E.G., Provisions of the “The Dodd-Frank Wall Street Reform and Consumer Protection Act”.

[3] Financial Analysts and Personal Financial Advisors. Occupational Outlook Handbook, 2010-11 Edition.”  http://www.bls.gov/oco/ocos301.htm

[4] TJSL Graduate Law School Program with AAFM Accredited Certification Program http://llmprogram.tjsl.edu

[5] Ibid.

[6] See Advisorfyi.com-Summit Business Media/The National Underwriter Company. “Wealth Management Employment in the Coming Decade.” Posted October 11th, 2010. http://www.advisorfyi.com/2010/10/wealth-management-employment-in-the-coming-decade/. Last Accessed 5/25/2011.

[7] Helen Kearney. Reuters. “Private banks battling for advisers to super-rich”. 9/17/2010. http://www.reuters.com/article/2010/09/17/idUKN1713016720100917?pageNumber=2. Last Accessed 5/25/2011.

[8] eFinancialCareers.com www.AAFM.eFinancialCareers.com

[9] United States Government  Department of Labor, Bureau of Labor and Statistics, Financial Analysts and Personal Financial Advisors. Occupational Outlook Handbook, 2010-11 Edition.”  http://www.bls.gov/oco/ocos301.htm

[10] SEC Investment Advisor Registration http://www.sec.gov/divisions/investment/iaregulation/regia.htm

By: Dr. George Mentz

This article series discusses the job prospects of personal financial advisors in today’s marketplace. We review the job growth expectations, factors contributing to job growth, comparisons to other industries as well as educational requirement trends for the industry.

Generally, a personal financial advisor/planner usually operates within a bank, brokerage, or insurance firm or on his or her own or in a small firm, many with a client base whose assets do not exceed $1 million. Moreover, personal financial advisors assess the financial needs of individuals and assist them with investments, tax laws, and insurance decisions. Advisors help their clients identify and plan for short-term and long-term goals. Advisors help clients plan for retirement, education expenses, and general investment choices. Many also provide tax advice or sell insurance. Although most planners offer advice on a wide range of topics, some specialize in areas such as retirement and estate planning or risk management.

Personal financial advisors usually work with many clients and often must find their own customers. Many personal financial advisors spend a great deal of their time marketing their services. Many advisors meet potential clients by giving seminars or through business and social networking. Finding clients and building a customer base is one of the most important aspects of becoming a successful financial advisor.

“The [personal financial advisor] position represents one of the most rapidly expanding and least well-known segments in financial planning.” [1]

The most recent Bureau of Labor Statistics project growth in the area of personal financial advisors by 30 percent over the 2008–2018 period. This figure is represents much faster growth percentages than the average for all occupations. [2] CNN Money Reports, “demand for personal financial advisors is projected to grow… 41% between 2006 and 2016.” [3] [4]

Some career oriented companies have published a list of 10 promising jobs for the class of 2009. The top 10 list included personal financial advisors. The list included data provided by the National Association of Colleges and Employers Job Outlook 2009 survey.[5] [6]

However, these figures may actually be an underrepresentation of the real growth of the role of the personal financial advisor. Many accountants and attorneys are expanding their practice to include more financial management services.  Further, females currently comprise roughly  a quarter of all regulated Financial Planners; “[e]ncouragingly, however, their representation in the industry appears to be growing.” [7]

Lastly, Independent financial advisor positions or independent firms continue to grow says Charles Schwab.[8] The vast growth of the independent advisors (outside of the brokerage firm, bank and insurance firm) has been supported by the growth of the technology that allows individuals and small firms to manage client investments.   We will continue this series with a discussion of factors causing job growth in the industry. Please check back soon for more updates.

A great start to finding a career in banking and finance would be searching online with  www.AAFM.eFinancialCareers.com This career portal shows available jobs around the world in finance, banking, investments, hedge funds, risk management, insurance, compliance and more.  [9]

A excellent opportunity to take courses in tax, finance, estates, asset management, wealth management and compliance is to apply to the online graduate program at: http://llmprogram.tjsl.edu

George Mentz, JD, MBA -  is an international lawyer, editor, author and contributor in the areas of personal finance, securities law, and wealth management.  Prof. Mentz continues to consult  with the US Government and United Nations on issues related to careers and education. Dr. Mentz is the first person in the US to obtain quad credentialing as a lawyer, Double Accredited MBA, Juris Doctorate Degree, financial consultant certification, and qualified financial planner.  Mentz and his educational & professional development firms have worked with thousands of executives in over 150 countries. Dr. Mentz has taught over 200 business and law courses at various accredited institutions, and he is the founder of the Mentz Consumer Protection, Class Action,  and Securities Law Firm http://securitieslawyers.us Mentz has served on the advisory boards of the: The African Economists Association, The Royal Society of Fellows, The Arab Academy of Banking & Finance, The China Wealth Council, The GFF Global Finance Forum in Switzerland, and the Indian Academy of Financial Management.    Mentz is the winner of several faculty awards and a meritorious award for charitable service.   Mentz has been a pioneer in promoting  accredited program courses, exams and standards as a government recognized  path to professional certification.

We invite your opinions and comments by posting them below, or by calling the Panel of Experts.

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[1] Dan Olsen. “Personal Financial Planning: Making the Transition”. The Finance Professionals Post. New York Society of Security Analysts.” 2/24/2011. http://post.nyssa.org/nyssa-news/2011/02/personal-finance-planning-making-the-transition.html. Last Accessed 5/25/2011.

[2] Bureau of Labor Statistics. United States Department of Labor. “Occupational Outlook Handbook, 2010-11 Edition-Personal Financial Advisors”. Last Modified Date: December 17, 2009. http://www.bls.gov/oco/ocos302.htm. Last Accessed 5/24/2011.

[3] CNN Money. “Most Job Growth-Personal Financial Advisor”. 2009. http://money.cnn.com/galleries/2009/moneymag/0910/gallery.bestjobs_jobgrowth.moneymag/3.html. Last Accessed 5/24/2011; See also Bureau of Labor Statistics, United States Department of Labor, 2007 (last updated December 18, 2007). ”Financial Analysts and Personal Financial Advisors. Occupational Outlook Handbook, 2008-09 Edition.”

[4] United States Government  Department of Labor, Bureau of Labor and Statistics, Financial Analysts and Personal Financial Advisors. Occupational Outlook Handbook, 2010-11 Edition.”  http://www.bls.gov/oco/ocos301.htm

[5] Lindsey Gerdes. “Personal Financial Advisor Among The 10 Most Promising Jobs For Recent Grads?” Bloomberg Business. Posted: April 13, 2009. http://www.businessweek.com/managing/blogs/first_jobs/archives/2009/04/personal_financ.html. Last Accessed 2/24/2010.

[6] ABC News/Money – “ Book: Financial Planner is Best Job” – http://abcnews.go.com/Business/story?id=89423&page=1

[7] Dan Olsen. “Personal Financial Planning: Making the Transition”.

[8] Independent Investment Advisors in Growth Mode, Says 2010 Charles Schwab RIA Benchmarking Study   http://www.businesswire.com/news/home/20100707005637/en/Independent-Investment-Advisors-Growth-Mode-2010-Charles Published July 07, 2010

[9] eFinancialCareers.com www.AAFM.eFinancialCareers.com

Why is this Topic Important to Wealth Managers? In this edition we present a discussion of the 60 day rollover provisions for retirement accounts. Sometimes the transaction does not always go as planned. Thus wealth managers should be aware of unique situations that apply to traditional planning circumstances.

Can a widow rollover, past the 60 day statutory window, distributions from an employee trust to an IRA on behalf of a husband who passed away mid-transaction? The IRS has recently said no. [1]

In a private letter ruling issued last week the Service determined that since the widow had funds in a joint account with her husband who later passed away that she was precluded from rolling over that amount to a tax advantaged arrangement in her name.

Widow’s husband received a distribution from an Employee Retirement Plan totaling Amount X. The Widow asserts that the failure to accomplish a rollover within the 60-day period prescribed by section 402(c)(3) was due to the fact that her husband entered the hospital and passed away during the 60-day period.

The husband had ended his employment earlier in the year. Unbeknownst to him, the plan had a “cash out” provision that mandated complete distribution of plan assets upon the participant’s attainment of 65 years of age. The husband then received a check, and initiated arrangements to move the funds to an individual retirement account in order to maintain the funds in a tax free vehicle. In the meantime, the husband had deposited the funds into a joint account with his wife. Between the time of the distribution from the plan and his scheduled rollover, the husband became ill and passed away. The widow sought to complete the rollover intended by her husband.

Generally, if any portion of the balance to the credit of an employee in a qualified trust is paid to the employee in an eligible rollover distribution, and the distributee transfers any portion of the property received in such distribution to an eligible retirement plan, then such distribution (to the extent transferred) shall not be includible in gross income for the taxable year in which paid. [2]

The Code states that such rollover must be accomplished within 60 days following the day on which the distributee received the property. An individual retirement account (IRA) constitutes one form of eligible retirement plan. [3]

The Code however allows a waiver by the Secretary where the failure to waive such requirement would be against equity or good conscience, including casualty, disaster, or other events beyond the reasonable control of the individual subject to such requirement.[4]

Moreover, the Code provides that if any distribution attributable to an employee is paid to the spouse of the employee after the employee’s death, the preceding provisions of this subsection will apply as if the spouse was the employee. [5]

In addition, when determining whether to grant a waiver of the 60-day rollover requirement pursuant to section 402(c)(3) of the Code, the Service will consider all relevant facts and circumstances, including: (1) errors committed by a financial institution; (2) inability to complete a rollover due to death, disability, hospitalization, incarceration, restrictions imposed by a foreign country or postal error, (3) the use of the amount distributed (for example, in the case of payment by check, whether the check was cashed); and (4) the time elapsed since the distribution occurred.[6]

The Service held in summary that because the husband is now deceased, it is impossible for him to complete the proposed transaction. Since the amount was received by the husband from the retirement plan prior to his death, his wife (widow) was precluded from rolling the funds over into a tax-deferred account in her name under section 402(c)(9) of the Code.

Tomorrow’s blogticle will discuss tax and market issues relating to wealth management.

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

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[1] Private Letter Ruling 201123048.

[2] IRC Section 402(c).

[3] IRC Section 402(c)(3)(A).

[4] IRC Section 402(c)(3)(B).

[5] IRC Section 402(c)(9).

[6] See Rev. Proc. 2003-16, 2003-4 I.R.B. 359, (January 27, 2003).