financial planning

Is there a financial equivalent to the maxim “first do no harm?”

What if one of the guiding principles of medicine was applied to the world of financial advice?

What would the financial services landscape look like if product manufacturers and advisors were required to play by rules similar to those that exist for physicians?

First, my guess is that the financial corollary to the application of primum non nocere (first do no harm) would be:

The Department of Labor has suspended a Bush Administration rule that would have allowed financial advisors to provide investment advice to their 401k customers.

The Pension and Protection Act of 2006 contains a provision that allows financial advisors who manage company 401k plans to provide investment guidance to the 401k plan participants.

A recent Wall Street Journal article discusses the renewed focus on conservative and rather boring investment options among the wealth management community.

In the wake of extreme capital market volatility during the past couple of years, wealth managers have returned to basics in their discussions with current and prospective clients.

Among the more mundane options that are frequently discussed are:

Although mentioned previously, it is worth noting again that Moshe Milevsky is the most active, creative and interesting voice in the asset decumulation industry.

Moshe produces copious amounts of outstanding materials that shed light on the world of annuities for both professional and consumer audiences.

There is an interesting and worthwhile article in Financial Planning that discusses the post-financial crisis retirement landscape.

The author draws a picture of a new set of retirement norms for Baby Boomers and the generation following Boomers.

Issues addressed include:

• Longevity.
• The financial crisis' impact on retirement planning.
• Sequence of returns risk.
• Social Security.
• Use of annuities.
• Employment in retirement.
• Recreation in retirement.

Source: Financial Planning

The income limits on Roth IRAs will change in 2010.

Current restrictions on Roth IRAs are set at $105,000 for singles and $166,000 for couples.

Removal of these restrictions will open-up a much wider market for Roth IRAs.

Higher income earners will simply need to establish a conventional IRA and then convert to a Roth.  Taxes due on the conversion can be paid over the course of 2011 and 2012 rather than at once in 2010.

Source: Investment News

Morningstar's Director of Personal Finance writes about the factors that are within an individual's control and therefore manageable through good planning.

The economy and stock market movements are not on the list.

Prudent risk management in retirement is on the list.  The items that fall into the risk management category include:

• Longevity risk.
• Long-term care.
• Inflation.
• Regulatory risk and higher taxes.

Longevity annuities are discussed in the context of longevity risk.

Sheryl Garrett is the founder of the Garrett Planning Network.

The Garrett Network consists of approximately 300 financial advisors who provide services on a fee-only basis and act as fiduciaries.

Read on to understand how and why the Garrett Network seeks to make objective, competent financial planning services widely available.

Annuity Digest: Why would your everyday consumer of financial services be interested in The Garrett Network—what is the basic value proposition? 

Evan Cooper writes that investing is less relevant to a comfortable retirement than most people think.

Appropriate levels of saving and spending are the real drivers of adequate retirement resources.

Not necessarily something that the asset management and accumulation industry wants to acknowledge, but the views expressed make perfect sense.

The Wall Street Journal reports that more people are turning to accountants for the type of advice typically provided by financial planners and investment advisors.

Accountants are justifiably seen as sources of prudent, objective and professional financial advice.

These "boring" qualities are in higher demand in the wake of the financial crisis and market meltdown.

The American Institute of CPAs reported a 25% increase in of CPAs with Personal Finance Specialist credentials in the past five years.

Source: Wall Street Journal