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In the News: Clients Increasingly Turn to CPAs for Financial Planning

Financial planning consultation

While economic uncertainty persists and conflicting economic indicators make predicting the progress of the recovery tough, stocks have been on the rise since late 2011. With the Dow crossing the 13,000 threshold earlier this week, many investors may be considering a return to the market. Before making any important financial decision, it’s essential to develop a plan that addresses the specific situation and ensures alignment with one’s goals for the future. As a number of recent news articles below demonstrate, individuals are increasingly turning to their CPA for help making investment decisions and planning their financial future, and the AICPA is ensuring that CPAs have the tools they need to best advise their clients.

Investment News reports that, as a result of increased demand from their clients, more CPAs than ever before are offering financial planning services. CPAs, who are trusted advisors to their clients, may have an advantage on other investment professionals. “We're in a natural position of trust with clients to expand into financial planning,” said Lyle Benson, CPA/PFS, of the executive committee of the AICPA's Personal Financial Planning section. The economic conditions in the U.S. have only added to the perception that CPAs are one of the best options for financial planning, and the AICPA is ensuring that members who wish to expand their financial planning services have the resources they need. “With the uncertain times, our members are seeing a lot more demand from clients for financial planning services,” said Andrea Millar, CPA/PFS, senior technical manager of the AICPA’s Personal Financial Planning section. “In recent years, we've expanded our efforts to help them add that to their practices.”

Palm Springs Life spoke to Michael Eisenberg, CPA/PFS, of the AICPA’s Financial Literacy Commission about the challenges high net worth individuals face due to uncertainty in the estate tax law. The federal estate tax is currently at 35 percent, with an exemption of $5 million per individual and $10 million for married couples. Eisenberg educates clients on the option of taking advantage of the $5 million lifetime exemption while it lasts. While new legislation is not expected until after the November election, many experts have speculated that estate taxes may revert back to 2001-2002 levels, with a $1 million exemption per individual and $2 million per married couple taxed at 55 percent. “The new normal is not good, because the estate law is in flux and Congress has made it very difficult to plan,” says Eisenberg. “It’s important to understand that you are giving up those assets, realizing they are no longer yours to control once they are out of your estate. Meet with estate planning professionals to understand your current circumstances, and keep your eyes and ears open to what is happening in Washington.”

Michael Goodman, CPA/PFS, responded to a reader’s question in Money Magazine about the best way to save for retirement if you’ve maxed out your 401(k) contribution. Goodman suggests looking into purchasing tax-efficient funds, such as stock indexes and muni bonds, in taxable accounts. He explains that splitting your money between Roth IRAs, 401(k)s and taxable accounts, will give you more flexibility and increased options for tax-smart withdrawals once you’ve retired. And as a wise man once said, options are a beautiful thing.

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