Financial Planning Coalition Says Investment Adviser SRO Legislation Offers Wrong Solution to Increase Investor Protections - YAHOO! Financial Planning Coalition Says Investment Adviser SRO Legislation Offers Wrong Solution to Increase Investor Protections - YAHOO!

Wednesday, June 6, 2012

Financial Planning Coalition Says Investment Adviser SRO Legislation Offers Wrong Solution to Increase Investor Protections - YAHOO!

Financial Planning Coalition Says Investment Adviser SRO Legislation Offers Wrong Solution to Increase Investor Protections - YAHOO!


Legislation would harm small businesses; better options available

WASHINGTON, June 6, 2012 /PRNewswire-USNewswire/ -- The Financial Planning Coalition today said in a prepared statement that the Investment Adviser Oversight Act of 2012 (H.R. 4624) would create a new regulatory structure that would lead to fewer investor choices for financial advice and impose a significant regulatory burden and higher costs on small advisory firms.

While the Coalition agrees that more frequent examinations of investment advisers by the Securities and Exchange Commission (SEC) are needed, it said that the proposed legislation "is the wrong solution for this problem," noting that should it become law the broker-dealer governed Financial Industry Regulatory Authority (FINRA) - which has no experience overseeing investment advisers - would most likely become the SRO.

The Coalition -- comprised of the Certified Financial Planner Board of Standards, Inc., the Financial Planning Association and the National Association of Personal Financial Advisors and representing more than 75,000 stakeholders - urged Members of Congress to reject the SRO approach in the legislation and put in place a solution that will work to "truly protect investors."

"H.R. 4624 is not the right solution for the narrow problem of increasing investment adviser examinations, and it would create many more problems than it purports to resolve," the Coalition wrote. "It would single out small business owners by imposing fees and regulatory burdens on mid- and small-sized advisory firms that are not imposed on large firms. It would impose increased layers of regulation and cost on state registered investment advisers. Finally, it would discourage investment advisers from serving retail clients. In sum, H.R. 4624 would create significant investor protection issues in its efforts to resolve a simple resource gap at the SEC."

Citing a study by The Boston Consulting Group, the Coalition noted that a FINRA SRO would cost an estimated $550 to $610 million a year. This amount includes an estimated $90 to 100 million annually for SEC oversight, which is required by current law. The cost to the SEC of overseeing the SRO alone is comparable to providing the SEC with the incremental resources it needs to increase its examinations of all investment advisers an average of every four years.

Saying it "supports the obvious, simple and much less expensive alternative, which is to enhance the SEC's existing oversight program so that it can examine all SEC-registered investment advisers at least once every four years," the Coalition would support Congress granting the SEC the "authority to assess user fees on all SEC-registered investment advisers."

The Coalition also encouraged Members of Congress to consider solutions that:

    --  would address the SEC's lack of resources with no impact on         taxpayers or the federal deficit,     --  would increase examinations for all investment advisers to an         acceptable level to protect investors,     --  would be the most cost-effective and efficient solution,     --  would not require establishing a whole new regulatory         bureaucracy,     --  would treat large, mid-sized and small investment advisers         consistently,     --  would be supported by investment advisers who have stated a         strong preference for paying user fees to the SEC as an         alternative to a FINRA-IA SRO, and     --  would allow Congress to retain direct oversight and         accountability over the SEC. 

While the legislation is supported in part to protect the public from future Bernard Madoff Ponzi schemes, the Coalition notes in its testimony that Mr. Madoff's firm would likely not have been affected by the legislation because his firm would likely have been exempted from the SRO.

"H.R. 4624 leaves the SEC with examination responsibility for the largest advisory firms without additional resources to examine these firms every four years and with the additional unfunded responsibility to oversee a new SRO," wrote the Coalition. "Such a result would be perverse from a public policy perspective. Under H.R. 4624, smaller investment advisers subject to the new SRO would be examined once every four years. But the larger SEC-only investment advisers, who manage far more assets and affect the lives of far more investors, would be examined at a far lower frequency."

SOURCE Financial Planning Coalition


Black money: Pawar backs Ramdev, says no politics - Hindustan Times
Welcoming Ramdev's campaign against black money, NCP chief and agriculture minister Sharad Pawar on Tuesday said the yoga guru's suggestions to tackle the menace were "pragmatic". Pawar's remarks came after an hour-long meeting with Ramdev here during which the two discussed ways to unearth black money and enact laws that make stashing of cash impossible.

This is a major embarrassment for the Congress, as key UPA ally Sharad Pawar has expressed his support for Baba Ramdev a day after the Prime Minister Manmohan Singh and Congress President Sonia Gandhi hit out at the civil society for targeting the Prime Minister.

"Ramdev made suggestions like enacting such tax laws that do not make a person necessary to hide his wealth. Such wealth can be used for various development purposes," Pawar told reporters after meeting the yoga guru.

The minister said he did not "smell politics" in Ramdev's campaign as he has announced that he will meet leaders of all political parties ranging from Congress chief Sonia Gandhi, CPI(M) general secretary Prakash Karat to AIADMK supremo Jayalalithaa and SP chief Mulayam Singh Yadav.

"He (Ramdev) has said he will meet responsible leaders in all the states and important persons who take key decisions.

He has done one good thing that he has not spoken of any one party. He has talked about all parties and we liked this approach," Pawar said.

Pawar is among the 15 Union ministers against whom Team Anna has leveled allegations of corruptions.

Financial Planners Are Wooing the Unwed - Smart Money

For most couples, marriage provides emotional and financial support -- to say nothing of a guaranteed date on Saturday night. But for retired executive Eric Nathan, it's little more than a musty tradition. The divorced 64-year-old North Carolina resident says he prefers his current arrangement: He has a steady girlfriend with whom he can see himself spending his remaining days, but he maintains his financial independence. The only problem is that the couple may still have a few financial matters they need to think through as, well, a couple. "What if my girlfriend needs to move in with me?" asks Nathan.

That sort of question has given rise to an entire niche industry: Call it financial planning for the kind-of-married. In recent years, financial advisers and estate attorneys have started offering services for unmarried couples -- same-sex or not -- who must deal with the same financial issues as their wedded compatriots but lack the piece of paper that makes the process much simpler. There are big numbers behind the push: Unmarried couples constitute some 6 percent of American households, according to the U.S. Census -- a figure that has risen by a quarter during the past decade. In raw numbers, that translates to nearly 7 million households.

Professionals catering to this group say they can barely keep up with demand. J.T. Hatfield Smith, a vice president of SPC Financial in Rockville, Md., says the number of unwed couples he works with has quadrupled to more than 100 households in the past five years. Others say they're looking for ways to tap into the unmarried pipeline. Attorney and CPA James Lange, owner of Lange Financial Group in Pittsburgh, recently signed up for a one-day legal workshop dedicated to working with this niche. And Gregg Parish, a professor at the College for Financial Planning in Greenwood Village, Colo., says his school recently added an accredited program for advising domestic partners. "It got to the point where financial planners were saying, 'Hey, I don't know what to tell these people,'" he says.

And there's a lot to tell: Married couples can take much for granted, like the ability to transfer assets between spouses without tax implications or the right to assume end-of-life caregiving decisions. But for unmarried couples, there's a range of paperwork -- from trusts (which can cost $1,500 to $5,000 in legal fees to establish) to prenup-style domestic-partnership agreements -- that's required to guarantee the proper protections and cost-saving measures. Otherwise, they could run into problems with issues like, say, whether the surviving partner will be able to remain in the couple's home after the other passes.

But the problem, say experts, is that the issues involved are so complex that even specialists devoted to this type of planning can make mistakes. Estate planning is one potential trouble spot. It's a crucial piece of planning for unmarried couples, because there's no assuming the "spouse" will get what he or she deserves or expects, and yet there are few cookie-cutter solutions for drawing up legal documents for unwed partners, says Lange. And even small planning matters can cause problems, says Hatfield Smith. Take homeowner's insurance: If the property is under only one partner's name, the policy won't necessarily cover the other's personal items.

If there's any takeaway for the kind-of-married, say the pros, it's that even a little planning can go a long way, be it in the form of thousands of dollars saved in taxes or the comfort of knowing you can make medical decisions on a partner's behalf. Of course, for some couples, a marriage blessed by the federal government remains an option -- and there are couples who tie the knot for financial reasons, say advisers and attorneys. But Nathan, the retired executive, doubts he and his girlfriend will ever be one of them: "We're both very protective of our freedom."

Money Tips for Globe-Trotters - CNBC

Credit cards and A.T.M.’s may have eased the challenge of spending and exchanging money on a trip abroad, but that doesn’t mean we don’t occasionally find ourselves in a foreign country, fuming in front of machines that have just rejected our plastic cards. Fortunately, American banks have recently begun issuing credit cards that are more widely accepted around the world. Here are some tips on managing your cards and cash based on my recent trip to Japan and Hong Kong.

Get A Credit Card With a Chip

Many globe-trotting travelers have discovered that American credit cards, with their outdated magnetic stripes, are not always accepted now that most of the world has shifted to cards that use a smart chip instead. While merchants in Asia, Europe and elsewhere are supposed to be able to swipe our vintage plastic, many automated kiosks can’t do that, which can be a problem at train stations and subways.

The future has finally arrived — or at least the first wave of progress. Just before I left on my Asia trip, I got a FlexPerks Visa card from U.S. Bank [USB  Loading...      ()   ] that has a chip and a magnetic stripe, one of a growing number of American credit cards that now offer a “chip and signature” option. This isn’t entirely a solution because the global standard is “chip and PIN” technology, meaning you enter a PIN, or security code, after a payment terminal reads the card’s chip.

When I called U.S. Bank before my trip, I was told that I could get a PIN, but that any purchase using this code would be treated like a cash advance with 21 percent interest — obviously, not an option! Fortunately, the card worked fine when I used it without a PIN to buy a train ticket from an automated kiosk in Hong Kong. As I later learned, even without a PIN, a chip-and-signature card will work at most automated kiosks around the world because a signature is not required for purchases under $50. And at payment terminals used by stores and restaurants, the chip essentially tells the machine, “This card doesn’t have a PIN, so spit out a receipt for the customer to sign.”

The annual fee on my card is $49. Other chip-and-signature cards with annual fees under $100 include three options from Chase — the J. P. Morgan [JPM  Loading...      ()   ] Select Visa, the British Airways Visa [V  Loading...      ()   ] and the Hyatt [H  Loading...      ()   ] Visa — and Citi Thank You or Executive/AAdvantage MasterCards. For a more complete list, visit and search for “chip and signature” cards; the frequent fliers who trade tips there keep a running list of these cards and their annual fees.

Check Your Card's Foreign Transaction Fee

Another consideration is whether your credit card issuer charges a foreign transaction fee — usually 1 to 3 percent of every purchase, including the 1 percent Visa or MasterCard [MA  Loading...      ()   ] fee that banks pass along to their customers. But now that the government requires card issuers to disclose these fees clearly, some companies have gotten rid of them.

The personal finance site lists dozens of cards that do not charge a foreign transaction fee, including all of the credit cards issued by Capital One (which bucked this trend long before other banks). Alas, many of the credit cards that travelers use because they earn frequent-flier miles still impose this charge, like the American Express [AXP  Loading...      ()   ] Delta SkyMiles card, and the ones that don’t often have high annual fees, like the Chase British Airways Visa ($95 per year). But unless you travel abroad frequently or spend a lot on your credit card, it’s probably not worth paying a high annual fee to avoid this charge. Since most of my hotels were billed in dollars with no fees, and I paid cash for most purchases, I paid only $10 in foreign transaction fees during my trip.

Tell Your Bank Where You're Traveling

Before I left for Asia, I made four phone calls to let my bank and credit card companies know that I would be traveling abroad — a step banks advise customers to take so an unusual spending pattern doesn’t trigger a fraud alert. As I waited on hold after working through the automated phone menu, I wondered why banks don’t make this chore easier and offer a travel notification tool online.

It turns out, some do. Jim Bruene, who blogs at, posted the results of an informal test he conducted, finding it took him about a minute each to register travel notifications online with Capital One [COF  Loading...      ()   ] and Chase, and 7 to 10 minutes to do it over the phone with Wells Fargo and U.S. Bank (which don’t offer online options). Citi [C  Loading...      ()   ] is another bank that does.

Someday, Mr. Bruene predicts, banking apps will provide a better solution to this problem.

“Your mobile banking app will sense where you are and your card will be able to work there,” he said. In the meantime, look for a “travel notification” tool in the customer service area of your bank’s Web site before you pick up the phone.

Learn the Exchange Rate Before You Land

Every time I travel abroad, I stumble off the aircraft, find an A.T.M. in the airport, press the button for English and get stumped when I’m asked, “How many yen (or pesos, or Brazilian real) do you want?” You can’t tell the machine, “Give me the equivalent of $200.”

After landing in Tokyo, I had to cancel the transaction and find a billboard down the hall with the current exchange rate; since $250 is about 20,000 yen, I had panicked about entering such a high number in a fog of jet lag at the A.T.M.

Save yourself that anxiety by visiting a currency conversion site like before your trip and writing down how much you want to withdraw once you land. I’d also recommend reading the “money” section of a guidebook to see if the country you’re visiting has any financial quirks. For instance, in Japan, many A.T.M.’s don’t accept foreign bank cards, and the ones that do are scarce. At the main train station in Tokyo, an information booth attendant gave us a map and highlighted the route we’d have to follow (down the escalator, left at the second corridor, up the stairs, etc.) to find an “international A.T.M.”

We had 10 minutes before our train left for Kyoto, and after that sprint I learned to keep an eye out for a Citibank or the local version of 7-Eleven, the two main operators of international A.T.M.’s. Belatedly, I noticed that information was mentioned in my guidebook. But it’s good advice anytime you’re in a foreign country, especially if you’re heading off the beaten path: don’t wait until you’re almost out of cash to look for an A.T.M.

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