Understanding the Domestic Unemployment Numbers

Posted on October 24, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

How Can Unemployment Be Going Down?

By Rick Kahler MS CFP® ChFC CCIM www.KahlerFinancial.com

In an economy that isn’t exactly robust, how can unemployment be going down? The recent drop in the unemployment rate from 8.1% to 7.8% caught almost everyone, including me, by surprise. The GDP grew by only 1.5% in the first quarter, and its growth was under 2% for the last 12 years. To get the economy moving again we will need growth of 3% a year.

It isn’t surprising that many pundits were questioning the timing within minutes after the latest unemployment numbers were announced. After all, unemployment is one of the major issues in the Presidential election. Former General Electric CEO Jack Welch and several Fox News commentators even suggested the administration was cooking the books.

The BLS

I don’t believe the Bureau of Labor Statistics is manipulating unemployment data. The process of computing the data is straightforward and transparent. Two surveys go into projecting the unemployment rate, one covering 400,000 businesses and the other questioning 60,000 households. The surveys ask about the number of full-time and part-time employees, whether the part-time employees really want full-time employment, and whether those without a job have looked for a job within the last month.

Cooked Books?

But that doesn’t mean the books aren’t cooked. They are.

“The way the government derives the unemployment numbers has changed significantly over the last 30 years,” writes John Mauldin, editor of the economic newsletter Thoughts from the Frontline, in the October 8, 2012, issue. “Whatever administration is involved, the new equations for determining unemployment result in a lower unemployment rate than they would have if the 1980’s methodology were still in place.”

The Changes

One of the more bizarre changes in the unemployment rate calculation is that people are not considered unemployed unless they have looked for a job in the last 30 days, even if they currently receive unemployment benefits. Mauldin says there are probably many people who haven’t looked for a job in the last 30 days and that most, if not all, of them would consider themselves unemployed. “If you’re not disabled and you’re receiving unemployment or welfare benefits I think you should be counted as unemployed,” he says. He estimates our actual unemployment rate is well over 12%, which doesn’t take into account the 50% of college graduates who are underemployed.

Don’t Blame Obama

Before you blame the Obama administration for the dumbing down of the unemployment rate, this is the same way the Bush administration calculated unemployment.

It’s the same story with the Consumer Price Index, which the government has continually tweaked to give the illusion of a lower CPI than if the 1980’s formula was used.

ShadowStats.com, run by John Williams, calculates the current unemployment and inflation rates using the formulas from the 1980’s. According to that methodology, Williams calculates the unemployment rate (U-6) is 15% and the CPI is 9%.

Regaining Jobs?

The economy has currently regained about half of the jobs lost in the Great Recession of 2008-2009. According to the Liscio Report, it will take another 40 months to reach the level of employment we had prior to the recession. That is if we don’t have another recession, which is doubtful. If all the tax increases slated for January 1 go into effect, the Congressional Budget Office says GDP will shrink 2.9%, which guarantees a recession.

Assessment

So, what was behind the fall in the unemployment rate this month? According to Mauldin, the entire drop came from an increase in part-time workers. He says, “That such significant numbers of people can only find part-time work is not a sign of a strong and growing economy.”

When we look a little deeper, maybe the latest unemployment numbers aren’t such a surprise after all.

Conclusion

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Filed under: Career Development, Funding Basics | Tagged: Bureau of Labor Statistics, CBO, Consumer Price Index, CPA, Domestic Unemployment Numbers, GDP, John Mauldin, John Williams, rick kahler, ShadowStats.com, unemployment rates | 2 Comments »

Presidential Debate Prep – Why Doctors Need to Understand Mitt Romney’s Tax Policy

Posted on October 3, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

The 2012 Presidential Election

By Andrew D. Schwartz, CPA

The conventions have passed and the presidential debate season is upon us. And the 2012 Presidential Election is just a few months away. Let’s take a look at Mitt Romney’s tax policy based on information posted on his campaign’s official website www.mittromney.com.

Extend the Bush Tax Cuts:

If Congress doesn’t act by the end of the year, the 2001 Bush tax cuts will expire on December 31st causing tax rates across the board to increase. According to Mitt Romney:

While the entire tax code is in dire need of a fundamental overhaul, Mitt Romney believes in holding the line against increases in marginal tax rates. The goals that President Bush pursued in bringing rates down to their current level— to spur economic growth, encourage savings and investment, and help struggling Americans make ends meet—are just as important today as they were a decade ago. Letting them lapse, as President Obama promises to do in 2012, is a step in precisely the wrong direction. If anything, the lower rates established by President Bush should be regarded as a directional marker on the road to more fundamental reform.

Eliminate Taxes on Investment Income for People Earning Below $200k:

Romney’s Tax Policy includes a provision to cut taxes for taxpayers earning less than $200k. Let’s see what the Romney Campaign calls the Middle-Class Tax Savings Plan:

As with the marginal income tax rates, Mitt Romney will seek to make permanent the lower tax rates for investment income put in place by President Bush. Another step in the right direction would be a Middle-Class Tax Savings Plan that would enable most Americans to save more for retirement. As president, Romney will seek to eliminate taxation on capital gains, dividends, and interest for any taxpayer with an adjusted gross income of under $200,000, helping Americans to prepare for retirement and enjoy the freedom that accompanies financial security. This would encourage more Americans to save and to invest for the long-term, which would in turn free up capital for investment flowing back into the economy and helping to facilitate economic growth.

Implement Tax Simplification:

Promising tax simplification is nothing new. When I started practicing accounting in 1987, President Reagan had just signed the huge Tax Reform Act of 1986 into law. That Tax Act really complicated the tax code, and it has continued to become increasing more complex over the past 25 years. Remember Steve Forbes? He ran two presidential campaigns on his Flat Tax Platform.

Here is Romney’s spin on tax simplification:

In the long run, Mitt Romney will pursue a conservative overhaul of the tax system that includes lower and flatter rates on a broader tax base. The approach taken by the Bowles-Simpson Commission is a good starting point for the discussion. The goal should be a simpler, more efficient, user-friendly, and less onerous tax system. Every American would be readily able to ascertain what they owed and why they owed it, and many forms of unproductive tax gamesmanship would be brought to an end. Conversely, tax reform should not be used as an under-the-radar means of raising taxes. Where reforms that simplify the code or encourage growth have the effect of increasing the tax burden, they should be offset by reductions in marginal rates. Washington’s problem is not too little revenue, but rather too much spending.

Mitt Romney also wants to eliminate the Death Tax and repeal the Alternative Minimum Tax. You can read Mitt Romney’s complete Tax Policy atwww.mittromney.com/sites/default/files/shared/TaxPolicy.pdf

President Obama’s Rebuttal:

There actually isn’t very much information about Obama’s tax policy on his campaign’s official website. Check out The President’s Record on Taxes available at: www.barackobama.com/record/taxes?source=issues-nav and all you will find is mention of the Buffett rule and these four bullet points:

President Obama has cut taxes for middle-class families and small businesses. One of the first things he did in office was cut taxes for 95 percent of working families. He has also signed 18 tax cuts for small businesses and extended the payroll tax cut for all American workers and their families, putting an extra $1,000 in the typical middle-class family’s pocket.
For too long, the U.S. tax code has benefited the wealthy and well-connected at the expense of the vast majority of Americans. A third of the 400 highest income taxpayers paid an average rate of 15 percent or less in 2008.
That’s why President Obama proposed the Buffett Rule, asking millionaires and billionaires to do their fair share. But if you’re one of the 98 percent of American families who make under $250,000 a year, your taxes won’t go up.
The President has asked Congress to take action to reform our tax code and close tax loopholes for millionaires and billionaires, as well as hedge fund managers, private jet owners, and oil companies.

President Obama’s official campaign site also includes a link to a report that pokes holes in the Romney Tax Policy, available at:www.taxpolicycenter.org/UploadedPDF/1001628-Base-Broadening-Tax-Reform.pdf.

Which Candidate’s Tax Policy Makes the Most Sense?

Tough question. What makes it tougher is that the President doesn’t write the laws. Instead, the President’s job is to sign bills that have been passed by Congress into law. Even so, having an understanding of the tax philosophy of the country’s two presidential candidates is probably a prudent idea.

Assessment

As an interesting exercise, check out President Obama’s views on taxes from the prior election cycle in our article called What’s The Tax Plan, Man? included in ourOctober 2008 Newsletter, and compare his suggestions from 2008 to what’s been enacted during his first term. A few of the items that he proposed during his previous campaign, including raising the Social Security taxes on people earning more than $250k and implementing a “Make Work Pay” tax credit, have come to fruition during his first term in office.

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Filed under: Taxation | Tagged: 2012 Presidential Election, Alternative Minimum Tax., Andrew D. Schwartz, Bush Tax Cuts, CPA, death tax, IRS, Middle-Class Tax Savings Plan, Mitt Romney’s Tax Policy, tax | 3 Comments »

How Long to Keep Tax Records?

Posted on September 27, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding the IRS Position

By Andrew D. Schwartz, CPA

At my public accounting firm, we get this question all the time from our medical professional and lay clients:

Q: “How long do I need to keep my tax records?”

Here is the IRS answer to this question:

Well organized records make it easier to prepare a tax return and help provide answers if your return is selected for examination, or to prepare a response if you receive an IRS notice.

What to Keep – Individuals.

In most cases, keep records that support items on your tax return for at least three years after that tax return has been filed. Returns filed before the due date are treated as filed on the due date. Examples include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks or other proof of payment and any other records to support deductions or credits claimed. You should typically keep records relating to property at least three years after you’ve sold or otherwise disposed of the property.

Examples include a home purchase or improvement, stocks and other investments, Individual Retirement Account transactions and rental property records.

What to Keep – Doctors as Small Business Owners.

Typically, keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Also, keep records documenting gross receipts, proof of purchases, expenses, and assets. Examples include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices, credit card charges and sales slips. Forms 1099-Misc, canceled checks, accounts statements, petty cash slips and real estate closing statements. Electronic records can included databases, saved files, e-mails, instant messages, faxes and voice messages.

There is no period of limitations to assess tax when a return is fraudulent or when no return is filed. If income that you should have reported is not reported, and it is more than 25% of the gross income shown on the return, the time to assess is 6 years from when the return is filed. For filing a claim for credit or refund, the period to make the claim generally is 3 years from the date the original return was filed, or 2 years from the date the tax was paid, whichever is later. For filing a claim for a loss from worthless securities the time to make the claim is 7 years from when the return was due.

Assessment

For more information from the IRS, check out:

Publication 552, Recordkeeping for Individuals, provides more information on recordkeeping requirements for individuals.
Publication 583, Starting a Business and Keeping Records
Publication 463, Travel, Entertainment, Gift, and Car Expenses, provide additional information on required documentation for taxpayers with business expenses.

For a more complete listing, please check out: Record Retention Guide Compiled by the Massachusetts Society of CPAs.

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Healthcare Job Expenses Can be Tax Deductible

Posted on August 21, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

Appreciating the Medical Academic Calendar

By Andrew D. Schwartz, CPA

Many healthcare professionals work based on the Academic Calendar. That means that a lot of Doctors switch jobs over the summer. According to our friends at the IRS in their IRS Summertime Tax Tip 2012-06:

Summertime is the season that often leads to major life decisions, such as buying a home, moving or a job change. If you are looking for a new job that is in the same line of work, you may be able to deduct some of your job hunting expenses on your federal income tax return.

The Seven Tips

Here are seven things the IRS wants you to know about deducting costs related to your job search:

To qualify for a deduction, your expenses must be spent on a job search in your current occupation. You may not deduct expenses you incur while looking for a job in a new occupation.
You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.
If you travel to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area to which you travelled. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity unrelated to your job search compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
You cannot deduct your job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
You cannot deduct job search expenses if you are looking for a job for the first time.
In order to be deductible, the amount that you spend for job search expenses, combined with other miscellaneous expenses, must exceed a certain threshold. To determine your deduction, use Schedule A, Itemized Deductions. Job search expenses are claimed as a miscellaneous itemized deduction. The amount of your miscellaneous deduction that exceeds two percent of your adjusted gross income is deductible.

Assessment

For more information about job search expenses, see IRS Publication 529, Miscellaneous Deductions. This publication is available on www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Links:

Schedule A, Itemized Deductions ( PDF)
Publication 529, Miscellaneous Deductions ( PDF)

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Filed under: Practice Management, Taxation | Tagged: Andrew D. Schwartz, CPA, Healthcare Job Expenses Can be Tax Deductible, IRS, IRS Publication 529, IRS Summertime Tax Tip, www.IRS.gov | 1 Comment »

Supreme Court Upholds the PP-ACA Tax

Posted on August 15, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

More Tax Increases In Store for 2013

By Andrew D. Schwartz, CPA

On June 28 2012, the Supreme Court upheld most of the provisions of The Patient Protection and Affordable Care Act. Here are some of the tax increases that might affect you starting in 2013:

Increased and Expanded Medicare Taxes

High-income taxpayers will be paying higher Medicare taxes. Under the current rules, individuals have Medicare taxes withheld from their salaries at a rate of 1.45% on each dollar earned at work. Since employers match the amount withheld, Medicare receives a total of 2.9% for each payroll dollar paid out. And, unlike Social Security taxes which max out at $110,100 (in 2012), there is no cap for Medicare taxes. Self-employed individuals also pay Medicare taxes at a rate of 2.9% on all of their net earnings.

Starting in 2013, the employee portion of the Medicare tax jumps by a whopping 62% – from the current rate of 1.45% to 2.35% – on earned income in excess of $200k for single individuals and $250k for married couples filing a joint tax return. As of now, the employer match is slated to remain at 1.45%, which means the total Medicare tax will be 3.8% for high-income taxpayers.

Example:

For example, if you’re single, and earn $500k from your job, expect to pay $2,700 in additional Medicare taxes (($500k – $200k) * .9%) for 2013.

For more information, check out the IRS’s Questions and Answers for the Additional Medicare Tax, which explains:

The statute requires an employer to withhold Additional Medicare Tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year. An employer has this withholding obligation even though an employee may not be liable for the Additional Medicare Tax because, for example, the employee’s wages or other compensation together with that of his or her spouse (when filing a joint return) does not exceed the $250,000 liability threshold. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

To increase taxes for high-income individuals even more, the Medicare tax will also apply to unearned income for the first time since this tax was enacted. People over the $200k or $250k threshold should expect to pay Medicare taxes at a rate of 3.8% on interest, dividends, capital gains, and net rental income beginning in 2013. You will pay this tax in addition to any federal and state income taxes due on this income. We’ll provide you a link to this form when it becomes available.

Reduced Tax Breaks for Medical Expenses

Many employers offer their staff the ability to pay for their family’s healthcare costs with pre-tax dollars through a Flexible Savings Accounts (FSA) included as part of their benefits package. Starting in 2013, the maximum amount of money that you can set aside in an FSA will be cut in half to $2,500 per year. Plus, medical expenses you can pay through the FSA will exclude certain items currently allowed, including OTC medications. Please note, if you are married, both you and your spouse can put away the full $2,500 through your respective employer’s FSA.

The Patient Protection Act also makes it even tougher for individuals to deduct their medical expenses. Starting in 2013, you can only deduct your family’s medical expenses to the extent the allowable expenses exceed 10% of your adjusted gross income. That’s an increase of one-third over today’s threshold of 7.5% of AGI.

This new rule may not impact your taxes, however, thanks to the dreaded AMT. Since the current threshold for deducting medical expenses under the AMT is already 10% of AGI, many people who are hit by this tax every year might not see any tax increase due to this change.

Steps to Consider to Minimize These Taxes:

As with most other tax rules, there are ways to minimize the tax bite that will be caused by soon to be implemented changes to the Tax Code:

Take a look at a Health Savings Account for your family. Money contributed into an HSA is tax-deductible, and money withdrawn for your family’s medical expenses is tax-free. We wrote about HSAs in our May 2012 Newsletter.
Consider selling appreciated investments in 2012 if you would otherwise sell them in 2013. No one knows whether the tax rate on long-term capital gains will be higher than 15% in 2013. Add to this the 3.8% Medicare tax you’ll pay once your income exceeds $200k if single or $250k if married, and you could save a decent amount of taxes by selling by December 31st.
Consider accelerating income into 2012 to reduce your 2013 income. This strategy includes one-time income generators, such as Roth Conversions.

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Filed under: Health Law & Policy, Taxation | Tagged: ACA, Andrew D. Schwartz, CPA, Flexible Savings Accounts, health savings account, Medicare Taxes, Patient Protection and Affordable Care Act, Supreme Court Upholds the PP-ACA Tax | 3 Comments »

When A Regular IRA is Better than ROTH

Posted on July 31, 2012 by Dr. David Edward Marcinko MBA MEd CMP™

More on IRAs for Doctors www.schwartzaccountants.com

By Andrew D. Schwartz, CPA

Each winter, when my staff and I meet with our physician and other clients to review their tax information, we get this question a lot, “Should I go with the Roth version of my employer’s 401(k) or 403(b) plan, or should I stick with the traditional version?”

Taxpayers first had the option of contributing money to a Roth account back in 1998. Remember, when you contribute money to a Roth account, you elect to forego a current year tax break in exchange for a promise from the government that distributions taken from the Roth account down the road won’t ever be taxed.

Through 2005, the only access you had to these tax-free accounts was to contribute to a Roth IRA. Many middle-income and high-income taxpayers never had the opportunity to contribute to a Roth IRA, however, since their incomes exceeded the relatively modest threshold based on their filing status. (The Roth IRA threshold for 2012 is $125k for single individuals and $183k for married couples.)

What Congress Likes

Congress liked that people were giving up a current year tax break by opting to go with a Roth IRA instead of to a Traditional IRA, so decided to expand this opportunity to 401(k) plans and 403(b) plans. As we wrote in our October 2005 Newsletter in an article called The New Roth 401k and 403b, employers could begin to offer the Roth version of these plans as of January 1, 2006.

What’s the difference between the Traditional and Roth versions of these popular retirement savings plans? With the traditional 401(k) or 403(b) plan, the salary deferrals you make reduce your taxable salary and grow tax deferred. You will then owe income taxes on distributions taken from these accounts when you retire.

Example:

As a doctor, let’s say you earn $200k, and you max out your 403(b) salary deferrals for $17k during the year. In this case, your W-2 will report taxable wages of $183k in Box 1. Assuming you are in the 33% federal tax bracket, the $17k you contribute into your 403(b) plan saves you $6,667 in federal income taxes. That’s a pretty good tax break I would say.

What happens if you instead decide to go with the Roth version of the 403(b) plan for your salary deferrals? When you contribute money to a Roth account, you forego a current year tax-break. Your W-2, therefore, will report the full $200k as taxable wages in Box 1, instead of $183k that would be reported had you gone with the Traditional 403b. The benefit of giving up this tax break is the tax-free treatment of the compounded growth on the $17k of salary deferrals. In other words, you won’t owe any federal income taxes on the distributions taken from this account when you retire.

The Max Factor

When my clients ask me for advice about the Roth 401k or 403b plan, I immediately look at Box 12 of theirW-2 forms to see how much they contributed in salary deferrals during the prior year. According to the instructions of the W-2 form, here are the relevant codes that show up in Box 12 of the W-2 form:

Code D – Elective deferrals to a section 401(k) cash or deferred arrangement. Also includes deferrals under a SIMPLE retirement account that is part of a section 401(k) arrangement.

Code E – Elective deferrals under a section 403(b) salary reduction agreement

Code AA – Designated Roth contributions under a section 401(k) plan

Code BB – Designated Roth contributions under a section 403(b) plan

What I’m looking to see is whether this client is maxing out their salary deferrals during the year. If a client is contributing to the Roth version of the 401k and 403b plan, and is falling short of the $17k max ($22.5k max if 50 or older), I strongly suggest that they consider contributing only to the Traditional version until they are able to max out their contributions.

Assessment

In my opinion, socking away as much money as possible each year into these tax-advantaged, creditor protected accounts takes priority over worrying about saving taxes later. Remember, if money is tight, you have the choice of contributing $10,333 into a Roth 401k account, or taking advantage of the $6,667 tax break offered by traditional 401k plans and putting away the max of $17k into the Traditional 401k account.

I think a financial planning twist on Alfred Lord Tennyson’s poem about lost love sums this up best, “Tis better to save and be taxed than never to have saved at all.”

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Filed under: Investing, Retirement and Benefits, Taxation | Tagged: 403-b plans, Andrew D. Schwartz, CPA, individual retirement account, IRA, physician retirement planning, SEP-IRA, When Regular is Better than ROTH | 3 Comments »

Calling All Financial Advisors, Brokers, EAs, CFPs, CPAs, CFAs and RIAs to Contribute

Posted on October 23, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

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About D’Alessio & Tocci LLP, CPAs

Posted on October 8, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

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New Partner Onboard

By Staff Reporters

Dear ME-P Readers and Subscribers,

It is with great pleasure that the firm of D’Alessio & Tocci, LLP [Certified Public Accountants],
welcomes its newest partner M. Howard Pell, CPA.

About M. Howard Pell CPA

Mr. Pell has over 30 years experience in public accounting. He was formally Director of Tax for PKF New York, NY. The company will now be called D’Alessio Tocci & Pell, LLP Certified Public Accountants, and will continue to operate out of its current address:

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Teaneck, NJ 07666

Assessment

Visit: http://dalecpa.com/

Conclusion

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Filed under: Accounting, Sponsors | Tagged: CPA, D'Alessio & Tocci, D'Alessio Tocci & Pell, LLP Certified Public Accountants, M. Howard Pell | Leave a comment »

Understanding the 2010 Estate Tax Basis Problems

Posted on August 4, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

AICPA Tax Basis Issues

By Children’s Home Society of Florida Foundation

At a July 27, 2010 conference sponsored by the American Institute of Certified Public Accountants, Treasury Representative Catherine Hughes discussed the basis issues that are arising concerning 2010 decedents.

2010 Estate Tax Repeal

While the estate tax is repealed during 2010, under Internal Revenue Code Sec. 1022 there are new and complex rules on basis adjustments. For large estates, a majority of the assets will be transferred with a “flow through” of the basis. That is, the heirs will be able to use the basis of the decedent in any future sales for the purpose of reporting capital gain. Because many decedents have few or no records of the basis, it is quite possible that these heirs will pay capital gains tax on the full value of future sales.

Allowances for Basis “Step-Up”

However, there are allowances for a basis “step-up” of $1.3 million. In addition, for a surviving spouse, the basis step-up can be $3 million. The step-up in basis cannot be greater than the fair market value of the applicable property. Determining how to allocate the adjusted basis step-up in an estate has caused great concern among estate planning attorneys and CPAs. Treasurer Representative Hughes stated, “I anticipate there will be a lot of mistakes where there isn’t an affirmative allocation” of basis. Treasury is studying the situation and may issue guidance with recommended default allocation rules.

Assessment

While Congress continues to debate estate tax law and, therefore, has not made any decision on a potential retroactive estate tax, the nonpartisan Tax Policy Center this week released an estimate of the potential number of 2011 taxable estates. If a $1 million exemption is applicable in 2011, there will be an estimated 43,500 estates subject to tax. If the 2009 exemption amount of $3.5 million per decedent is applicable next year, the number of taxable estates is reduced to $650,000.

Editor’s Note: The discussion in Washington on the practical aspects of allocating the basis step-up now suggests that there may not be a mandatory retroactive estate tax law. With the pending election, it now seems very likely that Congress will not act on the estate tax before December. The Senate continues to have great difficulty developing a plan acceptable to 60 Senators and to the House of Representatives. However, Senators now recognize that a $1 million exemption and tax on 43,500 estates will impact a large number of middle-class children and other beneficiaries. Therefore, it seems quite likely that a compromise should be passed in December. However, as the AICPA basis adjustment discussion suggests, this compromise is now less likely to mandate an extension of the 2009 exemption for 2010. As a result, attorneys and CPAs will need to address the very complex and uncertain basis adjustment problems for 2010 estates.

Conclusion

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Filed under: Accounting, Estate Planning, Taxation | Tagged: accountants, AICPA, capital gains, Catherine Hughes, CPA, estate tax, estate tax basis, Internal Revenue Code Sec., IRS, step up basis, Tax Policy Center this | 4 Comments »

Physicians Buying Securities On Margin

Posted on February 19, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

How It Works – and – What to Watch Out For

By Dr. Gary L. Bode; CPA, MSA, CMP™ Hon]

This ME-P reviews the basics of buying on margin, along with some of the pitfalls inherent in margin buying – whether this financial tool is for you and how you can best use it.

The Term Itself

“Buying on margin” is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But, margin exposes physician investors to the potential for higher losses.

How Margin Works

Let’s say you buy a stock for $50 and the price of the stock rises to $75. If you bought the stock in a cash account and paid for it in full, you’ll earn a 50 percent return on your investment. But if you bought the stock on margin – paying $25 in cash and borrowing $25 from your broker – you’ll earn a 100 percent return on the money you invested. Of course, you’ll still owe your brokerage $25 plus interest.

The downside to using margin is that if the stock price decreases, substantial losses can mount quickly. For example, let’s say the stock you bought for $50 falls to $25. If you fully paid for the stock, you’ll lose 50% of your money. But if you bought on margin, you’ll lose 100%, and you still must come up with the interest you owe on the loan.

Caution: In volatile markets, as in 2008-2010, physician-investors who put up an initial margin payment for a stock may, from time to time, be required to provide additional cash if the price of the stock falls. Investors have been shocked to learn that a broker has the right to sell the securities that were bought on margin – without any notification, and at a potentially substantial loss to the investor.

Moreover, if your broker sells your stock after the price has plummeted, then you’ve lost out on the chance to recoup your losses if the market bounces back.

The Risks

Margin accounts can be very risky and they are not for everyone. Before opening a margin account, be aware that:

You can lose more money than you have invested;
You may have to deposit additional cash or securities in your account on short notice to cover market losses;
You may be forced to sell some or all of your securities when falling stock prices reduce the value of your securities; and
Your brokerage firm may sell some or all of your securities without consulting you to pay off the loan it made to you.

You can protect yourself by knowing how a margin account works and what happens if the price of the stock purchased on margin declines.

Tip: Your broker charges you interest for borrowing money; take into account how that will affect the total return on your investments. Be sure to ask your broker whether it makes sense for you to trade on margin in light of your financial resources, investment objectives, and tolerance for risk.

Read the Margin Agreement

To open a margin account, you must sign a margin agreement. The agreement may either be part of your account agreement or separate. The margin agreement states that you must abide by the rules of the Federal Reserve Board, the New York Stock Exchange, the National Association of Securities Dealers [now FINRA], Inc., and the firm where you have set up your margin account.

Caution: Carefully review the agreement before signing.

As with most loans, the margin agreement explains the terms and conditions of the margin account. The agreement describes how the interest on the loan is calculated, how you are responsible for repaying the loan, and how the securities you purchase serve as collateral for the loan. Carefully review the agreement to determine what notice, if any, your firm must give you before selling your securities to collect the money you have borrowed.

Know the Margin Rules

The Federal Reserve Board and many self-regulatory organizations (SROs), such as the NYSE and [FINRA] NASD, have rules that govern margin trading. Brokerage firms can establish their own requirements as long as they are at least as restrictive as the Federal Reserve Board and SRO rules. Here are some of the key rules you should know:

Before You Trade – Minimum Margin

Before trading on margin, the NYSE and (FINRA) NASD, for example, require you to deposit with your brokerage firm a minimum of $2,000 or 100 percent of the purchase price, whichever is less. This is known as the “minimum margin.” Some firms may require you to deposit more than $2,000.

Amount You Can Borrow – Initial Margin

According to “Regulation T” of the Federal Reserve Board, you may borrow up to 50 percent of the purchase price of securities that can be purchased on margin. This is known as the “initial margin.” Some firms require you to deposit more than 50 percent of the purchase price. Not all securities can be purchased on margin.

Amount You Need After You Trade – Maintenance Margin

After you buy stock on margin, the NYSE and (FINRA) NASD require you to keep a minimum amount of equity in your margin account. The equity in your account is the value of your securities less how much you owe to your brokerage firm. The rules require you to have at least 25 percent of the total market value of the securities in your margin account at all times. The 25 percent is called the “maintenance requirement.” In fact, many brokerage firms have higher maintenance requirements, typically between 30 to 40 percent and sometimes higher, depending on the type of stock purchased.

Example: You purchase $16,000 worth of securities by borrowing $8,000 from your firm and paying $8,000 in cash or securities. If the market value of the securities drops to $12,000, the equity in your account will fall to $4,000 ($12,000 – $8,000 = $4,000). If your firm has a 25 percent maintenance requirement, you must have $3,000 in equity in your account (25 percent of $12,000 = $3,000). In this case, you do have enough equity because the $4,000 in equity in your account is greater than the $3,000 maintenance requirement.

But, if your firm has a maintenance requirement of 40%, you would not have enough equity. The firm would require you to have $4,800 in equity (40% of $12,000 = $4,800). Your $4,000 in equity is less than the firm’s $4,800 maintenance requirement. As a result, the firm may issue you a “margin call,” since the equity in your account has fallen $800 below the firm’s maintenance requirement.

Margin Calls

If your account falls below the firm’s maintenance requirement, your broker generally will make a margin call to ask you to deposit more cash or securities into your account. If you are unable to meet the margin call, your firm will sell your securities to increase the equity in your account up to or above the firm’s maintenance requirement.

Tip: Your broker may not be required to make a margin call or otherwise tell you that your account has fallen below the firm’s maintenance requirement. Your broker may be able to sell your securities at any time without consulting you first. Under most margin agreements, even if your firm offers to give you time to increase the equity in your account, it can sell your securities without waiting for you to meet the margin call.

Margin accounts involve a great deal more risk than cash accounts, where you fully pay for the securities you purchase. You may lose more than your initial investment when buying on margin. If you cannot afford to do so, then margin buying is not for you.
Read the margin agreement, and ask your broker questions about how a margin account works and whether it’s appropriate for you to trade on margin. Your broker should explain the terms and conditions of the margin agreement.
Know how much you will be charged on money you borrow from your broker, and know how these costs affect your overall return.
Remember that your brokerage firm can sell your securities without notice to you when you don’t have sufficient equity in your margin account.

Assessment

Have you ever traded on margin and how did it work out for you?

Channel Surfing the ME-P

Conclusion

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Filed under: Investing, Portfolio Management | Tagged: CFP, CMP, CPA, Federal Reserve Board, FINRA, Gary Bode, margin, margin account, margin calls, NASD, NYSE, Regulation T, RIA, SEC, SRO, stock broker, www.certifiedmedicalplanner.com | 2 Comments »

First Annual iMBA, Inc Educational Cruise

Posted on October 16, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Meet, Greet, Lunch and Learn from the Experts

By Ann Miller; RN, MHA

[Executive-Director]

Some time ago, a CPA, CFP® and fellow Certified Medical Planner™ suggested that we hold annual meetings, or education seminars, for all our colleagues. As a nascent organization at the time, this was considered a “pipe dream.” But, it may now become a reality depending on your response. All interested stakeholders are invited.

The Cruise

Currently, we are soliciting interest in a – Princess – Caribbean cruise [Southern] for 2010. This would afford us the opportunity to meet you on both a formal or informal basis. Educational and other activities would then be scheduled, as-needed or requested. Departure from Ft. Lauderdale, Florida. All info subject to change without notice, at this time.

www.CertifiedMedicalPlanner.com

For example, activities could be arranged for CMP™ program credits in health economics and medical management; or simply on an ad-hoc [audit] informational basis. We will also attempt to individualize and accommodate personal situations and professional needs.

Seeking Interest and Input

And so, your thoughts, ideas and comments on this Medical Executive-Post cruise idea and opportunity are appreciated. Please email me your ideas; or contact us for more information with details. Serious inquiries only:

MarcinkoAdvisors@msn.com

And, feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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Seeking Sponsors

We are also seeking sponsors for this cruise, and other iMBA corporate engagements.

https://healthcarefinancials.wordpress.com/2007/12/11/support-the-executive-post

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

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Filed under: Career Development, CMP Program, Events-Planner, iMBA, Inc., Quality Initiatives, Sponsors | Tagged: Caribbean Cruise, certified medical planner, CFA, CFP, CMP, CPA, david marcinko, educational seminars, fiancial advisors, hope hetico, MBA, medical management consultants, PhD, physicians, www.certifiedmedicalplanner.com, www.healthcarefinancials.com, www.medicalbusinessadvisors.com | Leave a comment »

Our Recent Experience with CFP® Mark Utility

Posted on October 14, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Certification Falling from Grace – Deserved or Not?

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

The Premise

In the summer [2008], we sent a random email blast to the first 200 Certified Financial Planners® on our list-serve. These were folks who had previously contacted us, and/or purchased our textbooks, handbooks, tools and/or dictionaries that assist accountants, financial advisors, attorneys, medical management consultants and all those working to assist physicians and medical professionals on business and economics matters.

The “Straw-Poll” Query

Our email blast asked the simple question:

“Did you ever voluntarily resign your license to use the CFP® mark?”

First Round Results

We received four positive responses [2%]. We then followed up to learn that 2 of the 4 were CPAs, one was a CFA and another was an MBA. Now, what do these results signify – probably nothing – or maybe an emerging trend?

Repeat

So, last summer [2009], after the continuing Wall Street collapse, and the Somnath Basu PhD article on “CFP Trust” in Financial Advisor magazine and this blog, we sent out a follow-up email to the exact same 200 Certified Financial Planners® as before; but carved-out and replaced the 4 CFPs who had resigned the mark, with 4 others.

Link: I Jealously “Shake my Fist” at Somnath Basu PhD

This time we asked the question:

“Have you recently considered allowing your CFP mark to lapse; or resigning it?”

Second Round Results

This time we received exactly eight positive replies [4%] or double the number from the first round. One CFP® said:

“I am rethinking my entire business and marketing philosophy. This includes separation from any taint left over from recent industry scandals – and yes – even including my CFP® mark”

http://www.CertifiedMedicalPlanner.org

Assessment

This little experiment was not statistically significant by any means. And, again it probably is indicative of nothing. Yet, these types of questions must be boldly asked today; even if they were not even timidly asked yesterday.

Nevertheless, cited plausible reasons for the increased negative CFP® mark response may be:

CFP BoS lacks modernity and membership alliance.
SEC mismanagement.
NASD/FINRA impotence.
Wall Street greed.
Lack of true fiduciary accountability.
Client anger and public distrust.
Advisor frustration at lost income.
College for Financial Planning and American College credibility.
ME-P operations in the medical niche advisory space.
CFP® mark and related industry certification taint.
Alternative degrees and available designations.
Rise of RIAs and the fiduciary CMP™ mark for healthcare specificity.
Resigning [doing] and considering [thinking] are not equivalent;
etc, etc.

It is interesting to note that no CFP® resigned their mark who did not hold either another graduate degree [MBA, MSFS, MA, MS, PhD], or more rigorous industry [CFA and CPA] certification.

Assessment

So, is CFP mark allegiance just a union-like mentality of “united we stand – divided we fall”, by those with little to no gravitation pull of their own – or something else; ie., industry group think? You decide; and do tell us what you think.

Note: I am the founder of the CMP™ online education and certification program for financial advisors and consultants interested in the health economics, finance and medical practice management space, and a former [resigned] certified financial planner www.CertifiedMedicalPlanner.org

Update 2013:

Conclusion

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Filed under: "Advisors Only", Career Development, Ethics, Financial Planning, iMBA, Inc., Marketing & Advertising, Media Mentions and PR, Op-Editorials, Research & Development, Surveys and Voting | Tagged: certified financial planner, certified medical planner, CFA, CFP, CMP, CPA, david marcinko, DDS, Financial Adviosr, financial fiduciary, financial planning association, FINR, FPA, investment advisor, MBA, MD, PhD, registered invesment advisor, Registered Rep, RIA, SEC, Somnath Basu | 17 Comments »

Your Chance to be Heard on the ME-P

Posted on August 29, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

What Gripes You?

By Ann Miller; RN, MHA

[Executive Director]

The Medical Executive-Post is among the web’s most influential and well-read health economics and financial blogs, with more than 100,000 subscribers. But, we refrain from Twitter triteness on our more than 50 topic channels with deep experienced gravitas.

Reach our Audience and be Heard

You can have the opportunity to reach this target audience by submitting a guest opinion piece or post on anything related to health care economics, medical practice management and physician focused financial planning. Articles of about 500 words in length, free of grammatical and spelling errors are preferred. Accepted pieces will not only be published on the blog, but may be syndicated on affiliated networks, as well as an e-newsletter distributed to thousands.

Professional Organization Members

Members of professional organizations, such as the American Medical and Dental Association, and the Financial Planning Association, already contribute as individual readers and subscribers. Other writers refuse to join these organizations for various reasons. They too are welcomed. There is also an opportunity to become a regular contributor to the blog if several, quality, guest posts have been accepted and published.

Assessment

Articles for consideration can be e-mailed directly to me.

MarcinkoAdvisors@msn.com

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Tell us what you think. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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Filed under: Alerts Sign-Up, CMP Program, Experts Invited, iMBA, Inc., Op-Editorials | Tagged: ADA, AMA, APMA, CFP, CMP www.CertifiedMedicalPlanner.com, CPA, DDS, DO, DPM, financial advisors, financial planners, health care economcis, Health Insurance, Healthcare Finance, iMBA, Inc., MD, medical pratice management, twitter, wealth managers | Leave a comment »

Trugman CPA Valuation Newsletter

Posted on August 25, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Summer 2009

By Linda B. Trugman; CPA, MBA

By Gary R. Trugman; CPA, MCBA

We hope this ME-P finds you happy, healthy and enjoying your summer! We have attached our most recent newsletter for your perusal and hope that you will find something of interest in it.

Link: Summer 2009

Assessment

We are available to assist doctors, and your medical or financial advisory clients with their valuation and litigation support needs and look forward to hearing from you. As a reminder, our updated website at www.trugmanvaluation.com includes a resource center that provides additional information that might be useful to you in your practice including sample reports, various conference presentations and podcasts.

Conclusion

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Sponsors Welcomed

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Filed under: "Ask-an-Advisor", Accounting, Alerts Sign-Up, Experts Invited, Health Law & Policy, Monthly Reports, Practice Worth, Taxation | Tagged: Accounting, CPA, CVA, Gary Trugman, Linda Trugman, litigation support, medical practice appraisals, medical practice valuations, medical practice worth | Leave a comment »

Calling for CFP® Fiduciary Status, Real Education and Higher Duty

Posted on April 19, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Marcinko Predates Basu – Joins in on Promoting Same

[By Ann Miller; RN, MHA]

Executive Director

Editor’s Note:

We cut and pasted this verbatim anonymous comment, obtained from the trade magazine – Financial Advisor [FA] online – for its pointed charges important to the currently contentious topic of CFP mark status. Although emotional, and borderline abusive, it may represent more reality; than not.

The Letter

Liars and Frauds
Grossly Incompetent
Conveniently Stupid
Simply Unethical

The bulk of the commentary seems to focus on ethics and fiduciary duty to clients. It does not now, nor has ever existed. Fiduciary:

“As fiduciaries, financial planners must make fair and complete disclosure of all material facts and must employ reasonable care to avoid misleading their clients. The utmost good faith is required in all their dealings. Simply put, fiduciaries must exhibit the highest form of trust, fidelity and confidence, and are expected to act in the best interest of their clients at all times.”

The bulk of planner’s violate this tenet and always have. A fiduciary MUST be legal. The idea that one is practicing ethically while never being legal is an affront to any rational person. Or; shall we simply say a “prudent man” at as minimum.

As a fact, about 35 states require licensing that planners don’t want to hear about, never mind adhere to. California – with 8,000 CFPs – has only ONE that is fully licensed and legal to offer comprehensive fee services. Where is the outrage from CFP®s regarding this – and what the other 35 states demand?

A Conspiracy?

Nothing at all: The Board has actively engaged in a conspiracy of silence regarding such duty. NAPFA is a joke and always has been regarding high standards. Yet not one CFP® apparently even cares. That is being a fiduciary? It goes further. The UC system in California was also made aware of this deception more than a decade ago – yet did nothing. The illegal planners/instructors were left to “instruct and guide” new planners to the same level of illegality and fraud. You simply have a wholesale violation of integrity and honesty permeates the educational system and no one cares. I am not sure California Lutheran knows of the deception either. I doubt it. Does that make the lack of integrity and knowledge any the less worse? No.

You have to know what is required legally to perform a function. Every commentator would immediately notify regulators if a physician or attorney was practicing illegally. Yet; nothing here. Is this a double standard by CFPs etc, all to allow themselves a free pass from licensing? Sure.

Every officer, director and most staff members of the Board since Bob Goss has been aware of the fraud. All on formal written record since 1995, at the very least. Not one CFP® in this commentary venue has even bothered to address illegal and unethical activity- yet while extolling the virtues of the organization and themselves. What about the New Disciplinary Board Members? Are they not aware of the breach? If not, why not. Incompetency? If they do now, then why have they done nothing? Conveniently stupid – worse?

Steven Covey noted:

“Integrity means avoiding any communication that is deceptive, full of guile or beneath the dignity of people. A lie is any communication with intent to deceive. Whether we communicate with words or behavior, if we have integrity, our intent cannot be to deceive.”

FA is also aware of the lies and deception and at least has allowed this discussion. But to have further commentary from Board officers extolling the virtues of their standards and the highest integrity is disingenuous at best and a fraud at its worst.

Shame

Shame on all of you for not forcing the issue – of being a true fiduciary? But then again, worse yet, we have these same organizations and people deceptively going to Congress to instill this level of a breach of duty to the American public. Yet, hardly an outcry because the deception is so good and because members would benefit. So we have a benefit by deception.

“it is a lot easier to talk about your ethics than to live up to them.”

The standards might be fine. But who cares if they do not have to be adhered to. Is that not the real question?

Link http://www.fa-mag.com/online-extras/4064-weighing-the-cfp-mark-the-debate-continues.html

Assessment

Contrary to the above and CFP BoS requirements, the Certified Medical Planner program demands a college degree [with verifiable proof], a written and signed statement of legal fiduciary accountability at all times, and CEs consisting of a published dissertation, not mere annual lucre www.CertifiedMedicalPlanner.org

The CMP™ Experience

Now, in as much as I am the ED for our CMP™ online program, I vet most applications. The prioritized reasons for matriculation rejection are: 1] unwillingness / inability to accept fiduciary status while blaming it on BDs, 2] lack of at least an undergraduate college degree, and 3] absolute “panic” regarding our writing and publication requirements.

Conclusion

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Filed under: "Advisors Only", Alerts Sign-Up, Breaking News, Career Development, Ethics, Financial Planning, Op-Editorials, Quality Initiatives, Research & Development | Tagged: Bob Goss, california lutheran university, CFA, CMP, CPA, david marcinko, financial advisor magazine, financial fiduciary, financial planner, MBA, NAPFA, PhD, Somnath Basu, Steven Covey | 22 Comments »

Dr. Somnath Basu Replies to the CFP® [Mis] Trust Controversy

Posted on April 16, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Restoring Trust in the CFP® Mark … the Ongoing Saga

By Ann Miller, RN, MHA

[Executive Director]

According to Professor Somnath Basu, PhD; Director – California Institute of Finance at the California Lutheran University,

A painful truth is that many financial practitioners are sales people masquerading as planners or advisors in an industry whose ethical practices have a shameful track record.

Restoring Trust in the CFP® Mark

Basu’s article, published in the Financial Advisor online news magazine on April 6, 2009, struck a chord with our ME-P readers the last few days. More than 75 opinions, calls, emails and faxes were received commenting on it.

Link: http://www.fa-mag.com/online-extras/4037-revisiting-cfp-credentialing.html

A Trickle – Not a Barrage

However, we did not receive the barrage of fire and brim-stone that one would have expected in the past [sans several abusive miscreants], attempting to feebly parse each phrase to an informed audience of insiders. Perhaps it is the dismal economy, the shenanigans of Wall Street, or the ire of blind-sided clients that has stunned many financial advisors and Certified Financial Planners® into sober silence – or shall we dare say it – shame. In fact, one caller ruefully said,

“Most everything that Basu and Marcinko said is true. We all know it, even though we pretend not to with a “nod and a wink” to the blind and trusting public; all while posturing as experts to friends and family. But, that’s not what bothers me the most about this whole situation … What I really hate now is that everyone else knows it too!”

I Jealously “Shake my Fist” at Somnath Basu

Rather than individual shame, the general reaction to Dr. Basu’s article – as well as this follow-up ME-P of Dr. David Edward Marcinko MBA [Publisher-in-Chief] – was an almost surreal and collective acceptance of its’ accuracy. The CFP® mark – while certainly premier in the flagging financial services industry – still leaves far too much to be desired in terms of education, competency, disclosure, ethical standing and real professionalism. And, except for some rather Herculean marketing advancements; the CERTIFIED FINANCIAL PLANNING Board of Standards’ stated goal of attaining professional stature for the marks, has fallen far short – or even regressed the past decade – seemingly abandoned for the sake of growth.

Link:https://healthcarefinancials.wordpress.com/2009/04/09/i-jealously-shake-my-fist-at-somnath-basu/

Stepping Up to Redemption and Independence

Since contemplative reflection is the first step toward redemption, we now ask all financial advisors, IAs, wealth managers, etc., and especially the CFP BoS, to step up their game and place client interests first – in writing – by demanding ERISA-like fiduciary status at all times. The public will demand it; soon enough – we guarantee it.

Link: www.fi360.com

Link: https://healthcarefinancials.wordpress.com/2009/03/01/an-interview-with-bennett-aikin-aif%c2%ae/

Oh; to be Treated as Adults!

Now, wouldn’t it be a relief for example, if the arcane rules, and feigned or failed microscopic/micromanaged oversight of the SEC, FINRA and various BDs – that we all abhor – might be someday rendered obsolete? Wouldn’t it be nice to be treated as an adult; not a juvenile employee in need of constant supervision? Then, the march to autonomy may begin, as FAs/IAs/CFP® become treated as professionals, and not sub servant agents, or …. registered representatives.

Assessment

Therefore, we personally thank Dr. Basu’s for his attached and unedited reply, specifically written and personally addressed to our Publisher and all ME-P readers and subscribers:

Dear Dave:

My response is attached.

Best regards.

Som (Dr. B)

Link: soms-reply1

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Dictionary of Health Economics and Finance
Dictionary of Health Information Technology and Security
Dictionary of Health Insurance and Managed Care

Filed under: "Advisors Only", "Ask-an-Advisor", Alerts Sign-Up, Breaking News, Career Development, Ethics, Financial Planning, Insurance Matters, Interviews, Investing, Marketing & Advertising, Op-Editorials, Practice Management, Research & Development | Tagged: broker-dealers, california lutheran university, Certified Financial Planner Board of Standards, CFA, CFP, CMP, CPA, david marcinko, fiducairy advisor, financial advisor magazine, financial advisors, financial planners, FINRA, investoment advisors, MBA, PhD, registered representatives, SEC, Somnath Basu, Wall Street, wealth managers | 24 Comments »

Impact of Size on Mutual Fund Performance

Posted on April 8, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Vital Information for Doctors to Consider

[By Dr. David Edward Marcinko; FACFAS, MBA, CMP™]

[By Professor Hope Rachel Hetico; RN, MHA, CMP™]

The actual size of a mutual or index fund, in terms of amount of assets, and the growth rate of a fund are the two aspects of size to consider. The impact of size on mutual fund performance varies—it can be negative, neutral, or positive. Size affects different types of funds differently; it also affects the manager’s ability to achieve objectives. Monitor size changes and make investment decisions accordingly.

Economies of Scale

A relatively large amount of assets available to a portfolio manager presents various economies. The costs at most funds (e.g., expense ratios) are reduced as a percentage of net asset value as the fund grows. Expense ratios can have a major impact on performance. In addition to being an effect of size, low fees can cause size changes. Funds do at times waive some fees to attract assets.

Asset Base

A larger asset base provides more liquidity to a fund. With more assets, the manager can buy more shares and more stocks. Transaction costs are reduced if higher trading volumes are achieved. A larger asset base also can reduce relative tax costs. Realized but undistributed capital gain can be spread over more shares at the time of year-end distribution. A larger asset base and manager success attracts higher-caliber managers to the management team.

Fund Growth

Growth of fund assets impairs certain funds more than others. Generally, bond funds are less affected by asset growth and size than equity funds. Growth may have a positive impact on bond funds because buying bonds of similar characteristics further diversifies credit, event, and other risks. Equity funds that invest in larger capitalization stocks can be less affected than funds buying less liquid small-cap stocks. (This is so because funds usually limit their investments in a single company, i.e., many funds will not buy more than 5% of a specific company. Five percent of a small company uses up less cash than 5% of a large company. Therefore, a small-cap fund is more likely to exhaust its choice of available companies sooner than a large-cap fund. A large-cap fund could increase its investment to a 5% level, whereas a small-cap fund may already be fully invested in the companies the manager likes to own.)

Growth Rate

The rate of growth can affect performance. Rapid growth may mean that a large portion of the portfolio remains un-invested. A rapidly growing growth-type equity fund with a high percentage of cash earns lower returns in a rising market than a fully invested fund. With rapid growth, the fund may not provide pure exposure to the desired asset class. At a certain point, however, fund asset growth impairs the manager’s ability to achieve objectives. For this reason, funds often close to new investors or to new investment once they have reached a certain size. Growth affects managers in many ways. Many fund managers or teams of managers direct a number of funds and possibly even private accounts. As the fund grows, managers are spread thin and may have difficulty in reacting quickly or efficiently to changing market conditions. Managers may need to hire assistant portfolio managers or delegate work to analysts or other employees. As a result, the manager manages people, administration, or internal quality control systems rather than studying companies or investment strategies. Also, a manager may become complacent in periods of rapid asset growth. Such growth can mean their own compensation is substantially greater, which may in turn change the manager’s motivation. Rapid growth often changes a fund because there are not enough opportunities to invest in the targeted securities. For example, a fund can change from aggressive to conservative, small cap to large cap. Managers may have to slow trading or increase liquidity in the portfolio to prevent this occurrence.

Meaningful Positions Difficult

Rapid growth or a large asset base can prevent managers from taking meaningful positions in market sectors they believe will outperform others. Smaller funds are more flexible and may take advantage of opportunities or liquidate unwanted positions faster than larger funds. A large fund that owns a significant position will negatively affect a security’s market price if it unloads shares all at one time. Rapid growth also impairs research of funds, affecting an investor’s choice of funds. A fund with outstanding performance over the past 5 years and a $150 million asset base may be much different when its base grows to $1 billion; at that point, it may no longer be the “right choice” for an investor.

Asset Declinations

Just as rapid asset growth affects performance, a rapid decline of fund assets also may impact performance. Significant quantities of redemptions over short periods force managers to liquidate security positions, often at the wrong time (i.e., they would rather be buying in a declining market than selling to accommodate redemptions). To prevent this scenario, some funds have redemption charges to discourage investors from such short-term decisions. Such environments can negatively impact bond funds as easily as equity funds. Large redemptions compound the effect of declining fund net asset values.

What a Doctor-Investor Can Do?

What can physician-investors do to avoid negative effects on investment? Avoid overloading a portfolio with hot, rapidly growing funds, if possible. Generally, size should be a neutral factor for most bond funds. Small and/or aggressive equity funds can be affected by growth, however. Emphasize funds that promise to close to new investors after assets reach a certain size. Once a fund becomes large, monitor it closely for problems caused by the growth. If there is a better, smaller fund, it may be wise to change. Also, closed-end funds are always a possibility. These funds have a major advantage in that their asset base is a factor of growth in security values, not new investment (unless the fund makes a secondary stock offering). Closed-end managers work with a finite portfolio, which reduces the problem of sudden asset growth.

Assessment

To the extent that a lack of SEC and FINRA over-sight, and the recent financial, insurance and banking meltdown has affected the above; such investing is left up to the doctor’s discretion and personal situation. When it comes to the financial services product sales industry; always remember “caveat emptor” or “buyer-beware.”

Disclaimer: Both contributors are former licensed insurance agents and financial advisors.

Conclusion

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Filed under: Experts Invited, Financial Planning, iMBA, Inc., Insurance Matters, Investing, Media Mentions and PR, Op-Editorials, Portfolio Management, Recommended Books, Risk Management, Taxation | Tagged: CFP, CMP, CPA, david marcinko, DDS, DO, DPM, financial advisors, Financial Planning, fund assets, fund costs, fund expenses, fund growth, fund managers, fund size, hope hetico, index fund, index fund size, Investing, MD, mutual fund expenses, mutual fund performance, mutual fund size, OD, physician investors | 2 Comments »

How Doctors Pay for Wealth Management Services

Posted on March 30, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Many Methods Possible and Often Confusing

[By Dr. David Edward Marcinko; FACFAS, MBA, CMP™]

What is of the utmost importance to a physician-investor is: (1) to have a plan, (2) a means of implementation and monitoring investments, and (3) a process to review goals and objectives in the future. Some or all of these steps may require the supervision of a financial planner or fiduciary investment advisor. “Professional” advisors who assist doctors and investors with the development of an investment plan also may become involved with implementation, monitoring, and performance reporting. Other “advisors” work only with plan development, referring implementation and supervision to others.

Basic Methods

There are three basic methods of payment for professional investment management: by commission, fee only, or a combination of the two. The method of payment used depends on the type of service provided and on who provides it.

1. Commissions

Some advisors who assist investors with investment planning, implementation, monitoring, and reporting do not charge a direct fee. They provide planning services for no charge if investors buy and sell the investments that they recommend. Investment brokers who are licensed to buy and sell securities may use the resources of a brokerage firm to assist investors with planning.

Commission-based advisors generally will recommend load mutual funds, thereby receiving either front-end or trail commissions. Trail commissions are paid over time or as a fee based on a percentage of the account value, similar to a 12b-1 fee. Brokers may provide or recommend professional money managers affiliated through their brokerage firm. The broker is paid directly or indirectly by some form of referral fee, or through a trading commission arrangement with the money management firm.

2. Only Fees

Fee-only professionals provide planning and supervisory services for a fee. The fee may be a flat periodic fee, an hourly fee, or a percentage-of-assets fee. Investment planning often is paid for by a flat or hourly fee. Supervisory services (encompassing implementation), monitoring, and reporting, often are paid by the hour or as a percentage-of-asset fee. Percentage-of-asset fees usually are tiered based on the size of the account.

3. Combination Fees and Commissions

Many investment professionals use a combination of commission and fee planning. They may charge a nominal fee for planning and discounted commissions for other services. Another combination is the fee offset, in which a flat or similar fee is charged and then is reduced by commissions, referral fees, and similar charges earned by the planner or advisor.

Registration

Investment advisors registered with the SEC may provide fee-only services. Registration does not guarantee the investor is using a competent investment advisor or money manager as it is required for those advisors giving investment advice.

Certifications and Designations

Many professionals become certified by a peer or professional group to provide fee-only services. They must pass exams and otherwise demonstrate some level of competence to obtain and maintain certification marks. Certified Financial Planners (CFPs®), ChFCs Chartered Financial Consultants [insurance industry], personal financial specialists (PFSs, who also must be CPAs), and more than 100 others can advise investors. Within these designations, there are so called “specialists” in areas of investment planning (on a more sophisticated level), implementation, and supervisory services. Except for CPAs and Certified Medical Planners™; none of these “advisors” are truly fiduciaries.

www.CertifiedMedicalPlanner.com

Supervisory Service

Supervisory services can be basic or sophisticated. In the simplest form, an advisor monitors the implementation process and periodically reviews the investment plan to assure that it is being followed. These advisors delegate or let the investor delegate the selection and supervision of actual investments to other brokers, investment managers, etc. Other advisors take a more direct role in the selection and supervision of brokers, investment managers, and mutual funds. At a more sophisticated level, an advisor prepares periodic reports, uses software to monitor and review portfolio structures, and implements strategies and tactical asset allocation decisions.

Assessment

To the extent that online trading, deep discount brokerages, lack of SEC and FINRA oversight, and the recent financial, insurance and banking meltdown has affected the above, investing – with or without an advisor – is left up to the physician. Generally, all fess are, and should be, negotiable. When it comes to the financial services product sales industry; always remember that most of these folks are salesmen; so always remember “caveat emptor” or “buyer beware.”

Disclaimer: The author is a former licensed insurance agent, Certified Financial Planner® and founding principal of the Certified Medical Planner™ online educational program, in health economics and medical management, for financial advisors and healthcare consultants.

Conclusion

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

DICTIONARIES: http://www.springerpub.com/Search/marcinko
PHYSICIANS: www.MedicalBusinessAdvisors.com
PRACTICES: www.BusinessofMedicalPractice.com
HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
CLINICS: http://www.crcpress.com/product/isbn/9781439879900
ADVISORS: www.CertifiedMedicalPlanner.org
BLOG: www.MedicalExecutivePost.com
FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Filed under: "Doctors Only", Alerts Sign-Up, Funding Basics, Investing, Op-Editorials, Portfolio Management, Sponsors | Tagged: 12b-1, certified financial planner, certified medical planner, CFP, ChFC, CMP, commissions, CPA, fee only, financial advisors, financial planners, FINRA, PFS, registered investment advisor, registration, RIA, SEC, Series 63, Series 65, Series 7, stock broker, wealth manager | 3 Comments »

Our Valued ME-P Sponsors and Vendors

Posted on March 26, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Dear ME-P Advocates and Colleagues

Many thanks for reaching out to us.

Ann Miller; RN, MHA

Advertise with Us

If you want the opportunity to reach a personalized daily/weekly audience of health care industry insiders, innovators and watchers, the Medical Executive-Post may be right for you?

Movers-Shakers

We are discussed, read and viewed by medical students, physicians, dentists, podiatrists, optometrists and industry analysts; as well as healthcare administrators, financial advisors and planners, accountants, lawyers, office managers, CXOs, CFOs, investors, Wall Street insiders and nurse-executives from health systems around the country. Advertise with us and you’ll put your brand name in front of a smart & tightly focused demographic; one at the forefront of our emerging healthcare marketplace of collaboratively informed, thought-leaders and professional “movers and shakers.”

Get our Free Blog Widget

And, you may place our blog widget on your website or blog, for free.

Link: https://healthcarefinancials.wordpress.com/widget-for-the-me-p/

Contact Us

And so, please feel free to contact us for additional sponsorship and/or advertising information.

www.HealthcareFinancials.wordpress.com

Thank you

Ann Miller

Executive Director

MarcinkoAdvisors@msn.com

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Filed under: Experts Invited, iMBA, Inc., Marketing & Advertising, Sponsors | Tagged: advertising, CFAs, CFPs, CMPs, CPA, dentists, doctors, FAs, financial advisors, Health Insurance, healthcare economics, Healthcare Finance, Healthcare Organizations, hospitals, lawyers, marketing, MBAs, ME-P, medical executive post, osteopaths, PhDs, podiatrists, Sponsors, vendors | Leave a comment »

Apply to our Financial Advisor Consultant Listing Service

Posted on March 22, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

We’re collecting information on financial advisors, financial planners, accountants, attorneys and/or related folks in the Health 2.0 space who have a particular affinity or expertise advising doctors, nurses, medical professionals, and related others. And, we have been for some time, now.

New Channel Development for Medically Focused Financial Advisors and Management Consultants*

Beta-in-Progress

By Ann Miller; RN, MHA

[Executive Director]

A New Approach

Unfortunately, this usually means that some really interesting and smart folks, who purchase our books, dictionaries, print-journal, blog or email us; may get lost in the confusion. The result is that too many great medically focused consultants that we’d love to hear about are getting lost in the shuffle. And so, we’re trying something else instead.

Tell us about your Practice

Tell us about your financial advisory practice, and you may end up being mentioned in dispatches, or featured on a separate channel that we are developing. Selection and inclusion criteria include but are not limited to the following credentials:

Undergraduate or Graduate degree
Industry acknowledged certification or designation
Clean CRD record
Clean criminal record
Insurance agents need not apply
Stock brokers need not apply
Fiduciaries are encouraged
RIAs and independent advisors are encouraged
Published authors or educators are encouraged
Mission statement on physician niche focus required.

Assessment

So, if you want our readers to pay attention to your financial advisory practice or firm, this will get it into a systematic review process starring our crack staff. Otherwise you may face the peril of lost notoriety to other non-specific niches; or referral sources.

Publisher’s Note: The inclusion or rejection decision is final; but not set in stone and our terms and conditions may change without notice; the beta project may also be cancelled at any time. We reserve the right to reject anyone, at any time, for any reason or no reason at all. This is a beta project-in-development. The advisors listed are not affiliated or endorsed by iMBA Inc., in any way. This is an advertisement opportunity only.

*NOTE: There is a $120 annual fee for this listing service. It is waived for subscribers of our two volume companion print journal, upon request. www.HealthcareFinancials.com

List Link: https://healthcarefinancials.wordpress.com/schedule-a-consultation/financial-advisor-listings/list-of-advisor-consultants/?preview=true&preview_id=8633&preview_nonce=a3203ab9f9

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. What do you think about this idea to develop a new promotional channel for truly physician focused financial advisors?

Get our Widget: Get this widget!

Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Filed under: "Advisors Only", Breaking News, Career Development, CMP Program, Ethics, Financial Advisor Listings, iMBA, Inc., Marketing & Advertising, Sponsors | Tagged: CFA, CFP, CPA, Financial Advisor Listings, financial advisors, financial consultants, financial planners, MBA, PhD, wealth managers | 1 Comment »

Avoiding an IRS Appraisal Audit

Posted on March 20, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Valued Friends and Colleagues

By Linda Trugman; CPA, CVA

We hope this e-mail post finds you well. We have attached our most recent newsletter “Valuation Trends” for your perusal and hope you find something of interest in it; especially “20 Ways to Avoid an IRS Appraisal Audit.”

Link: trugman-valuation

Assessment

As a reminder, our updated website at www.trugmanvaluation.com includes a resource center which provides additional information that might be useful to you including sample reports, various conference presentations and podcasts.

Conclusion

We are available to assist you, and your clients, with your valuation and litigation support needs and look forward to hearing from you. And so, your thoughts and comments on this Medical Executive-Post are appreciated.

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Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Filed under: "Advisors Only", Accounting, Practice Management, Practice Worth, Taxation | Tagged: CPA, CVA, medical appraisals, medical practice value, medical practice worth, medical valuations, Trugman Valuation Associates | 2 Comments »

About National Compliance Services, Inc.

Posted on January 26, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Want, Need or Risk Reduction Mechanism?
Staff Reporters

As readers and subscribers to the Medical Executive Post, and our related print periodicals, dictionaries and books are aware, choosing the right financial consulting firm, or consultant, is always a challenging task www.HealthCareFinancials.com Today, this is true more than ever, given the financial meltdown and the all too obvious shenanigans of Wall Street www.HealthDictionarySeries.com Lay and physician investors alike are affected; along with related financial advisors of all stripes, degrees and designations [spurious or more credible] www.MedicalBusinessAdvisors.com

National Compliance Services

According to the National Compliance Services, Inc. [NCS] website, an experienced team of customer-oriented professionals is in place that strives to meet personal and corporate compliance needs so that clients can focus on areas of expertise www.NCSonline.com

A Protean Focus

NCS operates in the financial compliance and regulatory services industry. Its strength may be in providing efficient, and reasonably priced products and services for many different sub-arenas, such as: investment and financial advisors, hedge and mutual funds, stock-brokers and broker-dealers. Their customized services are designed to structure a compliance program that is appropriate for any individual, or firm’s unique regulatory needs. NCS works to ensure compliance with applicable federal and/or state rules and regulations.

Range of Products and Services

NCS has offered its personalized services to more than 6,000 clients, both domestically and internationally. Their consultants include former regulatory examiners, accountants, attorneys, and other individuals with extensive hands-on industry experience.

Verification Services

NCS also offers a standard or customized line of verification services to Mutual Funds, Hedge Funds, Custodians, Broker-Dealers, Investment Advisers, and Third-Party Vendors. Verification services can be customized to include any or all of the following:

Firm Registration/Notice Filing with the Proper Jurisdiction(s)
Adviser Representative Registration(s)
Adviser Representative Degree(s) or Professional Designation(s)
Firm Reported Disciplinary History
Adviser Representative Reported Disciplinary History
Proper Registration of Solicitors
Proper Registration of Wholesalers and Third-Party Vendors
Bank Background and Activity Reports, and
OFAC Checks, etc.

Assessment

Moreover, claims of verification for over 15,000 Registered Investment Advisers, and Investment Adviser Representatives, seem plausible. For example, NCS recently contacted www.CertifiMedicalPlanner.com to verify the good-standing of a member and charter-holder.

Contact Info:

For further information, please contact:

Alex Aghyarian
National Compliance Services, Inc
Verification Technician
Phone: 561.330.7645 ext 302 and Fax: 561.330.7044
aaghyarian@ncsonline.com

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Verification in most any space is worthwhile of course; but is membership in a vague or nebulous organization helpful or harmful to the uninitiated?

Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Financial Advisory “F” Bomb

Posted on January 19, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Placing Client Interest before Self-Interest

Staff Writers

We are taking an informal poll, and are asking two key questions of financial intermediary modernity.

#1. As a financial advisor, regardless of designation, do you require a brokerage arbitration agreement; or not? Why or why not?

#2. Does this document place client interest first – as in a true fiduciary relationship – at all times? Please explain your rationale.

#3. Regardless of your philosophy – pro or con – regarding the use of arbitration agreements, do you give clients the option of selecting a fiduciary relationship; or not? Is it in writing?

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Please respond; clients, doctors, laymen and FAs; etc. Is this query the ultimate “F” bomb?

Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Filed under: "Advisors Only", Career Development, Ethics, Investing, Point-Counter Point, Research & Development, Voting Polls | Tagged: arbitration agreements, CFP, CMP, CPA, FA, fiduciary, IA, stock broker | 7 Comments »

How to Hire a Medical Accountant

Posted on September 18, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Seek Healthcare Specificity

Staff Reporters

Use these 25 questions to educate yourself about accountants. And, use this 25-point checklist on how to pick a good healthcare focused CPA. It can be a powerful list for any medical professional and might help you bring in extra money, immediately.

Other Areas

In the areas of estate planning and financial planning, it is essential that doctors have a good team of financial professionals. This usually involves, at the very least, a CPA, an attorney, and a fiduciary focused financial advisor [maybe].

CPAs

If you are a CPA for docs, use this list as a reference for your doctor-clients. By bringing up the concept of due diligence on your own, it strengthens your position and makes a perfect opportunity to ask for referrals. You may also want to use this list as a newsletter insert or advertisement of some sort. Put a brief notice at the top of the list stating that doctors should ask their CPAs these questions, and if they need someone who fulfills these requirements, you would be glad to meet with them to discuss the questions.

Financial Advisors

As an FA, use this list as a networking tool. Refer your clients to a competent CPA who you already do business with or would like to do business with. When you refer clients to a good CPA, you open the opportunity for him or her to return the favor. Send this list to your existing clients at tax time as a neutral third party to help them find a good CPA (they already have a good financial advisor—you).

Attorneys

As an attorney, use this list the same way a financial advisor or account would—to network with the top CPAs and MDs in town. You can make it a standard piece in your mailings or newsletters once a year. When you start giving leads to other financial professionals, it will open up referrals that will be beneficial to your business.

Certified Medical Planner®

And, if you are a CPA, FA or attorney, be sure to promote your hard-won credentials for healthcare specificity; like the Certified Medical Planner® designation, for example.

25 Questions to Ask Your Future Accountant

What designations or credentials do you have?
Are you in practice full-time?
How many years of experience do you have in tax practice?
Do you do all your returns by computer?
What are your fees, and do you have a schedule that I can see?
Can you provide references from other businesses similar to my own?
Do you use any checklists to maximize my deductions?
How soon do you return calls from clients?
Do you teach any tax courses or have you written for any tax publications?
Are you conservative, aggressive, or somewhere in the middle?
What review process do you use in order to ensure a quality product?
Do you specialize in taxes?
What percentage of your practice relates to taxes?
What other accounting services do you personally perform?
May I look at your tax library?
What do you do after tax season?
How often do you take tax courses?
What is your attitude toward audits?
How do you treat gray areas?
Have you ever been disciplined by the IRS, the SEC, or any accounting society?
How many other clients like myself do you have?
Do you offer pre-year-end tax planning as part of your tax service? If so, is there an extra fee for this?
Are you generally familiar with current health law and managed care policy?
Do you offer any tax planning during the year?
Can you give me a recent tax planning tip or tax change that may benefit me?

Finally, and most importantly of all; how do all of the above synergize into medical and healthcare specificity, for me?

Assessment

As you likely now realize, this list is not for CPAs only; but as a due diligence reminder for most fiduciary financial advisors professionals or attorneys who wish to work with doctor clients; “often the most difficult clients in the business.”

Disclosure

Dr. David E. Marcinko MBA, our Publisher-in-Chief and former CFP®, is founder of the online CMP® program in healthcare economics, management and finance for advisors www.CertifiedMedicalPlanner.com

Conclusion

Your thoughts, opinions and comments are appreciated.

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Filed under: Accounting, Financial Planning, Health Law & Policy, Practice Management | Tagged: CFP, CPA, FA, JD | Leave a comment »

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