Executive SummaryContinuing our series for the 2011 FPA NorCal regional conference, here are the highlights from Day 2, as broadcast from the incredibly active Twitter stream on the #FPANorCal hashtag!
jbrentburns: Day 2 at #FPANorCal. Speaker line up continues to impress.
BillWinterberg: Gearing up for the second day of #FPANorCal. Shameless promotion to come see my presentation at 1:15 in Pacific Heights.
CarolynMcC: Day Two of #FPANorCal. Shameless promotion to come see my presentation on health care reform at 10:15. Presidio is the room.
MichaelKitces: Sitting down for Reichenstein’s "Asset allocation, location, & withdrawal strategies in the presence of taxes." #FPANorCal
mkcorbin: "Advice kills conversation." Peter Block Kurtz #FPANorCal
mkcorbin: For the first 40 years, fps have been leveraging what they know to help people who don’t have that knowledge."Kurtz #FPANorCal
jbrentburns: Govt is a silent partner on your client’s IRA. They own a share of the fund. The tax liability. Reichenstein #FPANorCal
MichaelKitces: Question: Do you adjust your asset allocation if bonds are in IRA (Uncle Sam owns part) but stocks are in taxable acct? #FPANorCal
MichaelKitces: The traditional approach to asset allocation exaggerates the exposure to the dominant asset in the IRA/401k. -Reichenstein #FPANorCal
MichaelKitces: Ignoring taxes in your allocation assumes future tax rate 0%; Future tax estimates are tough, but 0% is def wrong! -Reichenstein #FPANorCal
MortgageNudge: Fiduciary is appropriate for long-term relationships. Suitability, for transactions. Kurtz #FPANorCal
MortgageNudge: Four duties of Fiduciaries: Care, Honesty, Loyalty, Utmost care to put client interest first. Kurtz #FPANorCal
mkcorbin: The annual update is fp at its best: rediscovery, new issues, review, investment perf, NEXT BEST STEPS. Buie #FPANorCal
MortgageNudge: Does exchange of money between client & advisor create conflict of interest? Kurtz says No, especially if transparent/disclosed #FPANorCal
jbrentburns: Would you rather give the govt 15% of stock returns or 28% of bond returns? Reichenstein #FPANorCal
MichaelKitces: Stocks belong in taxable accounts b/c taxes mean gov’t shares return AND risk. -Reichenstein #FPANorCal
mkcorbin: It’s not that you can’t do anything with active mgt, it’s that you can never do *enough* to offset the time and $ it takes.Buie #FPANorCal
MichaelKitces: Not sure I agree!! RT @mkcorbin Not that you can’t do active mgt; you can’t do *enough* to offset time & $ it takes. Buie #FPANorCal
jbrentburns: Asset location advice. Bonds REITs and others subject to ordinary income in tax-deferred accounts. Reichenstein #FPANorCal
MortgageNudge: When clients act, is it because they Understand our advice, or because they Trust? Kurtz making case 4 fiduciary standard. #FPANorCal
jbrentburns: Asset allocation is more important than asset location decision. AA first then tax manage. Reichenstein #FPANorCal
MichaelKitces: Reichensten’s work is intriguing but I’m not sure I agree w/ all of his assumptions & therefore conclusions. Will dig further. #FPANorCal
jbrentburns: Govt shares some of the risk when stocks are in taxable. You can write off the loss. Reichenstein #FPANorCal
mkcorbin: I’m impressed by the level of the questions in the Alternatives session. Audience keeping presenter on his toes. #FPaNorCal
MortgageNudge: Future of financial planning – everyone needs a planner… Everyone, including advisors. Kurtz #FPANorCal Do you agree?
jbrentburns: When taxable income is low, convert to a Roth or move excess income from IRA to taxable to reduce tax liability. Reichenstein #FPANorCal
mkcorbin: The brilliant and wonderful Bill Reichenstein presenting @ #FPANorCal. An exceptional academic mind a generous contributor to the profession
mkcorbin: Everyone in this country wants the best of care for themselves but doesn’t want to pay for it for others -McClanahan #FPANorCal
jbrentburns: Roth IRA or traditional? Do you expect to be in higher bracket now or at retirement? Now-IRA, later-Roth. Reichenstein #FPANorCal
mkcorbin: If you’re thinking about getting your teenager implants, do it now, because the cost is going up. McClanahan #FPANorCal
mkcorbin: The problem with this country is that we have a fix-it mentality, not a prevention mentality.McClanahan #FPANorCal
MortgageNudge: From something as basic as cash flow, we understand their money decisions better than we ever could have before -Kurtz #FPANorCal
MichaelKitces: Spend taxable accts first, then use tax-deferred to fill lower tax brackets & Roth for the rest. -Reichenstein #FPANorCal
mkcorbin: Healthfinder.gov– put in age & gender & it will tell u what preventive care to do.McClanahan #FPANorCal
mkcorbin: MDs incented to offer preventive care + patients incented to follow through w/ preventive care = we get healthier McClanahan #FPANorCal
jbrentburns: Balancing retiree and heirs. Whoever has lowest tax rate should spend the IRA. Reichenstein #FPANorCal
MortgageNudge: Cash Flow sits at the intersection of Life Conversations and Financial Conversations. Kurtz #FPANorCal
MichaelKitces: Convert funds in Roth to raise taxable income to top of "low" tax bracket for client. -Reichenstein #FPANorCal // I’ve written on this too.
MortgageNudge: Cash flow planning deals with the client’s life, and transforms their money. Kurtz #FPANorCal
mkcorbin: Healthcare.gov has ratings on doctors, hospitals, etc. McClanahan #FPANorCal
mkcorbin: If you put off development of an ethical will until you’re older/wiser/etc you’ll never "get around to it" Turnbull #FPANorCal
mkcorbin: Before we can move up the mtn, we have to replenish the camp and tell those behind us what to expect from the ascent Turnbull #FPANorCal
MichaelKitces: Not everybody can create value finding cheap stocks. We can all create value implementing optimal tax strategies. -Reichenstein #FPANorCal
MichaelKitces: Networking lunch at #FPANorCal – hearing inspiration stories about volunteerism from @cfpboard Ambassador Lynn Ballou and others.
MichaelKitces: "People don’t care about how much you know until you show them how much you care." Volunteer. #FPANorCal
MortgageNudge: Frank Pare, FPA East Bay member and unstoppable force behind Financial Planning Days. Thanking us… Thank you Frank! #FPANorCal
MortgageNudge: FPA President Marty Kurtz – I can’t tell you how proud I am to be part of this organization." #FPANorCal
MichaelKitces: Next up at #FPANorCal – "Flatter distributions & Fatter tails" – Marc Seidner from @PIMCO
MortgageNudge: Cultivating Clients in a Connected World, with Bill Winterberg just getting underway. #FPANorCal
mkcorbin: People think that the best thing that can happen is for them to get a refund. Noard #FPANorCal
MichaelKitces: Important theme & mindset shift: when you must consider default risk in addition to interest rate risk on gov’t bonds. -Seidner #FPANorCal
MichaelKitces: When default risk is a material concern for gov’t bonds, what’s the risk free rate? -Seidner #FPANorCal
MichaelKitces: If the US isn’t the global growth engine going forward, we REALLY need to re-evaluate our home country investing bias. -Seidner #FPANorCal
MortgageNudge: Facebook approaching 700 million users. If it were it’s own country,would be 3rd largest in world. Winterberg #FPANorCal
MortgageNudge: Tomorrow’s client will find you (inbound marketing) than you finding them through traditional outbound marketing. Winterberg #FPANorCal
MortgageNudge: Two-way communication, client centric – changes language from "our firm" to "your firm," "our team" to "your team.". @winterberg #FPANorCal
mkcorbin: Be Accessible: If your clients Google you, will what they find be accessible and relevant? Winterberg #FPANorCal
MichaelKitces: Default is not just about the ability to pay. It’s also about the will. Sometimes countries choose to default. -Seidner #FPANorCal
MortgageNudge: Website needs to become more than brochure, add blog. Need content? What do clients bring up in meetings? @BillWinterberg #FPANorCal
MortgageNudge: Next generation of clients going to demand mobile access to your information. Need to optimize website 4 mobile. @BillWinterberg #FPANorCal
MortgageNudge: Optimize your website? Keep it simple; drop Flash; get rid of Frames. @BillWinterberg #FPANorCal
mkcorbin: Mkt value not the same as replacement cost. Get replacement cost appraisal.Trouette #FPANorCal
MichaelKitces: Defaulting on gov’t w/ modest writedown doesn’t help; debt/GDP will still be high. If country defaults, it’ll go big. -Seidner #FPANorCal
mkcorbin: Ordinance & Law limitations: Means must build to new code or comply w/ ordinance.Trouette #FPANorCal
sabrinalowell: Client adoption rate for website portals is only 1 in 10. Go with a sync’d option. @billwinterberg #fpanorcal
mkcorbin: With UL, its strengths are also its weaknesses. Maurer #FPANorCal
mkcorbin: I don’t think life ins. is a good investment AND I don’t think investments are good life ins. Maurer #FPANorCal
sabrinalowell: Engage in "social listening" or you’ll miss opportunities @billwinterberg #fpanorcal
mkcorbin: The rate you pay for term has everything to do w/ quality of underwriting. Maurer #FPANorCal
MortgageNudge: When Loans Go Bad: Strategic Considerations in Selecting Short Sale or Foreclosure, w/Robert Jacobs – coming up in 30 minutes. #FPANorCal
BallouPlum: Great #FPANorCal conference: TY for great reception as SF-based CFP Ambassador and new CFP public awareness campaign!
mkcorbin: Why invest in emerging mkt debt? Sovereign diversifier, pos. fundamentals, attractive valuations Ceva #FPANorCal
mkcorbin: Emerging mkt debt falls on the sustainable side of the spectrum (esp compared to developed countries eg Greece, US, Ire.) Ceva #FPANorCal
MichaelKitces: Last #FPANorCal breakout of the day… "Personal Introductions: Perfecting the Art of the Ask" (for client referrals) – Craig Bartlett
mkcorbin: Survivor’s trust and credit trust– terminology clearer for aging clients than AB trust. Nearn #FPANorCal
mkcorbin: QTIP trust has better "control from the grave" than AB trust Nearn #FPANorCal
mkcorbin: Disclaimer trusts about to get really popular, AB trusts to mostly die out. Nearn #FPANorCal
MichaelKitces: Using scripts & practicing how you ask for referrals is NOT unprofessional. Unpracticed bad scripts are unprofessional. -Bartlett #FPANorCal
MichaelKitces: Planning is a verb, not a noun. It’s a process, not something you do once. -Bartlett #FPANorCal
mkcorbin: @MJAnderson96, yes, portablity. Better control from the grave with QTIPs, Disclaimer trusts better if c-f-g not an issue #FPANorCal
mkcorbin: If it wasn’t for the guarantee, would I still invest in these products. Don’t be mesmerised by rolloffs/lock-ins.Stein #FPANorCal
mkcorbin: Ins product developers smart– they aren’t making a dumb bet with 10yr bond guars, it’s cheaper to hedge long-term risk Stein #FPANorCal
MichaelKitces: Wrapping up #FPANorCal with prize drawing. Congrats to the winners!
MortgageNudge: Special thanks to @sabrinalowell for work as conference chair #FPANorCal !!!
MortgageNudge: Final tweet before leaving #FPANorCal: "the members of FPA are carrying the ball for the profession." Marty Kurtz, FPA President
MichaelKitces: Thanks everyone for following on #FPANorCal tag. Stay tuned for more conference highlights on my blog at www.kitces.com/blog
FinTechie: #FPANorCal was awesome this year. Congrats to all involved!
CarolynMcC: Best part of conferences is enjoying the cities after. San Francisco and #FPANorCal great week
Stay tuned for more highlights from the Greg Valliere closing keynote session!