Archive for March, 2012
Even as the health insurance industry openly warns about a doomsday scenario that would throw the market into chaos, Wall Street seems pretty optimistic about the Supreme Court’s decision on health care reform.
Share prices for big publicly traded health insurance companies like UnitedHealth Group and WellPoint jumped on Thursday. Traders reacted with optimism that when the Supreme Court rules on the constitutionality of health care reform, the decision won’t disadvantage insurers, according to an analysis by TheStreet.com.
Aetna led gains, reaching a 52-week high of $49.90 before closing at $49.56, a 6.5 percent hike from its opening price on Thursday. Coventry Health Care rose 5.9 percent to $34.60 and UnitedHealth closed up 4.8 percent at $58.11. The other three big health insurance companies — WellPoint, Humana, and Cigna — also saw gains in New York Stock Exchange trading.
The financial markets have had a more positive stance over the last two years toward the impact of health care reform on insurance companies than the firms themselves. The reason: profit margins are up and share prices have risen since President Barack Obama signed health care reform into law in March 2010, according to a study by Bloomberg Government.
Another reason why investors may not be panicking is that health insurance companies make a lot of money on lines of business that wouldn’t be much affected by whatever the Supreme Court does. Most Americans with health coverage get it at work and health insurance companies also have lucrative Medicare and Medicaid contracts that wouldn’t go away.
The Supreme Court spent the first three days of this week hearing oral arguments in a challenge against health care reform brought by 26 states and other plaintiffs. The chief issue is the law’s individual mandate that most U.S. residents obtain health coverage starting in 2014 or face a tax penalty. The plaintiffs contend it’s an overreach by the federal government while the Obama administration argues it’s necessary to regulate the national health care market. A ruling is expected by the end of June.
Court watchers on Wall Street may be keying on Chief Justice John Roberts saying “without the mandate, the whole thing falls apart” during yesterday’s session, according to TheStreet.com. Some believe this suggests Roberts is inclined to invalidate the entire law if he determines the individual mandate to be unconstitutional.
The health insurance industry and the White House contend the mandate is so closely tied to insurance-market reforms in the law that they should stand or fall together. The Court’s four liberal members are expected to support upholding health care reform and Roberts and Justice Anthony Kennedy are viewed as the most likely of the five conservatives to join them.
The Court could uphold the entire law, overturn the whole thing or repeal only portions of it, such as an expansion of Medicaid for the the poor or the individual mandate. Health insurance companies and the Obama administration are sounding the alarm about the latter outcome. Doing so would leave in place rules that insurers must sell policies to anyone who wants one, regardless of health status or age, and that limit their ability to charge higher premiums to people with bigger medical bills.
A full repeal of health care reform would deny health insurance companies access to the 24 million people protected to buy coverage through the law’s “exchanges” by 2019. But the health insurance industry lobbied hard against the health care reform legislation, suggesting the companies wouldn’t mind seeing the law disappear. Insurers have already incorporated some of the law provisions, such as not discriminating against children with pre-existing conditions, and may not jettison those policies even after a repeal. Other programs, including a government-funded health plan for adults with pre-existing conditions, would be nullified by repeal.
Source: Huffington Post
Posted by Steven Maimes, The Trust Advisor
J.D. Power and Associates Reports: Compensation Is Not the Primary Driver of Financial Advisor Satisfaction with Their Firm
Edward Jones Ranks Highest in Employee Advisor Satisfaction;
Commonwealth Financial Network Ranks Highest in Independent Advisor Satisfaction
Adhering to best practices regarding firm performance, technology, compliance and administrative support yield the highest levels of advisor satisfaction, even among advisors who receive payouts that are lower than industry average, according to the J.D. Power and Associates 2012 U.S. Financial Advisor Satisfaction Study released today.
The study measures the satisfaction of both employee advisors (those who are employed by their investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently). The study examines nine key drivers of employee advisor satisfaction: firm performance; compensation; contact; people; job duties; work environment; products and offerings to clients; technology; and services and support offered to financial advisors. The study also examines eight key drivers of independent advisor satisfaction: firm performance; contact; people; job duties; compensation; technology; products and offerings to clients; and services and support offered to financial advisors.
“Providing the right mix of technology and support to advisors, thus optimizing the time they spend with clients, has the biggest impact on satisfaction,” said David Lo, director of investment services at J.D. Power and Associates. “It’s no coincidence that the firms struggling with the key best practices identified in the study are also paying the highest retention and signing bonuses to compensate for a poorer work experience.”
The study also finds that firm performance continues to be the most important factor that drives advisor satisfaction among both employee and independent advisors. Satisfaction is based on advisors’ perceptions of their firm, including senior management that support the firm’s mission and values, the firm having a clear set of priorities and objectives and the firm acting in the best interest of clients.
“Ultimately, financial advisors want to work with a firm whose actions are in the best interest of clients,” said Lo. “Firms that stray from this fundamental principle diminish the connection with their advisors and eventually damage the overall culture of the firm.”
Lo said that the most common disconnects with senior management involve pushing non-investment products and services as well as keeping advisors from client-facing work due to excessive administrative burden.
Additionally, best practices pertaining to compliance, as well as administrative and technology support, have a significant impact on advisors’ perceptions of their firm. Best practices include technology and software solutions that are aligned and integrated with workflow processes and addressing and resolving compliance issues quickly and efficiently.
Advisor Satisfaction Rankings
Edward Jones ranks highest in overall satisfaction among employee advisors for a second consecutive study with a score of 901 on a 1,000-point scale, and performs particularly well in the technology and firm performance factors. Raymond James and Associates, Inc., ranks second overall (864), and performs well in the compensation and firm performance factors.
Commonwealth Financial Network ranks highest in overall satisfaction among independent advisors for a second consecutive study with an overall score of 917. The firm also earns high scores in the job duties, firm performance and technology factors. Raymond James Financial Services follows in the rankings (887), performing well in firm performance and firm’s services and support offered to financial advisors.
The 2012 U.S. Financial Advisor Satisfaction Study is based on responses of nearly 2,800 financial advisors. Survey sample and industry weighting was provided by Qualified Media and Investment News. The study was conducted between November 2011 and January 2012.
Posted by Steven Maimes, The Trust Advisor.
Advisors have fallen in love with tablet computers. But now that the applications are finally catching up, putting them to work in your practice requires actually rethinking your approach to time management, client presentations and even data security. Read the rest of this entry »
Dumping $1.4 billion business underlines the extreme pressure some insurance carriers have been facing, but retirement income experts say the variable annuity market is simply shaking out a lot of second- and third-tier competitors.
Annuities now account for the bulk of the Hartford Financial Services Group’s earnings, so the wealth management industry was stunned last week when the company unceremoniously pulled the plug on future sales and started winding down the business.
Hartford, of course, isn’t alone. Big names like ING, Sun Life and John Hancock have peppered the headlines over the last few months with similar announcements.
With all these names dropping out of the annuity business, advisors may be wondering what will be left on their retirement income shelf this time next year.
Turns out there will still be plenty of vendors happy to write this business — and there’s currently $240 billion of this business to write, according to the industry watchdogs at LIMRA, formerly known as the Life Insurance Marketing and Research Association.
Hartford was just a bit player anyway
Although Hartford’s decades of marketing have created huge brand recognition for its home and auto insurance lines, the company hadn’t been more than a niche player in the annuity business in a long time.
With “only” $1.4 billion in annuity sales, the company didn’t even make the Top 20 list of annuity vendors last year.
And given the infamously concentrated nature of the industry, you have to either go big or go home.
The ten biggest annuity carriers already write 61% of the total business. The next bracket is hanging onto another 18% share, leaving everyone else — including Hartford — to fight over the scraps.
So instead of Hartford being the canary singing about trouble brewing in the annuity coal mine, the real question is what that songbird was doing down there at all.
Analysts who follow the company are actually pretty pleased that this is happening.
“We think that this is the right decision for the company,” says John Nadel, who follows Hartford for Sterne Agee & Leach. “We applaud the actions.”
Not a bad business
The other annuity vendors departing the business were only marginally bigger players than Hartford, with only Sun Life even managing to capture a 1% share of the overall market.
If Sun Life couldn’t generate enough scale to keep selling new annuity contracts, everyone smaller — accounting for maybe $55 billion in annual sales — should definitely be thinking about their future.
Giants like MetLife, Prudential and Jackson National Life, on the other hand, are feeling no pain. Sales of variable annuities in particular soared 13% last year to a post-recession high, and these carriers have consolidated close to half of that high-margin business just between the three of them.
If anything, they’re even more eager to sell annuities than ever, given the way demand for these products spikes when the stock market looks rocky.
Jackson National, for example, was getting grief from its corporate parents last spring because its variable annuity business was so successful that it was crowding everything else off the map.
A year later, Jackson is still generating a staggering 64% profit margin on these products — sending a record $511 million back to corporate — and the executives have stopped complaining.
Scale is evidently the key here. Compare those huge margins to the money-losing proposition that a much smaller vendor like John Hancock was facing with its annuity business.
Between “volatile equity markets and the historically low interest rate environment,” Hancock restructured its annuity sales back in November.
Vendors like Hartford, crowded to the edges of the annuity industry, never quite recovered their balance after the 2008 market crash, when aggressive portfolio management imploded on carriers and sucked billions of dollars in capital off their books to pay promised benefits.
The leaders printed heavy losses too, but were big enough to survive. Smaller players are now acknowledging that they’ll never hit that scale.
Winding down contracts, not desperate for buyers
But since Hartford was earning relatively fat margins on its annuity sales, why dump that business?
Nadel thinks the big win for Hartford here is not so much in abandoning a profit center but in freeing up billions of dollars in capital currently tied up in the company’s life insurance contracts.
That money is better spent paying down debt and meeting the demands of activist shareholders like hedge fund king John Paulson, who owns 8.5% of the company.
Since the annuities ride alongside life insurance and Hartford’s retirement product sales, it doesn’t make much sense to keep them if those non-core businesses go on the chopping block, he says.
As it is, Hartford is perfectly happy to let its existing annuity contracts run down over the next decade or so — and the legacy book value there is worth about $10 billion.
Ironically, Paulson isn’t so cheerful, since he sees the company’s property insurance unit as the main problem.
And down on the street, annuity-focused advisors are actually booking strong sales and charging big commissions.
Just about all Americans are worried about protecting their retirement savings through volatile markets, and as LIMRA data points out, they’re as eager as ever to buy annuities and lock in at least part of their retirement income.
Annuities are even moving into retirement plan menus. For the victors, the spoils are going to get mighty sweet indeed.
Scott Martin, senior editor, the Trust Advisor
Wealth Advisors Trust Company marketing strategies have paid off in a big way. They are now in growth mode ready to land more directed trust account relationships.
The firm’s co-founder Christopher Holtby told us, “We are meeting our goals and could use an additional business development officer to help us land new accounts. “ They have just posted a job offering on ABA’s career job board. Readers can click here to apply.
Wealth Advisors Trust was recently included on the winners list of one on the most advisor-friendly trust companies.
Last year, the firm gained visibility with advisor by publishing a special report, “Directed Trusts Made Simple,” exclusively distributed by email.
The complimentary report helped advisors learn everything they need to know about marketing directed trust arrangements to their clients.
Scott Martin, Senior Editor, The Trust Advisor
Creative Icon Says Business Woefully Underpaid for Value Provided to Brands
In a nearly three-minute video rant recently posted on the 4A’s website, creative icon Lee Clow shares his thoughts on agency compensation and the value agencies provide by building brands. His comments were part of a series of recordings made last month for the trade group’s “Agency Thought Leader Compensation Summit.”
Sitting in an office at his agency, TBWA/Chiat/Day, Los Angeles, with client Absolut’s work in the background, Mr. Clow speaks bluntly about his view that agencies are not fairly compensated — and notes that it’s agencies’ own fault for allowing it to happen.
“For 40 years, I’ve believed that our business and what we do is to create things,” said Mr. Clow. “To have ideas, to tell brand stories in an artful way. But somehow every other media artist … whether they be photographers or filmmakers, directors, people that create TV shows, people who create music, people who perform music … all of those creative art forms have managed to figure out how to get paid for the value of what they create. Get paid, get residuals, allowed to own what creative idea they have delivered to the world. If it’s a bad idea, it will pay very little. But if it’s a great idea, it can pay for years and years and years.”
“Unfortunately, in our business, we get paid like we’re doing our clients’ laundry. We haven’t figured out that the ideas that we create can become a very powerful asset to the brands we work for. Many of the ideas — whether they be slogans or advertising forms and styles or a voice that we create for brands — could be listed on the balance sheet of our clients as an asset with millions and millions of dollars in value.”
“Somehow we’ve managed to commoditize what we do so that whatever agency gets hired for the lowest price they can negotiate with the purchasing agent gets paid the same as the — I’d like to say — better agencies. There are more talented and less talented companies in our business, but somehow that has no role in the compensation formula.”
“We’re supposed to be a creative business, but I think we have been probably the least creative industry in the history of the world in terms of figuring out how to get paid.”
Incidentally, the going rate for laundry service in New York City is 95 cents per pound for wash and fold, and a 8% gratuity is expected if you want it delivered.
Mr. Clow will speak at the 4A’s conference in Los Angeles next week, though not about the topic of client compensation. Alongside Ogilvy’s Steve Hayden, he’ll discuss his time working on the Apple account and creating the legendary 1984 TV spot.
Posted by staff for the The Trust Advisor
The Hunger Games hits theaters Friday morning at 12:01 am in sold out theaters around the United States. In my last article about Lions Gate Films (LGF), I discussed how the three Hunger Game books and the three or four movies it will spawn have the potential to transform the company. As the movie approaches theaters, it’s time to take a look at other potential beneficiaries from The Hunger Games.
In March, Hunger Games author Suzanne Collins became the bestselling author on the company’s Kindle platform. The three books in the series,The Hunger Games, Catching Fire, and Mockingjay continue to top the bestsellers list on Amazon. A quick look at the Amazon Top 100 Books shows:
1. The Hunger Games
2. The Hunger Games Trilogy Boxed Set
3. Catching Fire
14. The Hunger Games
22. The Hunger Games – Movie Tie-in Edition
45. Catching Fire
62. The Hunger Games Trilogy
Now some of the duplicates are because of paperback vs. hardcover editions but the fact of the matter is the book is selling. The book series has received prominent positioning on Amazon’s front page several times. Today, when looking at a search for The Hunger Games, I was surprised to see that all three books are available for a free download for Amazon Prime members. Amazon Prime is the premium yearly membership that provides free shipping and instant movie viewing to customers and now includes three bestsellers for free.
Share Price: $191.73
How to Trade: Amazon is trading almost half way between its 52 week high and low prices. I think shares represent a good buying opportunity as the company continues to enter new markets like home furnishings and sporting goods. Buy.
Barnes & Noble (BKS)
Barnes & Noble is the largest bookstore in the United States, so you would think that the bestselling book would have a big impact on shares. The fact is every year has a bestseller and it doesn’t really matter if the book is made into the movie. Barnes & Noble has fallen behind Amazon for the lead in sales of books. Its Nook e-reader also plays second fiddle to the Kindle made by Amazon.
Share Price: $14.20
How to Trade: As discussed, Barnes and Noble has been losing to Amazon for years and doesn’t appear to be overtaking its lead back anytime soon. I would stay away from shares. Sell.
The Hunger Games appears in several places on the company’s homepage and its clear to see that they are encouraging fans to pre-buy tickets for the highly anticipated movie. The clear winners from The Hunger Games could be the movie theaters that charge $8-$10 for a movie ticket to see the book presented on the big screen. Cinemark operates in 39 states in the United States and has 3,878 screens in the country. The company, which is number three by screen count in the United States, has a strong presence in Latin America. One hundred and fifty nine theaters, showing movies on 1,274 screens, operate in Latin America. The company should be more than happy to accommodate all the fans of the book into its theaters to kick off an early blockbuster before summer.
Share Price: $22.11
How to Trade: Cinemark hit a 52 week high Wednesday and is trading higher now on The Hunger Games. I think there is still an opportunity for some more gains as 2012 is a huge year for movies. Big blockbusters like The Hunger Games, The Dark Knight Rises, The Hobbit, and The Amazing Spider-Man will hit theaters this year. Buy.
Hot Topic (HOTT)
Unlike most of the companies on this list, Hot Topic operates with a market capitalization of under a billion dollars. With a market value of $500 million, Hot Topic could profit nicely from movie tied-in merchandise. A search for “Hunger Games” reveals 52 items related to The Hunger Games movie. Hot Topic has done well with movie merchandise and is a popular destination for teenagers to shop at. I think Hot Topic could increase earnings for this quarter based on the movie and merchandise related to it.
Share Price: $10.14
How to Trade: Shares of Hot Topic, which also pay a 3% dividend, are close to a 52 week high. The Hunger Games could have a dramatic impact on earnings for the current quarter, which analyst are expecting to be $0.05. Buy
Imax Corporation (IMAX)
On February 2nd, it was announced that The Hunger Games would be opening for a limited one week engagement on Imax screens. As an Imax shareholder, it is kind of a shame that the company had a prior commitment to Wrath of the Titans, the sequel to Clash of the Titans. On March 30th, Wrath of the Titans will take over Imax screens. I’m sure that seeing Perseus travel to the Underworld to save his father Zeus will look great with special effects on the big screen, but I can’t help but wonder how much money The Hunger Games could have made on Imax screens with a longer run. The limited run does help to ensure that most shows will be sold out as demand for this movie is growing each week. I discussed Imax adding both The Hunger Games and The Avengers in larger lengths in this article.
Share Price: $26.30
How to Trade: Imax is firing on all cylinders with a huge 2012 lineup of movies. The company is also signing multiple international theater expansion deals including a recent one for its first theater in Pakistan. Imax was one of my top ten stocks for 2012 and is a stock I own in real life and I think it will have a successful year and is headed to a new 52 week high soon. Buy.
Netflix has had some troubles this past year with rising streaming costs. The company appears to have made a smart acquisition of content when its U.K. streaming division made a deal with Lions Gate to stream movies within a year of their theatrical release. The Hunger Games will be streamed to Netflix U.K. customers after the movie is out of theaters. Netflix is in 43 countries now and competes with Amazon Lovefilm unit in the country. This deal and the success of the movie could help Netflix overseas.
Share Price: $120.10
How to Trade: Netflix shares trade with wild swings in price and I don’t think The Hunger Games can save the company from its streaming costs. The company’s plan on having original shows seems to be working as it now is up to five shows. As television channels dump shows and they decide to shop themselves, Netflix could be a big winner. Hold.
Regal Entertainment (RGC)
Regal is the largest movie theater company in the United States with 6,598 screens. The company has a large presence in many big population cities and has an average of 12 screens per theater, which ranks it higher than most of its peers.
Share Price: $14.07
How to Trade: Regal trades close to its 52 week high, likely from the success of The Hunger Games built in. The company also pays a 6% dividend, which is higher than the 3.8% offered from Cinemark. Just like Cinemark, Regal is in for a great 2012 lineup and should have great earnings to report. Buy.
Scholastic hit a nine year high in its share price last week. The gain was due in large part to The Hunger Games. The trilogy of books is published by Scholastic and has been released in 26 different languages. The series of books has been released in 38 countries. The books are popular with females and males of a wide range of ages, which bodes well for the company. The company also publishes the Harry Potter series, which has strongly declined in sales.
Share Price: $37.35
How to Trade: Shares of Scholastic are up 25% since the beginning of the year. I think Scholastic shares have become fairly priced and will likely only see a slight bump in price. Hold.
The Hunger Games is set to make between $70-$100 million this opening week and estimates place it in the $250-$350 million range for domestic box office. At least two more movies and possibly three are being made to close out the book series. Any of these companies could also be impacted next year when the sequel Catching Fire is released.
Posted by Steven Maimes, The Trust Advisor.
Automating administration of your Crummey trusts
CrummeyService is a web-based solution to the administrative problems of Crummey trusts. It automatically sends gift and premium payment reminders, creates Crummey notices informing beneficiaries of their withdrawal rights. It sends the notices to beneficiaries; records acknowledgement of the notices and sends copies to trustees, grantors, fiduciaries and advisors to the trust. It relieves the attorney and trustee of tedious hard copy storage and administration. The publisher’s website includes a presentation on the nature of this service and screenshots of sample notices and reports.
CrummeyService accumulates, manages, tracks and monitors key trust information for grantors of trust owned life insurance. It records transactions, creates notices and alerts for funding shortfalls at defined intervals from the premium due date, supplies unpaid premium alerts and sends hard copy and electronic letters as required. The publisher asserts that all information and transactions are tracked and monitored in a secure environment. Trustees are notified when to pay the policy premium with payment date, method, amount and all other relevant payment details stored in the system.
CrummeyService will manage the entire irrevocable life insurance trust lifecycle. It supports compliance with Internal Revenue Service and Uniform Prudent Investor Act regulations and guidelines and produces year-end and on-demand reports for tax filing and estate settlement. Administration of a trust may be authorized by CrummeyService, the trustee or an advisor. Notice text, data visibility and administrative rights can be controlled at the regional, office or attorney/advisors level.
This service may also be branded with your logo or, as a default, your contact information can appear on all communications to trust parties during the trust lifetime. The publisher offers extensive support for a corporate implementation.
Trust data is retained forever. Access to data is determined by authorization level based on the party’s role in the administration of the trust, with only authorized parties able to access trust data. Trustees have full data access, but beneficiaries will be given only limited access to data. Data access is available from any web browser 24/7.
What’s It All About?
After gathering the information needed to set up a trust (insurance policies, trust documents, the contact information for all parties to the trust, etc.), you enter the data required to set up the trust initially. Unless this information changes, this will be the only time you will need to enter it.
Upon entry to the secured area of CrummeyService, at the Welcome screen you are presented with the Main Dashboard that features a navigation menu on a left hand pane, a larger right hand pane and at the top, navigational buttons, a list of accounts and a Help menu. The right hand pane offers quick access to Add a New Trust, Complete Trust Entry, Record a Gift, Record a Policy Payment and My information. You can enter your personal information and settings at the My Information screen, which is then used throughout the system.
You may select Add a Trust on the right hand pane or choose from the activities listed on the navigational pane. A description of activities is available for each selection on the right hand pane. At the screen for Add A New Trust (or the screen for maintaining trust data), there is a tab for every party to the trust: grantor, trustee, guardian, beneficiary, policies, insured, advisor, and fiduciary. This information needs to be entered only once and is then used throughout the system. Access may be granted as desired. Fiduciaries may manage and edit information, if given permission. As all the necessary information for each tab is completely entered, a dot on the tab for the screen you are working on changes from red to green.
Saved data for each party includes tabs for personal and contact details, home address, business information and phone numbers.
A screen addresses Summary, Gift to Trust, Policy Payment and Gift Acknowledgment, displaying a list of previous gifts.
After the trust data for a new trust is entered and the dots on the tabs at New Trust are all green, the trust may be activated by clicking on the button “Activate this trust.” The trust is then ready to begin use of the website’s services. A welcome notice to the interested parties will be generated when the trust is activated.
Each year you will enter the gift(s) to the trust and information as to the payment of the life insurance premium.
Click on Financial on the left hand menu to open the Financial tab, which allows you to view and edit Gift to Trust, Policy Payment and Gift Acknowledgement for the policy you select, as well as displaying a summary of the trust activities for all policies.
You can then select Notice from the left hand menu to display a list of all trust activities (gift, policy payment, funding acknowledgement, etc.), as well as the welcome letter and the Crummey letter. Double click on the letter description to view the letter, select recipients, details for the delivery of the notice and the contents of the letter. The withdrawal notice defaults to 30 days, but may be changed. The Crummey notice language may be set to the default or you may tailor it as you see fit. The notices are customizable.
The Trust Attachments page allows you to upload the trust document file, or other documents associated with the trust, for storage and review.
You can create a Trust Report or Gift Report in a variety of formats, as desired. Selecting History allows you to view all activities of a given trust.
The Maintain Users tab allows you to enter the basic contact information for all users of a given trust and set the group and access settings for each user.
CrummeyService reminds the grantor (or employer, as applicable) when a gift to the trust is needed to ensure there are sufficient funds for the premium payment, and will automatically send the grantor, trustee and fiduciary a new gift reminder notice the following number of days prior to the premium due date: 60,30, 15, 0 (on the due date), and -15 (fifteen days into the grace period). A policy review reminder can be automatically generated on a user-defined schedule for each policy held by a trust and delivered to any of the trust parties. As with all notices, the text can be tailored, or default language can be used.
What About Help and Support?
At the Main Dashboard, and other screens, the Help menu offers a Hints screen that details the methods of data entry for all screens and a glossary. Each page includes context related help with instructions as to its operation. The site includes a facility to send the publisher your comments, corrections or suggestions.
How Do You Contact the Publisher?
CrummeyService is published by CrummeyService.com, LLC. The Standard version is priced at $399 per year, with a one-time setup fee of $200. Branding is separately priced. Volume price discounts for advisors, re-sellers and enterprise customers are offered.
CrummeyService allows you to eliminate the burdensome paperwork and administrative bother of servicing Crummey trusts and provides a convenient electronic means of efficiently addressing this area of your practice.
Kelley Rating (one asterisk = lowest, to five asterisks = highest):
- Ease of navigation, design of interface and learning curve *****
- Instructional documentation and help system ***
- Carries out the goal of the product as advertised *****
- Overall usefulness ****
- BY DONALD H. KELLEY
Donald H. Kelley—a respected connoisseur of the software and Internet resources wealth management advisors use to further their practices. He is a lawyer living in Highlands Ranch, Colo. and is of counsel to the law firm of Kelley, Scritsmier & Byrne, P.C. of North Platte, Neb. He is the co-author of the Intuitive Estate Planner Software, (Thomson – West 2004)..
Posted by The Trust Advisor.
More passengers are downloading books, sending Tweets and updating their Facebook pages in the middle of a flight—even as they complain about steep prices.
Currently, about 1,700 planes in the U.S. have Internet access, including the entire fleets of Virgin America and AirTran, Delta Air Lines’ entire domestic fleet, and a sizable number of planes flown by American and Southwest Airlines.
Airlines say Wi-Fi usage-the percentage of passengers paying for Internet access—is picking up, driven partly by the popularity of tablet computers and partly because more planes have the service. Currently about 8% of passengers use the service, up from 4% at the end of 2010, according to In-Stat, a research and consulting firm. That likely will reach 10% of passengers by the end of this year, In-Stat says.
Virgin America, which has both wireless hot spots and standard power plugs on all its 50 planes, says some cross-country “nerd bird” flights between tech strongholds like San Francisco and Boston have averaged 26% of passengers paying for airborne Wi-Fi service, even on redeye flights. Overall, the airline is hitting about a 16% usage rate. Airlines say popular activities include book downloads, Facebook updates and real-time flight-tracking.
“People are beginning to expect you to have Wi-Fi everywhere. It’s just whether they are willing to pay for it,” said In-Stat senior analyst Amy Cravens.
In-Stat research shows that people place the value for in-flight Wi-Fi at about $2 to $5 per session, rather than the typical $10 and up. “Value perceptions are not aligned with current pricing,” Ms. Cravens said.
Virgin America first started offering Wi-Fi in 2008. Now, all 50 planes are equipped with Internet service.
Gogo Inc., which provides service for Delta, American, Alaska, Virgin America and others, sets its prices, currently ranging from $4.95 for a flight up to 90 minutes long to $39.95 for a monthly unlimited pass. Many people end up paying $9.95 for a flight up to three hours or the $12.95 price for either a 24-hour pass or a flight longer than three hours.
“I think it’s overpriced. I do use it, but only if I have to do something. It’s more of a convenience than a need,” said Russell Overla, a Tulsa, Okla., transportation company executive.
Southwest Airlines, which gets its service from Row 44 Inc., has stuck with its introductory rate of $5 per flight. Southwest’s agreement with Row 44 gives it control over pricing.
Usage “is growing without any significant marketing support. Because we don’t have the bulk of the fleet equipped, we’ve not been able to turn on the marketing muscle,” said Dave Ridley, Southwest’s chief marketing officer.
Southwest plans to offer targeted discounts to Wi-Fi users, generating both advertising revenue for the airline and giving customers more incentive to pay to log on. Since the airline knows where people are going, it has a captive audience of potential spenders who can be targets for restaurants, stores and amusements.
In Europe, Germany’s Lufthansa, which had been a customer of an ill-fated Boeing Co. Wi-Fi effort, began bringing Internet service back in late 2010 with a satellite-based service developed by Panasonic . It isn’t cheap: One hour costs about $14.50, and a 24-hour pass costs about $26.
Airlines have been split on whether to go with a ground-based system or with satellite-based systems. The ground-based system offered by Gogo, which connects a Wi-Fi hot spot installed in a jet to one of 135 antennas Gogo has on the ground in North America, has been running on commercial aircraft since 2008. Satellite-based systems, such as service offered by Row 44, offer faster speeds, more bandwidth and global coverage over oceans, but aren’t as developed yet.
United Airlines said its installation of satellite-based equipment will begin in the second half of this year, with all planes equipped by the end of 2015. JetBlue Airways said it hopes to begin installation of a satellite system, which hasn’t yet received Federal Aviation Administration approval, late this year.
Gogo says it plans to transition to satellite-based technology and provide international coverage beyond North America. Gogo’s current system provides hotel-like speeds—enough to get most jobs done.
On a recent US Airways flight, my computer was slower than it is at home and dawdled a bit as I searched Stubhub for tickets to baseball’s spring training. A passenger nearby watched a Netflix movie with only occasional buffering.
That kind of passenger usage prompted US Airways to join the Wi-Fi expansion trend on Wednesday. The airline will add Wi-Fi to Airbus A319 and A320 planes as well as Embraer 190 jets and some smaller regional jets. With the A321 planes already fitted with Gogo service, US Airways says 90% of its domestic mainline fleet will be covered by the end of next year.
The increased usage has revealed some curious trends. For example, Virgin America customers have taken to contacting the airline in-flight through social media. Instead of asking flight attendants, some passengers send questions through Twitter about food for sale on board or the location of power outlets; others zap questions to the airline’s office about flight delays or missed connections. In extreme cases, Virgin America has alerted crews in-flight to passenger problems through operations messages sent to pilots.
Trevor Adey, a tech company vice president based near Dallas, flies Virgin America frequently, in part because of the Wi-Fi service, which he uses mostly for work plus some entertainment. “Time goes by slowly if there’s nothing to do,” Mr. Adey said.
Because of travelers like Mr. Adey, Gogo’s average revenue per passenger on Gogo-equipped flights jumped 58% to 41 cents in the nine months ended in September 2011 from 26 cents a year earlier.
In addition to its domestic fleet, Delta has equipped most of its regional jets with first-class cabins, since those planes are used on longer routes. Delta sees Wi-Fi as an amenity to attract more high-fare business travelers to its flights.
The most popular site visited on Delta flights: Facebook.
Delta won’t disclose the percentage of passengers who buy the service on Wi-Fi equipped flights, but in January, purchases were 41% higher than in January 2011, and 168% higher than in January 2010. The take rate is four times as high on flights longer than 1,500 miles than on shorter flights, said Bob Kupbens, Delta’s vice president for marketing and digital commerce.
“We’re seeing very, very rapid growth,” he said, adding that Delta is comfortable with the pricing set by Gogo, which has filed a registration statement for a public stock offering and declined to comment.
Delta offers some Internet access for free, such as shopping on Amazon.com to passengers (one-third of all Amazon purchases aboard Delta flights are electronic book downloads). The most popular tab on the free portal: a flight-tracker that shows the flight’s progress, speed, altitude and estimated arrival time. Twenty percent of people who use the free portal use the flight tracker, Mr. Kupbens said.
Here’s a look at Wi-Fi availability on U.S. airlines:
|PERCENT OF FLEET||NOTES|
|Virgin America||50||100%||Also has standard power outlets|
|Alaska||110||92||All except freighters and combination passenger/freight planes|
|Delta||557||79||100% of mainline domestic fleet; also equipped 37% of its regional jet fleet|
|American||321||53||Up to 400 aircraft installed by the end of this year|
|Southwest||340||49||Includes AirTran, which has 100% coverage on its 140 planes|
|US Airways||63||19||Airbus A321 planes only; plans to expand to Airbus A319 and A320, as well as Embraer 190 jets and some smaller regional jets by the end of next year.|
|United||13||2||Available only on p.s. aircraft; going to satellite-based system to provide global coverage.|
|JetBlue||0||0||Plan to begin installing satellite-based system late this year|
Source: online WSJ
Posted by Steven Maimes, The Trust Advisor.
Last week, while my post about hidden assets was racking up thousands of readers, news broke that a Russian billionaire allegedly bought an $88 million apartment as a ploy to scam his wife during their divorce.
To me, these related –albeit completely independent –events are evidence of two key points: 1) The topic of husbands hiding assets hits a nerve with many women, and 2) Husbands hide assets (or at least, try to hide assets) much more frequently than most wives expect.
So, let’s keep this conversation going.
Today, I’d like to dig a little deeper into the topic of hidden assets, and to do so, I’ve enlisted the help of my colleague, Miles Mason, Sr., JD, CPA, founder of Miles Mason Family Law Group, PLC, in Memphis, Tennessee, and author of The Forensic Accounting Deskbook: A Practical Guide to Financial Investigation and Analysis for Family Lawyers, published by the American Bar Association.
As Miles points out, it’s important to shine a spotlight on the topic of hiding assets because divorcing women are often too shy or intimidated to report their husbands’ dirty tricks. Why? Because divorce victims mirror fraud victims.
“Fraud victims are often too embarrassed to report the crime,” Miles explains. ”Spouses married to persons lying, cheating and stealing in the divorce become demoralized. The spouse counts on the victim’s will breaking down. Victims blame themselves and want to settle for less than a reasonable settlement.”
If you’re divorcing, please don’t let that happen to you. Educate yourself and lean on the expertise of a qualified divorce team to help you get the settlement you deserve. To help you wrap your arms around this complicated topic, here are a few of “the basics” Miles teaches his clients:
Red flags seem obvious, once you know what to look for. You may have good reason to be suspicious if your husband:
• Maintains complete control of bank account information and online passwords.
• Is secretive about financial affairs.
• Owns a P.O. box or private mail drop box, which receives account statements and bills.
• Has meaningful unreimbursed business account expenses.
• Deletes one or more personal financial programs, Quicken or Quickbooks.
• Says the computer containing important financial records has mysteriously “crashed.” Then, he removes the hard drive for a data retrieval attempt, and it’s never to be seen again.
• Acts pushy when obtaining signatures on important documents, like tax returns and deeds. “I need to get this to our accountant today,” he insists.
• Proposes an execution of mutual durable power of attorneys for “estate planning” purposes.
• Enjoys out-of-town business junkets with his befriended, slippery financial advisor.
• Develops SIDS (Sudden Income Deficit Syndrome). “My business is failing” suddenly crops up.
• Suffers an income decrease without a corresponding reduction of expenses.
• Binges on unusual purchases of flashy items, such as a car and jewelry.
• Reports a dramatic decrease in value of marital and/or business investments.
• Owns multiple cell phones or numbers over a relatively short period of time.
• Makes frequent trips to countries with relaxed banking laws.
• Exhibits childish greed and claims of entitlement.
• Makes unusual purchases of toys or art that could be sold later.
• Starts drawing on large amounts of debt.
• Is involved in drug abuse.
• Gambles more frequently than usual and is placing money “on account” with casinos.
• Opens multiple business or personal bank accounts without obvious reasons for having that many.
A husband who hides assets usually has very specific, predictable objectives. In general terms, his goals are to:
1. Hide, understate, or undervalue certain assets,
2. Overstate debts,
3. Report lower than actual revenue, and/or
4. Report higher than actual expenses.
Most tactics are predictable, too. Here are a few of the most predictable strategies Miles has seen, along with the advantages and disadvantages for each:
• Hoarding unrecorded cash. Advantage: Removing cash (currency) lacks a paper trail, and offshore bank accounts are relatively easy (from a legal standpoint) to open. Disadvantage: Laundering over $100,000 in currency can be time consuming and will likely require travel. Depending on the circumstances, this tactic could involve the very serious criminal acts of money laundering, violation of cash transfer reporting requirements, federal income tax fraud and perjury.
• Secreting already recorded cash receipts. Advantage: This can be completed as part of a complex accounting scheme, which may be too complicated or expensive to discover. Disadvantage: Once cash is recorded, its absence or transfer is discoverable.
• Understating revenue. Advantage: The business owner has lots of options from which to choose. Some are simple and easy. Deferring revenue by manipulating the timing of revenue or accounts receivable may not constitute tax fraud. Disadvantage: Depending on the business owner’s sophistication, this can require a fairly predictable co-conspirator. If the co-conspirator is placed under oath, the scheme could result in perjury charges for the husband.
Scams to hide money often involve handing cash or transferring ownership of valuable assets to buddies, siblings, or parents to hold until sometime after the divorce is final. These schemes usually include deceptive cover stories, financial statement manipulation and lying under oath. Sometimes the stories even become more intricate, involving failing businesses, gambling addictions and other personal failures.
“The more believable the story is that the money is gone, the more likely the victim will give up looking for it,” Miles says.
Let’s consider an example. Pretend your husband’s business owns a vacant building. Your husband may complain that the property taxes are long overdue and the building is worth less than the cost of paying them. Then, prior to the divorce filing, he brags that the business sold the building to a stupid investor who is now “stuck” with having to pay the overdue taxes. At first this may sound like a great deal: the business is rid of the purported albatross, and the business and marital estate is purportedly saved thousands of dollars. But, the reality is quite different. The taxes were never behind, and the purchaser was your husband’s nefarious financial advisor and personal friend. The transfer was recorded, but the handshake deal will result in your husband and his friend splitting the profits from its sale a year or so after the divorce.
As I pointed out last week, timing is critical to detect schemes using financial statement manipulation, and benchmarks are key. Ideally, a woman must be financially aware and involved from the onset of her marriage. Consistent participation from the start is critically important because: 1) If your husband has been hiding income/assets over years or decades, it will become virtually impossible to trace/find them, and 2) Being financially aware and involved helps form the foundation of happy marriages where a divorce is not even a possibility. (If your husband becomes incapacitated or dies, a working knowledge of your assets/liabilities and income/expenses and where all your accounts and important documents are located will be vitally important.)
Remember, your husband doesn’t have to be a billionaire to be guilty of hiding assets. Dirty tricks happen more often than women expect, and you’ll need to Think Financially, Not Emotionally so you can keep your finances intact during the divorce proceedings while you plan for a secure financial future post-divorce, as well.
- Jeffrey A. Landers, is a Divorce Financial Strategist and the founder of Bedrock Divorce Advisors, LLC (http://www.BedrockDivorce.com )
The opinions expressed are solely those of the author, who is not an attorney.
Posted by Steven Maimes, The Trust Advisor.