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Jan 8, 2006 11:08 pm

This board has been hi-jacked by pro and anti-Jones freaks, so I'm going to try and list a few ways you can grow your business in different situations.


1. Net Unrealized Appreciation (NUA) in 401k's with company stock


2. 90-24 exchanges from 403b to 403b


3. change of agent on annuities you run across


4. most 401k's don't allow rollovers to IRA's when the person dies, this means the spouse must take a lump sum or distribute over 5 years...a huge tax hit. You need to rollover and use the stretch IRA option.


5. death benefit bonds for married couples late in their years. Even with one passing, you can redeem the bonds at par.


     There's a few ideas.....add other ideas if you have them.

Jan 9, 2006 1:24 pm

Thanks for the positive momentum here.  What is the NUA deal?

Jan 9, 2006 3:37 pm

Talk your 401-k specialist but basically it is the ability to hold company stock from a retirement plan without having to pay taxes until it is sold.


Another idea for this thread...look into your client's 401-k's and see if they permit in service distributions.  Then roll them over and offer your client's more cjoice and better performance.

Jan 9, 2006 4:22 pm

I know a guy who did what your talking about Finclpingpro.  He found a company that allows in service distributions and brought in a large amount of assets.  Over 7 million in 18 months.   Unless you have an in at the company though this is harder to do than it might first seem.  I have tried unsucessfully to do this.


As far as not being able to roll over a deceased spouses 401k to an IRA, I do not think that is correct.  Unless the plan specifically states but 9 out of 10 times you can roll it over.  Someone correct me if I'm wrong.

Jan 9, 2006 6:28 pm

Great topic youcanhatemenow. I was hoping to find more of this when I joined. Every other post is Jones this Jones that. Don't know why--I'm sure its been asked many times before--I'll just accept it as is.



Anyway, NUA=Net Unrealized Appreciation. Get a CPA to sign off on it. Good way to make a contact.



Another idea that I'm going to try this year;



I have a CPA do my taxes. This year he'll do it but I'm going pay to have another CPA do my taxes in addition to the orginial guy. Maybe get my taxes done by three different CPAs. Another contact to strike up a conversation.



I'll let them figure out how to deduct their fees.

Jan 9, 2006 6:50 pm

How about a 72T distribution under "substantially equal payments"?

Jan 9, 2006 8:58 pm

Malcolm - You're correct IRD (Income with Respect to Decedent) only occurs on a 401k if the beneficiary is someone other than the spouse.  Husband to wife, and wife to husband transfers don't create the IRD taxes.


As far as the NUA goes I'm not sure if  you understand it youcanhatemenow, but its essentially a way that clients who own company stock in their 401k's can pay capital gains tax on the shares when they sell them versus being taxed as income.  Show a client with a highly concentrated position how to do this an they'll tell all their friends about you.  It's the difference between being a true advisor and a transaction hack.


The 403(b) stuff is great...You can almost always move them...Just watch out for surrenders.


Lastly, I wasn't aware of the change of agent on annuities...Can anyone explain?

Jan 9, 2006 9:21 pm
bluehorseshoe:

Malcolm - You're correct IRD (Income with Respect to Decedent) only occurs on a 401k if the beneficiary is someone other than the spouse.  Husband to wife, and wife to husband transfers don't create the IRD taxes.


As far as the NUA goes I'm not sure if  you understand it youcanhatemenow, but its essentially a way that clients who own company stock in their 401k's can pay capital gains tax on the shares when they sell them versus being taxed as income.  Show a client with a highly concentrated position how to do this an they'll tell all their friends about you.  It's the difference between being a true advisor and a transaction hack.


The 403(b) stuff is great...You can almost always move them...Just watch out for surrenders.


Lastly, I wasn't aware of the change of agent on annuities...Can anyone explain?



Get the client to sign an agent change request form. Then you and your b/d will be the agent/broker of record. Now you can be liable for something that you never even got paid for! Pretty neat, ain't it?

Jan 9, 2006 10:42 pm

step one- get the assets over.


step two- figure out the structure, fees, charges, etc, etc, etc... Then figure out what course of action to take..


step one- get the assets over......

Jan 9, 2006 11:49 pm
Dirk Diggler:

Get the client to sign an agent change request form. Then you and your b/d will be the agent/broker of record. Now you can be liable for something that you never even got paid for! Pretty neat, ain't it?


You're not going to be liable for a sale you didn't make...and what about trails?  If you're concerned about product suitability, document your case and make a switch...

Jan 10, 2006 7:29 am
Indyone:
Dirk Diggler:

Get the client to sign an agent
change request form. Then you and your b/d will be the agent/broker of
record. Now you can be liable for something that you never even got
paid for! Pretty neat, ain't it?


You're not going to be liable for a sale you didn't make...and what
about trails?  If you're concerned about product suitability,
document your case and make a switch...





Uhhhh I don't think so.  You take on a client you must profile
them and make sure the assets you cover in your planning, especially
the ones you are manageing (transferred in or not), are in line with
the profile you completed.  I can imaging that Arb Board:



"I profiled mrs. Jones as a conservative investor, and transferred in
these 5 aggressive growth mutual funds that another broker sold
her.  I sold her all conservative investments with the cash she
brought me, but left the aggressive growth funds in tact.  I
reviewed her account 9 times during the tenure of our
relationship...very high level of contact and service.  Since I
did not sell her those 5 mutual funds, I am not responsible for them,
although I am enjoying the comp from the trail.  I feel bad the
stock market went down so far, and that those funds lost so much in
value, but it is not my responsibility...go get the broker who sold
them to her intiially."



I belive thsi rep would loose.

Jan 10, 2006 11:27 am
bluehorseshoe:

Malcolm - You're correct IRD (Income with Respect to Decedent) only occurs on a 401k if the beneficiary is someone other than the spouse.  Husband to wife, and wife to husband transfers don't create the IRD taxes.


As far as the NUA goes I'm not sure if  you understand it youcanhatemenow, but its essentially a way that clients who own company stock in their 401k's can pay capital gains tax on the shares when they sell them versus being taxed as income.  Show a client with a highly concentrated position how to do this an they'll tell all their friends about you.  It's the difference between being a true advisor and a transaction hack.


The 403(b) stuff is great...You can almost always move them...Just watch out for surrenders.


Lastly, I wasn't aware of the change of agent on annuities...Can anyone explain?




I've recently been looking into NUA and what it allows a client to do is to take a distribution of company stock(the company that the client works for or worked for and sponsored the plan) and put it in a regular account.  They then will pay ordinary income tax on the cost basis of the stock(10% may apply) but when the stock is sold they will only pay capital gains tax on the gain.


Did I miss anything?

Jan 10, 2006 11:37 am
Indyone:
Dirk Diggler:

Get the client to sign an agent change request form. Then you and your b/d will be the agent/broker of record. Now you can be liable for something that you never even got paid for! Pretty neat, ain't it?


You're not going to be liable for a sale you didn't make...and what about trails?  If you're concerned about product suitability, document your case and make a switch...



IndyNone, I refuse to call you a retard.

Jan 10, 2006 11:44 am

The company stock is deposited into a taxable account, where taxes would apply. The remainder of the 401K MUST be rolled into an IRA to maintain the tax deferral. NUA is a hedging strategy for people with highly concentrated company stock positions.


For those who are looking for strategies to get the attention of CPA's, its amazing how many are unaware of this strategy.

Jan 10, 2006 12:36 pm
rightway:
Indyone:
Dirk Diggler:

Get the client to sign an agent change request form. Then you and your b/d will be the agent/broker of record. Now you can be liable for something that you never even got paid for! Pretty neat, ain't it?


You're not going to be liable for a sale you didn't make...and what about trails?  If you're concerned about product suitability, document your case and make a switch...




Uhhhh I don't think so.  You take on a client you must profile them and make sure the assets you cover in your planning, especially the ones you are manageing (transferred in or not), are in line with the profile you completed.  I can imaging that Arb Board:

"I profiled mrs. Jones as a conservative investor, and transferred in these 5 aggressive growth mutual funds that another broker sold her.  I sold her all conservative investments with the cash she brought me, but left the aggressive growth funds in tact.  I reviewed her account 9 times during the tenure of our relationship...very high level of contact and service.  Since I did not sell her those 5 mutual funds, I am not responsible for them, although I am enjoying the comp from the trail.  I feel bad the stock market went down so far, and that those funds lost so much in value, but it is not my responsibility...go get the broker who sold them to her intiially."

I belive thsi rep would loose.


RW, you took me totally out of context.  I said, "If you're concerned about product suitability, document your case and make a switch...".  Thus, if I saw 5 unsuitable investments, thes I would document my case and make the switch.  If they are suitable investments and I maintain them, please tell me where the problem lies?  My career arbitration losses are zero.

Jan 10, 2006 12:38 pm
Dirk Diggler:
Indyone:
Dirk Diggler:

Get the client to sign an agent change request form. Then you and your b/d will be the agent/broker of record. Now you can be liable for something that you never even got paid for! Pretty neat, ain't it?


You're not going to be liable for a sale you didn't make...and what about trails?  If you're concerned about product suitability, document your case and make a switch...



IndyNone, I refuse to call you a retard.



That's good, because if you do, you'd best take a look in the mirror.

Jan 12, 2006 12:57 am

I'm liking where this thread is going.  Here's a couple other ways to add value for clients.


    TOD: get those assets distributed quickly after death.


    Bond Swap when rates go up.


    New rules allowing the Stretch of Non-qualified annuity money to heirs



     Let's keep the good ideas rolling.