Michigan 6% Tax on Financial Planning!
God works in mysterious ways. Be careful what you wish for when you go after your fellow investment advisors and brokers and force the industry to try and marginalize your colleagues with disclosures that challenge the integrity of their financial plannning advice without a CFP.
Now I can ask my clients Are you being taxed to death by the cost of your CFP's expensive leather bound financial plan. AaaaHAHAHAHAHAHAHAH Kiss my ARSE!!!!
Michigan slaps 6% tax on investment advice
Characterization of planning as non-essential service infuriates advisers
By Jeff Benjamin
October 8, 2007
Financial planners in Michigan were blindsided last week when the state's Legislature emerged from a late-night budget session with a new 6% tax on investment advice.
Both the Financial Planning Association of Denver and the National Association of Personal Financial Advisors in Arlington Heights, Ill., have already hinted that they would support efforts to overturn the tax, which doesn't apply to brokerage commissions.
If you read the actual law, which most people have yet to do, you’ll find that it only applies to individuals/practices that have NO authority to execute trades on behalf of their clients.
This means, if you have the ability to execute a trade, either through discretion or otherwise, you are exempt from the tax.
This tax, from what I’ve been told and I’ve read, is applied to the fellow who is doing financial planning and that’s it. He is not working with a custodian, and only advises people without having ANY ability to actually execute the plan they have suggested.
The tax applies to only one of the two types of NAICS classification codes. The one, which planners and advisers falls under, is exempt since most of us have the authority to act or execute trades for our clients.
This truly is a tax on the small-fry financial planners who operate out of their basement and make money in their robe and bunny slippers.