Protecting Clients from Fraud, Incompetence and Scams E-Book

Lance Wallach

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 285

Veröffentlichungsjahr: 2010

Beschreibung

Protect your clients - and yourself - from all kinds of financial chicanery and stupidity with this vital new book It doesn't matter if a financial error was made because of malice or ignorance - the end result is that you lose money. Luckily, you don't have to sit idly and take it. If you have Protecting Clients from Fraud, Incompetence and Scams, you can identify and avoid the dysfunctional sectors of the financial industry, steer clear of the fallout from the Madoff Era, and guide your clients to real, healthy, sustainable returns. This powerful book * Pinpoints dysfunctional sectors within the financial industry and offers advice against frauds and scammers * Shows how a team approach to asset management can ward off financial predators * Offers practical strategies and tools to combat client risk for Risk and Asset Management Offering insightful information to protect your clients from all sorts of frauds and incompetence, this essential guide equips you with tips and techniques to spot the red flags of fraud and prevent it before it starts.

Leseprobe

Table of Contents

Title Page

Copyright Page

Acknowledgements

Introduction

CHAPTER 1 - Meltdown

The Party’s Over

We All Know the Result

Grim Statistics

Retirement Plans and the IRS

Summary

CHAPTER 2 - Everyone Needs a Family Office

Why a Family Office?

Retaining a Firm

The Family Office Advantage

Summary

CHAPTER 3 - Protect Your (Retirement) Assets

The Fiduciary Duty

Documenting a Process

Plan Options/Simple IRA

You Cannot Save Enough

Another Option—The 412(e)(3)

The Cash-Balance Plan

Summary

CHAPTER 4 - How Much Did You Lose Last Year?

Basic Financial Strategies Quiz

Estate and Financial Planning

Life Insurance

Succession Planning

The Buy-Sell

Medical Insurance

Asset Protection

VEBA

Other Post-Employment Benefits

OPEB Cost

VEBA Plan Benefits

Taxes

Retirement

Legislative Changes

HSA/HRA

412(e)

Audits

Shelters

6707A

Captives

Summary

CHAPTER 5 - Self-Defense

Captive Insurance

Basics

Sharing

Caveats

Summary

CHAPTER 6 - Asset Protection Basics

Asset Protection—Necessity, Not Luxury

Who Needs Asset Protection?

Separating Ownership from Control

What Is an Asset Protection Plan?

What Is a Trust?

How Does a Trust Work?

How Is a Trust Used?

Offshore Trusts

Asset Protection FAQs

Summary

CHAPTER 7 - Shifting the Risk Equation—Insurance Maneuvers

Key Employee Insurance

LTCi for the Business Owner

Life Insurance for Business Continuation

Summary

CHAPTER 8 - Reevaluating Existing Insurance

Evaluation or Audit

Consultative Leverage

Summary

CHAPTER 9 - What Financial Advisors “Forget” to Tell Their Clients

Fiduciary Duty

Summary

Notes

CHAPTER 10 - The Truth About Variable Annuities

Variable Annuity Components

Mortality and Expense Charges

Guarantees

Summary

CHAPTER 11 - What Life Insurance Agents “ Forget” to Tell Their Clients

Questionable Aspirations

Coverage Needs

Estate Taxes

The ILIT

Summary

CHAPTER 12 - What You Must Know About Life Settlements

Life Settlements

Industry Regulation and Compliance

Licensing and Reporting

Compensation

Compensation Abuse

Suitability

Best Execution and Due Diligence

Fraud Prevention

STOLI

Evaluation and Processing

Tax Treatment

Case Studies

Caveat Venditor

Summary

Notes

CHAPTER 13 - What Health Insurance Agents “ Forget” to Tell Their Clients

Out of Control Costs

Small Business at Risk

The Risk of On-Site Medical Clinics

Using an HSA for your Personal Retirement

Creating an Employee Retirement Vehicle

IRS Form 8889 (HSA)

More Effective Strategy

Aggregate Cap Planning

HRA

Managing General Underwriter

Summary

CHAPTER 14 - College Funding Strategies and Solutions

The Traditional Approach

Good Intentions, Disastrous Consequences

Traditional Vehicles

Real Life

Summary

CHAPTER 15 - Two Alternative Investments for Financial Independence

The Tertiary Market

History

Risk

Reward

Another Alternative

O&G Advantages

Summary

CHAPTER 16 - Avoiding Fraud: Small Business Case Study

Introduction

Suspicion

Investigation

Fraud

Dismissal and Prosecution

New Mechanisms

Summary

Appendix A - Best of the Best

Epilogue

About the Author

About the Contributors

Index

Copyright © 2010 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Wallach, Lance.

Protecting clients from fraud, incompetence, and scams / Lance Wallach. p. cm.

Includes index.

eISBN : 978-0-470-59392-9

1. Fraud-Prevention. I. Title.

HV6691.W35 2010 362.88-dc22

2009037068

Acknowledgments

I wish to express my sincere thanks to everyone who contributed to the creation of this book. An “instructional” tome of this nature, by design, relies, from the moment of inception to the last run off the presses, on the advice and input of highly qualified experts. Although many have contributed their expertise in various forms and fashions, I would be remiss if I did not single out and acknowledge the contributions of some people in particular.

Mark Boehm, MBA, CWPPTM, was instrumental in pulling this book together. His contributions in terms of content were outstanding, and his editorial commentary improved the flow and delivery of information tremendously. His expertise was invaluable.

Mr. Boehm received his Bachelor of Science (BS) degree from Cornell University School of Agriculture and Life Sciences, and Master of Business Administration (MBA) degree from Southern Methodist University. He is a principal with Alpha Wealth Management, a boutique financial services firm providing asset protection, tax reduction, and advanced financial planning strategies for high-net-worth clientele. Mr. Boehm serves as an expert consultant on all things life insurance related—planning techniques, life settlements (retail and institutional), and captive insurance.

Thank you, Mark, for all your help and input.

Carl Allen III’s input regarding forensic accounting investigation was key. Carl is the owner of Allen Financial Services, LLC. He is a graduate of North Carolina State University (BS Mathematics, 1972) and Durham Technical Community College (AAS Accounting, 1976). Mr. Allen is currently a member of the Association of Certified Fraud Examiners, the National Association of Tax Professionals, and the National Society of Tax Professionals. He is a volunteer representative for the NC State University Student Aid Association, and provides support and resources for Elon University students pursuing opportunities through their career center.

Mr. Allen has served in various financial management positions over the past 30 years with companies in the insurance and construction industries. He provides accounting and technical support for small businesses in the areas of: fraud investigations, interim accounting management support, accounting and project consulting, and income tax preparation and planning.

Thanks, Carl.

Aaron Skloff, AIF, CFA, MBA, provided much of the content for this book. Let me outline for you briefly a few of his accomplishments so you can understand the level of advice you’re about to receive.

Mr. Skloff received a Bachelor of Science (BS) degree in accounting from Pennsylvania State University’s Smeal College of Business and Master of Business Administration (MBA) degree in finance from New York University’s Stern School of Business. He is a Chartered Financial Analyst (CFA), a member of the CFA Institute (formerly the Association for Investment Management and Research) and an Accredited Investment Fiduciary (AIF).

He has taught finance courses through Rutgers University. His equity research reports have been published on the two largest financial research databases, First Call and Multex. During the course of his professional career, he has been cited by the Associated Press, Business Week, Dow Jones, Fortune, Princeton Business Journal, Reuters, Wall Street Journal, and other news organizations.

Mr. Skloff is CEO of Skloff Financial Group, a register investment advisor firm based in Berkeley Heights, New Jersey. The firm specializes in financial planning, investment management, and risk management for individuals and families and group benefit for employers.

Thank you, Aaron.

I’d also like to gratefully extend my sincere appreciation to all the people from John Wiley & Sons who were instrumental in bringing this book to press.

Lance Wallach

Introduction

Every Accountant and Attorney Should Read This Book

Honey, I forgot to duck …

—World Heavyweight Champion Jack Dempsey after losing the heavyweight title to Gene Tunney in 1926

For better or worse, it is the year of Bernie Madoff. His investment firm, a hollow Trojan Horse parked on Wall Street, was emblematic of a financial system that strangled itself on opportunistic lies about complexity and global markets.

Complexity in volatile trading markets certainly exists, but too often the fund packaging nomenclature was used to shield mediocre and abysmally poor fund managers from the results of their shenanigans, operating as a buffer between the managers and their clients. Arias for what used to be called merely “trading” became surgery on financial instruments and rebundled new packages.

The problem, as one analyst said, was that these people claimed sophistication but they had no artistry.

In the arts and finance, people follow stars.

Once Bernard L. Madoff’s mysterious but outperforming methodology gained public traction, the volume of investors lined up to suck on the teat of putative success and was the line around the block in posh zip codes. Business owner - investors might have camped out in line, too, but they needed to be at work in the morning to face the constant purveyors of erosion to their businesses.

Madoff Investment Securities garnered much privately held largesse. And yet, believe it or not, there may be worse players out there than “the Bernster.” Corporate workers know their 401(k)s or pension incentive plans are faring to the bad side lately.

If workers want to feel better, they should look west—to California to be exact. The Sunshine State holds publicly funded asset pension trusts as large as a roundup of third-world debtor nations. Guess how much they ’ve lost recently? If you’re a public employee, you need to know, and you need to know why. If you’ re a business owner, you also need to know how and why.

The key margin is the players between corporate and public entities. That would be you—small- and mid-size business owner-investors. As if you’ re not burdened enough, no longer can you afford to let a rising stock market raise all boats—drownings, sharks, and icebergs have already been sighted.

You cannot afford to calculate mystery black box schemes perpetrated by former NASDQ Chairs—one Bernard Madoff to be exact. Due diligence in all phases of business operations seems in order. This diligence will require no sleep for the next, oh, 10 to 20 years.

Not really, if you can answer one basic question:

Why don’t “experts” read the IRS code like a medical school manual of surgery?

Answer(s):

First, there aren’t that many “experts,” and those that are seek to keep a low profile (in comparison to TV talking heads who make their money from boob tube salaries, not real -world contingencies), because they have had a loyal clientele for decades. The sad news is—they don’t need you; in fact, they probably couldn’t fit you into their mad schedule.

Second, capitalism does share in archetypes that fly below the radar (because they’re legal strategies) and rewards due diligence with annual gains rather than one-time overlarge payouts (the latter used to be called gambling).

Third, a team approach to business investing, utilizing a tax strategist, insurance—legal specialist and financial planner, who actually talk to and meet one another—will, in the long run, outperform the one-shot wonders.

In this book, we provide you the blueprint. You need to take the necessary actions. Business owner -investors are the middle layer between public service-government organizations and multinational corporations. You are the serious music the U.S. dream and economy thrive upon.

I would say you need to learn how to box.

CHAPTER 1

Meltdown

Muhammad Ali: Superman don’t need no seat belt.Flight Attendant: Superman don’t need no plane, neither.