Protecting Clients from Fraud, Incompetence and Scams

Protecting Clients from Fraud, Incompetence and Scams

by Lance Wallach


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Protecting Clients from Fraud, Incompetence and Scams by Lance Wallach

Protect your clients – and yourself – from all kindsof financial chicanery and stupidity with this vital new book

It doesn't matter if a financial error was made because ofmalice or ignorance – the end result is that you lose money.Luckily, you don't have to sit idly and take it. If you haveProtecting Clients from Fraud, Incompetence and Scams, youcan identify and avoid the dysfunctional sectors of the financialindustry, steer clear of the fallout from the Madoff Era, and guideyour clients to real, healthy, sustainable returns. This powerfulbook

  • Pinpoints dysfunctional sectors within the financial industryand offers advice against frauds and scammers
  • Shows how a team approach to asset management can ward offfinancial predators
  • Offers practical strategies and tools to combat client risk forRisk and Asset Management

Offering insightful information to protect your clients from allsorts of frauds and incompetence, this essential guide equips youwith tips and techniques to spot the red flags of fraud and preventit before it starts.

Product Details

ISBN-13: 9780470539743
Publisher: Wiley
Publication date: 02/22/2010
Pages: 240
Product dimensions: 6.20(w) x 9.00(h) x 1.00(d)

About the Author

LANCE WALLACH, CLU, CHFC, is a leading speaker on accounting and taxation topics and the author of numerous AICPA CPE exam publications. In addition to developing CPE courses, he is also a member of the AICPA faculty of teaching professionals, and has been featured in the Wall Street Journal, the New York Times, Bloomberg Financial News, NBC, National Public Radio's All Things Considered, and other radio talk shows. Mr. Wallach is listed in Who's Who in Finance and Business.

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Table of Contents

Acknowledgments ix

Introduction: Every Accountant and Attorney Should Read This Book xiii

Chapter 1 Meltdown 1

The Party's Over 2

We All Know the Result 3

Grim Statistics 4

Retirement Plans and the IRS 8

Summary 12

Chapter 2 Everyone Needs a Family Office 15

Why a Family Office? 15

Retaining a Firm 18

The Family Office Advantage 19

Summary 20

Chapter 3 Protect Your (Retirement) Assets 21

The Fiduciary Duty 21

Documenting a Process 22

Plan Options/Simple IRA 23

You Cannot Save Enough 24

Another Option-The 412(e)(3) 25

The Cash-Balance Plan 26

Summary 28

Chapter 4 How Much Did You Lose Last Year? 29

Basic Financial Strategies Quiz 29

Estate and Financial Planning 30

Life Insurance 31

Succession Planning 31

The Buy-Sell 32

Medical Insurance 32

Asset Protection 32


Other Post-Employment Benefits 33

OPEB Cost 34

VEBA Plan Benefits 37

Taxes 38

Retirement 39

Legislative Changes 39


412(e) 40

Audits 40

Shelters 41

6707A 43

Captives 50

Summary 50

Chapter 5 Self-Defense 51

Captive Insurance 52

Basics 52

Sharing 53

Caveats 54

Summary 55

Chapter 6 Asset Protection Basics 57

Asset Protection-Necessity, Not Luxury 57

Who Needs Asset Protection? 58

Separating Ownership from Control 60

What Is an Asset Protection Plan? 61

What Is a Trust? 62

How Does a trust Work? 63

How Is a Trust Used? 63

Offshore Trusts 65

Asset Protection FAQs 67

Summary 70

Chapter 7 Shifting the Risk Equation-Insurance Maneuvers 73

Key Employee Insurance 73

LTCi for the Business Owner 76

Life Insurance for Business Continuation 80

Summary 81

Chapter 8 Reevaluating Existing Insurance 83

Evaluation or Audit 83

Consultative Leverage 87

Summary 89

Chapter 9 What Financial Advisors "Forget" to Tell Their Clients 91

Fiduciary Duty 93

Summary 95

Chapter 10 The Truth About Variable Annuities 97

Variable Annuity Components 98

Mortality and Expense Charges 99

Guarantees 100

Summary 100

Chapter 11 What Life Insurance Agents "Forget" to Tell Their Clients 103

Questionable Aspirations 103

Coverage Needs 104

Estate Taxes 104

The ILIT 106

Summary 107

Chapter 12 What You Must Know About Life Settlements 109

Life Settlements 109

Industry Regulation and Compliance 111

Licensing and Reporting 112

Compensation 113

Compensation Abuse 114

Suitability 115

Best Execution and Due Diligence 118

Fraud Prevention 119


Evaluation and Processing 123

Tax Treatment 126

Case Studies 133

Caveat Venditor 138

Summary 139

Chapter 13 What Health Insurance Agents "Forget" to Tell Their Clients 143

Out of Control Costs 143

Small Business at Risk 146

The Risk of On-Site Medical Clinics 151

Using an HSA for Your Personal Retirement 152

Creating an Employee Retirement Vehicle 153

IRS Form 8889 (HSA) 153

More Effective Strategy 154

Aggregate Cap Planning 155

HRA 156

Managing General Underwriter 158

Summary 160

Chapter 14 College Funding Strategies and Solutions 163

The Traditional Approach 163

Good Intentions, Disastrous Consequences 166

Traditional Vehicles 168

Real Life 180

Summary 187

Chapter 15 Two Alternative Investments for Financial Independence 189

The Tertiary Market 190

History 191

Risk 192

Reward 194

Another Alternative 194

O&G Advantages 195

Summary 197

Chapter 16 Avoiding Fraud: Small Business Case Study 199

Introduction 199

Suspicion 200

Investigation 201

Fraud 202

Dismissal and Prosecution 204

New Mechanisms 205

Summary 206

Appendix A Best of the Best 207

Insurance Advisors 207

Investment Advisors 207

Law 209

Business Services 210

Epilogue 213

About the Author 215

About the Contributors 217

Mark Boehm, MBA, CWPP 217

Aaron Skloff, AJF, CFA, MBA 217

Carl Allen, III 218

Index 219

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Protecting Clients from Fraud, Incompetence and Scams 4.7 out of 5 based on 0 ratings. 10 reviews.
Anonymous More than 1 year ago
A good book if you buy or sell financial products. Very scary stuff in this book that you need to know. A lot of Madoff type stuff to learn about so that you will not be hurt by financial products. They can be stocks, funds, even life insurance. The book had a little too much information, but more is sometimes better than less. Very interesting and quick reading, I could not put this book down. Had some very good advise about stockbrokers, insurance agents, financial products, investments, retirement plans, etc. Stuff you usually do not get anywhere else. The author had a good history in finance, and seems to be in the know. i.e. on the inside. This book will save me a lot of money and grief. Aside from a little too much information on some subjects anyone that owns financial products needs to read and own this book.
Anonymous More than 1 year ago
Must know information for all the buy any financial product. Very usefull for accountants, planners, insurance pros, etc. also. Anyone who even buys life insurance needs to read this book first. Well read and very interesting. Information that you do not find anywhere else. Things you do not think about, but need to know before you invest. Great information about your retirement plan, banks, funds, etc. Almost a Bible for anyone that wants to stay ahead in the financial world. Easy to understand. Learn secrets the IRS does not want you to know. Learn secrets your brokers will never tell you. Learn how to get back all your market loses with out even suing. Just one idea is well worth the price of the book. Salespeople of financial products should also read the book, to learn the truth about what they are selling. Could have used a few more pictures.
Anonymous More than 1 year ago
If you buy financial products you should read this book. If you sell products this is a must read. The book was a little long, but great reading.
Saul50 More than 1 year ago
Great source of imformation about everything an advisor needs to be aware of when helping clients in today's economy. Wallach has an inside track on information that we all should, but don't know.
Anonymous More than 1 year ago
419 welfare benefit plan audits lawsuits get your money back Published on Published onJanuary 9, 2018 Edit article View stats Lance Wallach Lance Wallach Abusive tax shelters, 419, section 79, 412i micro captive insurance, VEBA, expert witness, author, speaker 744 articles Unlike 1 Comment 0 By Lance Wallach Lance Wallach, 419 welfare benefit plans, 412i retirement plans, 412i, tax shelter litigation, abusive tax shelters, fight tax shelter penalty, Bankers Life, Hartford Life, CRESP, American General Life, Bisys, Benistar, United Financial Group, Grist Mill Trust Accountants who are unaware of recent developments are likely to encounter a nightmarish scenario that may play out something like this: you sign a client’s tax return that claims a tax deduction for participation in a “welfare benefit plan”. A few years pass, and nothing happens. Then, on audit, the deductions are disallowed and your client is hit with back taxes, penalties, and interest. He discovers that he may be looking at a large penalty for not disclosing his participation in the plan to the IRS. Naturally, at this point, your client wants out of the plan. But he discovers that he cannot get the money that he has contributed out of the plan. He finds that the money is being used by the plan sponsor to fight the IRS; his money is being used to defend a plan that he no longer wants to be in. This is claimed to be legal. Or he may even find that the money is simply gone, that it has been stolen or otherwise misappropriated. And now you find that you are a “material advisor” with respect to your client’s participation in the plan. Like your client, you were supposed to disclose your role here; in your case, as a “material advisor”. You also may be looking at a large penalty for failing to disclose. If you think this could never happen to you, think again. Welfare benefit plans are a creation of and are sanctioned by Section 419 of the Internal Revenue Code. There are single employer plans and multiple employer plans; the latter rely mostly on IRC Section 419A (f) (6) (in the most common cases where there are ten or more employers as part of the same plan). The 419A(f)(6) plans are, and perhaps always were, generally regarded as abusive, and were substantially curtailed in recent years by harsh IRS regulation. Amazingly, however, they refuse to totally die, and are still being marketed. These plans are called listed transactions (more on that later). While the principle purpose of this article is to discuss the current state of the welfare benefit plan, and everything outside of this paragraph will do just that, it is perhaps worth noting that welfare benefit plans are not the only subject of current IRS scrutiny and/or regulation. The Section 412(i) defined benefit plan, for example, is such a target that a task force has been formed internally solely to audit 412(i) plans. Many of them are being deemed listed transactions, many of the plans are being involuntarily terminated, and back taxes, penalties, and interest are being assessed. Not surprisingly, all of this has resulted in considerable litigation. Single employer welfare benefit plans are now more popular than multiple employer plans. All welfare benefit plans tend to share certain characteristics, however. They tend to be marketed most frequently by insurance agents and financial planners, and sometimes by accountants and attorneys. Prospects tend to be professionals and profita
BestCPA4U More than 1 year ago
If we make a financial error becasue of ignorance or malice, the resultis the same, the client looses money. This book helped me identify and will help you steer clear of many problems within the financial industry. The author seems to have inside information about many topics which were very helpful to me and to my clients. This book is a quick read and is even humorous. My only criticism is that I think the author could have elaborated on protecting retirement assests.
CPAKYM More than 1 year ago
I read the pre-publication of this important work. All acountants, financial advisors and others will benefit from the knowledge and the insight offered in this must read book.
TheBigBrain More than 1 year ago
In this day of bank bailouts, Bernie Madoff's and worse, you can't always tell when someone is just plain lying. You need the kind of information in this book to get ahead of the scammers. This book gives professionals and even consumers information they need to protect their assets.
Anonymous More than 1 year ago
Anonymous More than 1 year ago