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Protecting Clients from Fraud, Incompetence and Scams

Protecting Clients from Fraud, Incompetence and Scams

by Lance Wallach


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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.

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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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