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Not-for-Profit Contributions: Counting v. Accounting

Post author By FFC
Post date June 8, 2017

Not-for-Profit Contributions: Counting v. Accounting

When is a contribution to a not-for-profit really a contribution? Many would say it depends on whether you ask someone in the accounting or development department. While the accounting office recognizes contributions in accordance with generally accepted accounting principles (GAAP), there are no required standards for counting and reporting fundraising receipts by the development office. The resulting differences create perhaps the greatest source of tension between the two teams. So what can be done to bridge the gap and foster a cooperative relationship that will best benefit the not-for-profit?

First, accept that what gets reported by each group will be different. And that’s okay, as long as the differences can be explained. There’s no need to hash out who’s right or wrong; just take time to understand each other’s math. What gets included, by whom, and when? Accountants need to explain GAAP in “non-accountant” language. Similarly, the development team needs to establish and share its consistent guidelines for reporting fundraising activity. Developing this understanding will take time and patience on both sides but is essential to forming a good working relationship.

Once the groundwork has been laid out, consider taking the following steps to nurture the relationship, prevent frustration and limit surprises:

Promote open and ongoing communication between the accounting and development departments. Set up a regular meeting, ideally monthly but no less than quarterly, to discuss recent fundraising activity.

Develop a reconciliation process between the financial and fundraising systems.

Encourage communication between groups when large or unusual gifts are received so that both clearly understand the gift terms and how to report them properly on both sides.

Create written policies that outline the processes and documentation requirements for gift acceptance. The AICPA Not-for-Profit Section created a sample gift acceptance policy that you may be interested in reviewing. In addition, ensure that processes are in place to handle gifts with terms that fall outside of the normal gift acceptance policy.

For not-for-profits that have finance and development committees of their board of trustees, have someone from each group attend the other’s committee meeting. It can be confusing for board members to get seemingly different information on what appears to be the same subject. Knowing what information is being presented allows both departments to tailor their presentations, resulting in more clarity across the board.

The accounting and fundraising relationship, like any other, takes ongoing hard work to make it succeed. Remember to communicate, cooperate and collaborate!

Additional valuable resources related to gift acceptance can be found by visiting the AICPA Not-for-Profit Section website.

Karen Craig, CPA. Karen is a consultant providing technical accounting, reporting, finance, and analytical expertise to not-for-profits with a focus on higher education. Karen served as Associate Controller at Stanford University from 2002-2009, where she was responsible for the overall operations of the university’s investment accounting, financial reporting, capital accounting, payroll and disbursements departments.

Counting money courtesy of Shutterstock.

Nonprofit Contributions: Counting v. Accounting

Post author By FFC
Post date June 8, 2017

Nonprofit Contributions: Counting v. Accounting

Once the groundwork has been laid out, consider taking the following steps to nurture the relationship, prevent frustration and limit surprises:

Promote open and ongoing communication between the accounting and development departments. Set up a regular meeting, ideally monthly but no less than quarterly, to discuss recent fundraising activity.

Develop a reconciliation process between the financial and fundraising systems.

Encourage communication between groups when large or unusual gifts are received so that both clearly understand the gift terms and how to report them properly on both sides.

Create written policies that outline the processes and documentation requirements for gift acceptance. The AICPA Not-for-Profit Section created a sample gift acceptance policy that you may be interested in reviewing. In addition, ensure that processes are in place to handle gifts with terms that fall outside of the normal gift acceptance policy.

The accounting and fundraising relationship, like any other, takes ongoing hard work to make it succeed. Remember to communicate, cooperate and collaborate!

Additional valuable resources related to gift acceptance can be found by visiting the AICPA Not-for-Profit Section website.

Counting money courtesy of Shutterstock.

Social Media: The Conference Success Secret Weapon

Post author By FFC
Post date June 7, 2017

Social Media: The Conference Success Secret Weapon

Conferences give you the opportunity to network and become energized about the accounting profession and the direction in which it’s heading. Most people know the standard networking methods – attend receptions and collect business cards. But how can you make the most of the experience before, during and after the event?

Social media is present at almost every conference, giving you the opportunity to develop high-quality connections while staying in the loop on all the happenings.

Here are five ways you can utilize social media to make the most of your time and money:

Join the conversation.

As social media becomes omnipresent, if you don’t look to these platforms, you’ll miss out on the opportunity to join conversations about conferences and events. Follow the event hashtag on Twitter and Instagram or see if the organization hosting the event has LinkedIn groups you can join. By using these interactive forums, you can see who else is attending an event, set up conference meetups, and even reach out to influencers who may be on site.

Take and steal digital notes.

While you may spend hours planning your schedule prior to a conference, you can’t be in two places at once. When you follow an event hashtag, your peers are putting out quotes and tidbits of information from all different sessions. Not only are they visible for everyone to read, they’re also archived, giving you the ability to go back and learn something new, even if you weren’t physically sitting in the room.

Ditch the business cards.

There’s nothing worse than meeting someone at a reception who could build and enhance your professional network, just to get back to the office and not being able to find their business card. To ensure that you’re able to connect and develop that relationship, pull out your phone and connect with them on LinkedIn. No time to connect on LinkedIn at that moment? Ask to take a photo of their conference ID so you can connect with them when you do have a free moment. Not only will you have the opportunity to learn more about their background, but you’ll eliminate the risk of not being able to follow up.

Engage with brands.

Prior to the event, make sure you’ve followed different brands that will be on site, especially the organization hosting the conference. Most often, they’ll be posting updates or reminders on social about sessions and events that are going on. They often times also use social media to “go live” and give you backstage access to the event and exclusive interviews with speakers.

Follow up.

Often times, your to-do list grows when you return from conferences. You’re excited about new ideas and want to hit the ground running. So how can you find time to connect with the long list of people you met? Be sure you’ve connected with them on LinkedIn and followed them on Twitter. Not only can you stay in touch, but these are peers that will be readily available to help you grow your ideas and utilize learnings from the event. Don’t underestimate the power of the connections you made!

Conferences can be both exciting and overwhelming, but by using social media you can make the most of your experience. Looking for a professional development opportunity? Join us at AICPA ENGAGE, the profession’s premier learning event. It provides you with the opportunity to attend up to six conferences in one unique event. Grow your knowledge in a host of areas including cybersecurity, diversity, personal financial planning, tax, firm practice management and marketing. Attend online or onsite, June 11-15 in Las Vegas.

Liz Rock, Associate Manager–Enterprise Social Media, Association of International Certified Professional Accountants

Social media at conferences courtesy of Shutterstock.

Coming Trends in Services to Individuals

Post author By FFC
Post date June 5, 2017

Coming Trends in Services to Individuals

CPAs are forward-thinking and relationship-oriented professionals. Taking the time with individual clients to think about their needs holistically has been a growing trend in the profession over the past decade, leading to the many new areas that now benefit mightily from the expertise and insight a CPA can offer. These are exciting times that bring new possibilities for firms that are willing to embrace them. The firms that do will find success, longevity and a satisfied client base.

CPA as a Value Hub

In this digital era, consumers expect value, convenience and immediacy. The demands on their time and tolerances are now such that any promise to return precious minutes to them has a tremendous appeal.

Banks and brokerages are just two of many organizations now using free tax preparation as a loss leader to attract clients to their more lucrative offerings. And while the allure of free services is strong enough for many consumers, the idea that their entire spectrum of financial needs is being met in a single location can really seal the deal. CPAs take note: your clients are being actively courted by these organizations, and in the near future, consumers will expect this kind of integration in their financial services: services that include personal financial planning.

The good news is that 120,000 AICPA members already offer some level of personal financial planning to their clients, according to a recent study. However, only a small portion of those are identifying themselves as “financial planners,” often because they associate the term with investments and offering products. But failing to use the term means their clients and prospective clients are not likely aware that these services are being offered. This is an important point: research shows that when referring to activities such as estate planning, retirement planning, risk management, investment planning and tax planning, “financial planning” is the term that resonates best with consumers. It’s what they’ll be looking for in a value hub.

If your firm focuses on tax planning and compliance, you already know that the combination of technology advances and tax preparation services offered for free by financial service companies is challenging your value. Firms that choose to adopt a broader range of services, what’s being called integrated financial planning services, will likely experience far higher client retention and attract more new clients in the near future. The time to act is now, while your client base is just now understanding that the complexity of their financial service needs require a single point of contact for guidance and advice.

The Growing Demand

If you’re like most CPAs, your focus is on your clients’ needs. Those needs are changing.

Baby Boomers have begun retiring at a rate of 10,000 per day, and will continue at that rate for the next decade. Furthermore, $24 trillion in wealth will be transferring to subsequent generations over the next 15 years. While taxes will be on their minds, clearly estate, retirement and investment planning will be as well. And their benefactors will need guidance, too. This is an enormous area of client need that the U.S. Bureau of Labor reports 30 percent growth in.

A Perfect Fit for Your Firm

CPAs dominate the market for the most complex tax returns, and it’s these clients who will most need the financial planning services I’ve discussed here. CPAs already provide many of these services. For many of you, it won’t be a big leap. The way you conduct business is also aligned perfectly with what the market for financial planning services wants: acting in the best interest of the clients’ in what is typically a fee-only structure.

As the market for CPAs continues to shift, an emphasis on tax planning and compliance will broaden to those CPAs who can act as a trusted personal financial adviser for their clients. It’s the direction the profession is taking, and I urge you to prepare for it.

At the coming ENGAGE conference, I will be hosting “The Future of Services to Individuals,” a session discussing these and related issues in greater detail. The session begins at 10:50 a.m. PT June 14, and is part of the ENGAGE Impact Track.

If you want to learn more, I suggest you make use of the extensive suite of resources available from the AICPA PFP Section.

Lyle K. Benson, Jr., CPA/PFS, is the President and Founder of L.K. Benson & Company, a CPA/Financial Planning firm based in Baltimore, Maryland. As a leader in the financial planning and accounting professions, he has served in many roles of various professional organizations over the past 30 years and is the immediate past chairman of the AICPA PFP Division Executive Committee. He is also a member of the CCH Financial and Estate Planning Advisory Board and co-founder and head of the Athena Study Group.

5 Tips to Help Identify Fake Financial News

Post author By FFC
Post date June 2, 2017

5 Tips to Help Identify Fake Financial News

The AICPA National CPA Financial Literacy Commission Shares Insight on How to Beat the Real Threat of Fake Financial News

If it’s on the internet and in ALL CAPS it must be true! Whether it’s the GUY WHO TURNED $10,000 INTO $20 MILLION or the HOT TECH STOCK THAT WILL SHOCK YOU, you’ve probably seen some version of this fake news dozens of times a day. And, if you’re like me, you’ve probably clicked on one of these articles out of curiosity and quickly found yourself lost in a sea of misinformation. Sometimes it seems like you need to be a detective to decipher what financial news is real and what is fabricated. In this post, I’ll provide some information to help consumers be better prepared.

Completely fabricated financial news stories are nothing new, but with the rise of the internet and more people sharing articles on social media, fake financial news feels more commonplace than ever before. And that’s a serious problem. In fact, a new survey, conducted by Harris Poll on behalf of the AICPA to raise awareness of the scope of the issue and help consumers protect themselves, found that almost 3-in-5 Americans (58 percent) believe fake news is a serious threat to their financial decision making. Those sentiments are consistent for both genders, among household incomes and across generations – meaning that a lot of people from all walks of life are struggling with this issue.

Like me, many Americans (63 percent) are finding it more difficult to make critical financial decisions because of the spread of fake news. Specifically, Americans are having a harder time with healthcare decisions (44 percent), investing in the stock market (40 percent), retiring (36 percent) and buying or selling a house (35 percent). Americans are right to be wary, as these decisions can have serious, long-term implications and can be difficult to make even with accurate information.

And while fake news has made it more difficult to make financial decisions, more than 3-in-4 Americans feel it’s important to act fast to make financial decisions when breaking financial news becomes available. That’s a frightening statistic. Because even when reliable financial news becomes available, it’s rarely advisable to make financial decisions impulsively. Acting hastily doesn’t allow the proper time to think a decision through and weigh the long- and short-term financial implications.

The fake financial news forecast doesn’t look good – a majority of Americans (51 percent) expect fake news and misleading headlines to get more prevalent in the next year or two. However, with a diligent approach, consumers can separate real financial news from those fake headlines designed to mislead. The AICPA National CPA Financial Literacy Commission has five tips to keep all of us from getting lured into the fake financial news trap:

Do your due diligence. Quickly reacting to market-moving news, real or fake, can be tempting but most investment plans are designed for the long term. If you have a pressing financial question, ask the Money Doctors – a panel of qualified CPAs that have attained the Personal Financial Specialists (PFS) credential for comprehensive financial planning.

Be suspicious of outrageous claims. Always research the source if you’re unfamiliar with the outlet and read some of their other articles. Inadequate evidence or extensive use of unnamed experts may suggest a false news story. Always corroborate the story with other reports.

Watch out for website spoofing. Fake financial news articles published on these websites have the appearance of being from a credible source, but are actually designed to mislead readers.

Closely scrutinize sponsored content and advertorials. These articles are often designed to look like reported content, but are actually outside of a news organization’s editorial content.

Look out for pranks. Fake news can sometimes be hard to tell apart from humor or satire and many people can be misled. Check to see if the source is known for parody and the article is a joke – particularly if you see it shared on social media rather than on the source website.

Jonathan Lynch, Manager – Public Relations, Association of International Certified Professional Accountants

3 Tips to Help You Remember What You’ve Learned

Post author By FFC
Post date June 1, 2017

3 Tips to Help You Remember What You’ve Learned

You’ve probably heard the expression use it or lose it. It turns out this applies to learning as well as physical fitness. There is a force that gradually erases all the great insights and instruction you stored in your brain during a learning event called “The Forgetting Curve.” German psychologist Hermann Ebbinghaus first researched this concept in 1885. The curve illustrates the decline of our memory retention over time if we make no attempt to retain our learning. The further we get from the educational experience, the less information we remember.

The speed at which we forget information is influenced by various factors including the difficulty of the material, how meaningful the information is and how it’s presented. Stress levels and lack of sleep can also have a negative impact. Thankfully there are steps you can take to help you retain what you learned. Here a few of my favorite tips to help you remember.

Leverage note taking apps for efficiency

Most learning events (conferences, workshops, virtual classrooms, etc.) present a vast amount of information in a very rapid manner. If you can’t successfully capture rapid-fire insights, then you can’t retain or apply that learning because those insights escaped you. Leverage technology to maximize these moments and keep you in the race for valuable knowledge. Instead of frantically searching for a new pen once yours inevitably runs out of ink just when the best key takeaway is being shared, consider exploring some powerful apps to increase efficiency.

One of my personal favorites is Evernote. This app has the capability to format text, integrate images in-line with text (using the camera feature to photograph whiteboards or slides is popular), search within notes and tag locations and much more. Evernote is downloaded on both my iPhone and iPad. I use it to synchronize all my notebook entries.

Share and distribute

Summarizing your key takeaways and insights as if you were planning to teach them could be one of the best ways to retain and apply learning. Research studies show that you can only teach something when you’ve retained that information. An easy way to do this is to share your insights with colleagues at work, via social media channels and/or communities of practice. If you leverage technology apps for efficient note-taking, you have the capability to post directly to Twitter or LinkedIn.

Designate a drawer and bookmark browser articles

At your workstation or in your home office use folders for storing articles, slides and participant workbooks from conferences and workshops. Digitally you can store infographics, articles and whitepapers in your online browser bookmarks. Or create a Pinterest board for your professional development. You can pin things you want to read or review later and even share your board with your peers.

Each person has their own preference pertaining to hard or soft copy documents, but mine is to walk around, even if I am just pacing around the office, with documents in hand. I use one color highlighter to mark the strongest, most relevant points and a different color for the nice-to-know points. These valuable documents are then stored in a drawer designated for professional development. My calendar is blocked for two hours of professional development each week. Pulling open my drawer can push my efforts forward towards retaining and applying learning insights with greater intention.

Actively engaging with educational materials and sharing your learning will help you make the most out of your professional development opportunities. Determine what works for you and create a plan before your next learning event to help you commit your new knowledge to memory.

AICPA ENGAGE provides you with the opportunity to attend up to 6 conferences in one unique event. Grow your knowledge in a host of areas including cybersecurity, diversity, personal financial planning, tax, firm practice management and marketing. Attend online or onsite, June 11-15.

Michael Grant, Director, Learning Design & Development, Association of International Certified Professional Accountants

Tablet courtesy of Getty Images.

5 Tips for Navigating the Road to Leadership

Post author By FFC
Post date May 31, 2017

5 Tips for Navigating the Road to Leadership

My first job out of college was the best and worst experience of my life, and it taught me a lot about leadership. I started my career at Target, and because I had studied business, they had me running an area with five people reporting to me. My staff ranged from workers with little apparent interest in their jobs, to team leaders who were reporting to me. The challenges of running such a varied team can be overwhelming, but the job also gave me a tremendous range of responsibilities and leadership experiences, forcing me to learn quickly and be decisive. In the end, it was a good first job that certainly stretched me and helped me see that I could be a successful leader.

Taking the reins of leadership can be daunting, but along the way I have learned a number of useful lessons for current and aspiring leaders.

Disappointments Are a Learning Experience

One of my toughest lessons came when I found out that the person most qualified for a job doesn’t always get it. It can be a tough pill to swallow. I had worked many long hours for one company, and when a new supervisor arrived who was unaware of all my contributions, they ended up giving the promotion I had hoped for to someone else. My advice for those who face similar disappointments is not to be discouraged or allow the experience to shake your confidence. In the end, your record will speak for itself. Your skills and experience will qualify you for other opportunities.

You May Have to Move On to Move Up

After losing out on the promotion, I made a realistic assessment of my prospects in my current position. I decided I might not have a great future working for the new supervisor, so I began researching other opportunities. The lesson for me was that if you can’t see a clear path to a leadership goal, it’s important to evaluate what steps it will take to put you back on track, which may include a change of job or organization.

State Your Expectations

There’s great value in saying up front exactly what you want in any situation. After losing out on the promotion, I began interviewing for a new job as a controller. Having previously devoted a great deal of overtime hours with a company, I realized I had to set boundaries. As a result, I told every interviewer that I wouldn’t work weekends. If you don’t set boundaries at the beginning, it’s a mistake to think you’ll be able to get what you want later. I ended up with a job that better suited my aspirations, and I never had to work weekends. If I hadn’t been so assertive about what I wanted, I don’t think that would have been the case, and that would have been a major drawback to what turned out to be a good job.

Don’t Be Afraid to Aim Higher

I think that when we find ourselves stagnating in a decent job and favorable work environment, we sometimes feel we should be satisfied and not seek out greater challenges or opportunities. But it’s a mistake to give up on wanting more. That includes having the confidence to stretch yourself, something women may be less likely to do. In particular, women may be hesitant to apply for a job unless they perfectly suit the qualifications. I consider myself to be very confident, and yet if I looked at a job description that said manufacturing experience was preferred and I didn’t have it, I wouldn’t apply. But every job is a learning experience, and hesitating to take a chance could prevent professionals from expanding their knowledge and horizons.

Invite Alternate Views

Leaders are better informed and better able to make decisions when they hear a variety of differing perspectives or opposing views. When we as leaders have an open mind—and thick skin—we benefit from a broader range of ideas and candid assessments of current problems or needed change. It’s not helpful if everyone agrees with you. Successful people understand the value of differing opinions.

Benefitting from Lessons Learned

Most of us have had good and bad experiences on the job, and there may be times when we feel stuck in our careers. The good news is that there are many lessons that novice and veteran leaders can learn from everyday experiences. The trick is to believe in yourself and to continue to pursue the opportunities you seek.

Kathryn Lockhart, CPA, CGMA, is vice president and controller of Noodles & Company and a member of the AICPA Women’s Initiatives Executive Committee. For more insights into lessons learned by women leaders, visit the Women in the Profession video channel on AICPA TV.

Road courtesy of Shutterstock.

The One Personality Trait All CPAs Share

Post author By FFC
Post date May 26, 2017

The One Personality Trait All CPAs Share

As Asian American and Pacific Islander Heritage Month comes to a close, we share the story of one CPA, his remarkable achievements and the traits that were instilled in him growing up in a Chinese-American household.

In my five years working closely with CPAs of diverse backgrounds, I am increasingly seeing one very consistent trait all CPAs seem to share, no matter what their background: drive. I know CPAs who have faced frustrating, even heartbreaking obstacles in pursuit of their credential. Even through the obstacles those same CPAs also strive for excellence in every aspect of their lives.

That certainly seems to be the case with Patrick B. Lee, CPA. It’s not something he can shut off. Whether he’s teaching or running a marathon, he always seems to be devising new strategies to do things better and faster.

As someone whose instinct tells him to analyze and problem-solve, Lee, an assistant professor of accounting at Southwestern College in Winfield, Kansas, finds that drive creeping into all areas of his life.

“I don’t mind the running, I guess,” said Lee nonchalantly. “I enjoy the mental game — can I get it done? Being the accountant that I am, I’m thinking about my average mile time. Those calculations are running through my head the entire time.”

Lee doesn’t consider himself an athlete, yet he’s motivated to keep running. His office walls are strung with medals from Disney marathons and other events. Through running, he saw a local business opportunity, starting his own company that provides official timing for road races. Even a part-time job he landed in college — what was supposed to be just a fun way to earn extra cash — has translated into a 14-year stint managing high-stakes cheerleading competitions.

Lee juggles it all while growing the Southwestern accounting program, and the audience for his accounting-focused YouTube channel.

“If you really think about it, being a CPA you have to be driven, because those tests are not easy,” said Lee, who started his career as an auditor at Deloitte. “If you’re not driven to study for them, you’re not going to pass. If you’re not driven to work your 40 hours and then go home and study, you’re not going to pass. Whether or not you want to be driven, you have to be, and that drive spreads to the other things you do.”

Lee attributes much of his success to his upbringing in a Chinese-American household. His parents each emigrated from Hong Kong as children, and brought with them a culture that places high value on discipline and academic achievement, he said.

“That’s just the way we grew up,” Lee said. “You did your work first. If your homework wasn’t done, there was no watching TV.” Lee’s mother stayed home to raise him and his younger brother while his father worked late and on weekends at a warehouse job, picking up as many extra shifts as he could.

“The idea was the harder you work, the more successful you’ll be, and that’s part of the reason I’ve become so driven,” Lee said. The work ethic instilled by his parents is one facet of Lee’s richly diverse experiences.

Among all of his endeavors, Lee also finds time to work with the AICPA Diversity & Inclusion initiative, whose mission is to promote a workplace that is reflective and inclusive of the global communities in which they serve. Lee meets with students across the U.S. and encourages those from traditionally underrepresented backgrounds to pursue education and careers in accounting.

“Working with students is a passion of mine,” said Lee, who left Deloitte and then sold his own firm to pursue teaching. “And working with diversity and inclusion allows me to help create a better, more diverse population of accountants. Whether that’s in different ethnicities or having more females as CPAs, I think that allows the profession to grow exponentially for a diverse population that has diverse needs, all working to solve the same problems.”

We all know CPAs who demonstrate motivation and drive, like Patrick does. At the same time, we recognize that CPAs of diverse backgrounds bring different talents, skillsets and perspectives to the work environment. If you want to know more about how to tap into the benefits of a diverse workforce, and strengthen the diversity and inclusion programs at your firm, join me and my team at the AICPA ENGAGE conference, taking place in Las Vegas, NV and online June 12-15, 2017. Attendees gain access to six high-powered educational conferences and earn up to 35 CPE credits. Key sessions related to diversity and inclusion initiatives include a panel led by AICPA Chairman Kimberly Ellison-Taylor on driving innovation through inclusion, a session led by Kim Drumgo, Director- Diversity & Inclusion, Association of International Certified Professional Accountants- Public Accounting, on developing a global mindset, and a session on multicultural marketing led by Global Diversity Marketing founder and CEO, Tariq Khan. I would also recommend tuning in for a live webcast and fireside chat on disruption in financial services which I will be leading alongside Tariq Khan. Also, join me at ENGAGE for learning labs on understanding unconscious bias.

Kim Drumgo, Director – Diversity and Inclusion, Association of International Certified Professional Accountants

4 Things Advisers Should Know about Technology Today

Post author By FFC
Post date May 25, 2017

4 Things Advisers Should Know about Technology Today

As practitioners, we have a responsibility to our clients and to ourselves to stay up to date on the latest tools and techniques of our trade. Most CPAs providing advice to individuals do an admirable job of staying current on tax and financial planning techniques, but not as well staying current on technology issues facing their firm. Here are some technology-related issues practitioners should be focusing on today.

The Pace of Change in Financial Technology (FinTech)

A revolution in financial technology has taken place over the last several years. If anything, the pace of change is accelerating, with implications for all financial service professionals. Until recently late adopters of technology were not penalized for being late to the game, because most of their local competitors were also late adopters. Technology has broken down regional barriers, so today you are not only competing against other local providers, but national and perhaps international providers as well. In addition, new players have entered the marketplace. FinTech startups from Silicon Valley and elsewhere are becoming a disruptive force, raising the technology bar and putting pressure on margins. The bottom line for readers is this: If you are not reviewing and upgrading your firm’s technology at least annually, you are falling behind. If there isn’t someone at the firm specifically responsible for this, the odds are that it won’t get done.

Virtual and Augmented Reality Are Not Just for Gaming

I believe that 2017 could be the year for virtual and augmented reality in financial services. These technologies have many applications in our industry. To cite just a few examples, virtual reality can play a role in gauging a client’s risk tolerance. Clients are less risk averse when markets are going up, and more risk averse after a major market decline. Many advisors say that you can’t accurately gauge a client’s risk tolerance until they have experienced a bear market. Well, why wait for it to happen? With virtual reality, they can experience the pain without the potential financial loss. These technologies use state-of-the-art 3D facial imaging coupled with artificial intelligence algorithms to track and analyze the user’s emotions in real-time, enabling them to find out how they really feel about money, so they can make better money decisions. Another example is aging. When I was much younger, I could not envision aging and retiring. With virtual reality, we can help clients envision what aging and retirement might be like in the hope of modifying behaviors.

Voice Commands

Speech recognition and voice technologies have been around for years, but the accuracy and sophistication of the technology has improved substantially. The unprecedented success of Amazon’s Alexa technology, which powered the Amazon Echo, Dot, Tap and Amazon TV is ushering in a new wave of innovation in the field. It is highly likely that 2017 will be the year that voice commands and Alexa-like technologies make meaningful inroads in financial services; in fact, the revolution has already started. For example, Alexa can already provide stock quotes, set price triggers with real time notifications for US stocks, provide foreign exchange rates, provide financial news from multiple sources, obtain information about various insurance products, calculate mortgage payments and more. Capital One customers can even get transaction and balance information on their credit cards, bank balances, auto loans and home loans by simply asking Alexa. Don’t you think your clients would like similar functionality? You may have to provide it sooner than you think in order to stay competitive.

Auto Technology

I recently went car shopping and was amazed at the advances in auto technology. Major car companies are partnering with Apple, Android and others to enhance auto technology significantly. This means that, by extension, Apple, Amazon and Android mobile apps are going to become available to a large portion of the driving public. If Alexa-type functionality extend to autos, the public will soon be checking their balances and perhaps even performing financial transactions while driving to work. Do your current providers support this functionality today? Probably not, but before long some will, and if some do and yours don’t, you might be at a competitive disadvantage.

In an article this brief, we can just give a few examples of the changes that are, and will be impacting our industry very soon. The hope is that, if you are unaware or unprepared for the unprecedented changes taking place in technology as it relates to financial services, this will serve as a wake-up call and encourage your firm to get up to speed now.

Working with the AICPA Personal Financial Planning Division, I authored The CPA’s Guide to Technology in a PFP Practice, which can help practitioners navigate the vast array of technology decisions for your practice, including general office hardware and software, document management systems, CRM applications, portfolio management and accounting software, financial planning software, custodial information and cloud computing. For more information on the recent ransomware concerns and how you can implement cybersecurity in your practice, access this podcast.

Joel Bruckenstein is an internationally recognized expert on applied technology for financial professionals and Publisher of Technology Tools for Today (T3) — formerly Virtual Office News, now dubbed the T3 Tech Hub. He is also the producer of the annual T3 Advisor Conference, has co-authored three books and has advised financial service firms of all sizes on improving their technologies, processes and workflows for more than 20 years.

Voice recognition courtesy of Shutterstock.

Learning from Prince’s $250 Million Mistake

Post author By FFC
Post date May 24, 2017

Learning from Prince’s 0 Million Mistake

Finally, almost a year and a month to the date of his death, a judge confirmed Prince’s six siblings to be his rightful heirs – after more than 45 people came forward claiming to be his wife, children, siblings or other relatives.

Last year, the legendary musician passed away, leaving behind not only a legacy of unparalleled music, but also a $250 million fortune – with no will or estate plan to be found. With the long-anticipated announcement that his siblings will inherit his fortune, we’re reminded again of the importance of planning ahead and hiring trusted experts to carry out your wishes.

Whether you have people clamoring after your money or not, it’s important to consider hiring an expert to sort through the, at times, very complicated process of estate planning. There are DIY websites and software packages that may seem attractive (and cheap!), but more often than not, you get what you pay for. More complicated life situations, such as children from a prior marriage, children with special needs, or capital gains from property appreciation, require the hands-on insight of an expert.

If you are a CPA or a lawyer, you might consider yourself the expert – but just as authors have other writers proofread their work, it’s important to have an unbiased third party look over your documents. Even U.S. Supreme Court Chief Justice Warren E. Burger, who died in 1995, should have relied on estate planning experts to prepare his estate plan – but instead he took it upon himself, and his family paid over $450,000 in taxes because of his errors.

To be better prepared than Prince and Chief Justice Burger, seek out the assistance of an attorney or a CPA to draft a will and do estate planning, respectively. An attorney will help you navigate a will, and a CPA is best positioned to help with more complicated estate planning.

For more information on estate planning basics, 360 Degrees of Financial Literacy offers the following articles and Q&A: