Acknowledgments About the Book. Charles R. Chaffin, EdD, CFP Board About the Practice Questions About the Contributors

Transcription

1 Contents Acknowledgments About the Book Preface About the Practice Questions About the Contributors Part One xiii xv xvii xxiii xxv Introduction 1 1 Theory and Practice 5 2 Function, Purpose, and Regulation of Financial Institutions 15 Sonya L. Britt, PhD, CFP, Kansas State University 3 Financial Services Regulations and Requirements 25 Sonya L. Britt, PhD, CFP, Kansas State University 4 Consumer Protection Laws 35 John E. Grable, PhD, CFP, University of Georgia Sonya L. Britt, PhD, CFP, Kansas State University 5 Fiduciary 45 6 Financial Planning Process 51 Ronald A. Sages, PhD, AEP, CFP, CTFA, EA, Kansas State University 7 Financial Statements 63 COPYRIGHTED MATERIAL v

2 vi Contents 8 Cash Flow Management 73 9 Financing Strategies 81 Jorge Ruiz-Menjivar, University of Georgia 10 Economic Concepts Time Value of Money 97 Jorge Ruiz-Menjivar, University of Georgia 12 Client and Planner Attitudes, Values, Biases, and Behavioral Finance Principles of Communication and Counseling 115 Kristy L. Archuleta, PhD, LMFT, Kansas State University 14 Debt Management 127 Joseph W. Goetz, PhD, University of Georgia 15 Education Needs Analysis 137 Taylor Spangler, MS, University of Florida Sailesh Acharya, University of Florida 16 Education Savings Vehicles Financial Aid (Education) Gift and Income Tax Strategies (Education) Education Financing 165

3 Contents vii 20 Principles of Risk and Insurance Analysis and Evaluation of Risk Exposures Health Insurance and Health Care Cost Management Disability Income Insurance (Individual) Long-Term Care Insurance Annuities 213 John Gilliam, PhD, CFP, Texas Tech University 26 Life Insurance (Individual) Business Uses of Insurance 233 L. Ann Coulson, PhD, CFP, Kansas State University John Gilliam, PhD, CFP, Texas Tech University 28 Insurance Needs Analysis Insurance Policy and Company Selection Property and Casualty Insurance 263 Derek R. Lawson, MS, Sonas Financial Group, Inc. and Kansas State University Sarah D. Asebedo, MS, CFP, Virginia Tech 31 Characteristics, Uses, and Taxation of Investment Vehicles 275 Swarn Chatterjee, PhD, University of Georgia 32 Types of Investment Risk Quantitative Investment Concepts Measures of Investment Returns 299

4 viii Contents 35 Asset Allocation and Portfolio Diversification Bond and Stock Valuation Concepts Portfolio Development and Analysis Investment Strategies Alternative Investments 343 L. Michael Ladd, CFA, CAIA, CMT, CFP 40 Fundamental Tax Law Income Tax Fundamentals and Calculations Characteristics and Income Taxation of Business Entities 373 Webster Hewitt, CPA, CFP, University of Georgia 43 Income Taxation of Trusts and Estates Alternative Minimum Tax (AMT) 391 Webster Hewitt, CPA, CFP, University of Georgia 45 Tax Reduction and Management Techniques Tax Consequences of Property Transactions Passive Activity and At-Risk Rules Tax Implications of Special Circumstances Charitable/Philanthropic Contributions and Deductions 431 Webster Hewitt, CPA, CFP, University of Georgia 50 Retirement Needs Analysis 439

5 Contents ix 51 Social Security and Medicare 447 Sarah D. Asebedo, MS, CFP, Virginia Tech 52 Medicaid 463 Katie Seay, CFP, The Trust Company 53 Types of Retirement Plans Qualified Plan Rules and Options Other Tax-Advantaged Plans 485 Andrew Head, MA, CFP, Western Kentucky University 56 Regulatory Considerations Key Factors Affecting Plan Selection for Businesses Distribution Rules and Taxation Retirement Income and Distribution Strategies Business Succession Planning 515 Joseph W. Goetz, PhD, University of Georgia Kevin Valentino, MS, University of Georgia 61 Characteristics and Consequences of Property Titling Gifting Strategies Estate Planning Documents 541

6 x Contents 64 Estate Tax Compliance and Tax Calculation Sources for Estate Liquidity Types, Features, and Taxation of Trusts Marital Deduction Intra-Family and Other Business Transfer Techniques Postmortem Estate Planning Techniques Estate Planning for Non-Traditional Relationships 591 Supplement: CFP Board s Code of Ethics and Professional Responsibility 601 Part Two Introduction Establishing and Defining the Client-Planner Relationship Gathering Information Necessary to Fulfill the Engagement Analyzing and Evaluating the Client s Current Financial Status 625 Vickie Hampton, PhD, CFP, Texas Tech University 74 Developing Financial Planning Recommendations Communicating the Financial Planning Recommendations 653

7 Contents xi 76 Implementing the Financial Planning Recommendations 665 Ronald A. Sages, PhD, AEP, CFP, CTFA, EA Kansas State University 77 Monitoring the Financial Planning Recommendations 677 Part Three Introduction Gathering Data from Clients: Insights from Cognitive Task Analysis and Requirements Engineering 687 Kelly S. Steelman, PhD, Michigan Technological University Jason S. McCarley, PhD, Flinders University 79 The Need for Education 703 Joyce Schnur, CFP, MBA, ChFC, Kaplan University 80 Financial Planning Standards Board 709 Michael Snowdon, CFP, Financial Planning Standards Board 81 Behavioral Finance and Its Implications for Financial Advisors 737 Keith Redhead, PhD, Coventry University 82 Applications of Behavioral Economics in Personal Financial Planning 751 Swarn Chatterjee, PhD, University of Georgia Joseph W. Goetz, PhD, University of Georgia 83 Marriage and Family Therapy Applications to Financial Planning 763 Kristy L. Archuleta, PhD, LMFT, Kansas State University D. Bruce Ross III, MS, University of Georgia 84 Financial Therapy: The Integration of Financial Planning and Theory 779 Kristy L. Archuleta, PhD, LMFT, Kansas State University Bradley T. Klontz, PsyD, CFP, Kansas State University Sonya L. Britt, PhD, CFP, Kansas State University 85 Aging Clients: Special Considerations 795 Deanna L. Sharpe, PhD, CFP, University of Missouri

8 xii Contents 86 Accounting for Time: Important Distinctions and Concepts for Financial Planners 829 Robert Rodermund, MS, Lindenwood University 87 The Psychology of Decisions: A Short Tutorial 843 Jason S. McCarley, PhD, Flinders University Kelly S. Steelman, PhD, Michigan Technological University Conclusion 88 Moving Forward 861 Vickie Hampton, PhD, CFP, Texas Tech University Index 879