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Exam Code: CFSA Practice test 2022 by team
CFSA Certified Financial Services Auditor (IIA-CFSA)

Certified Financial Services Auditor® (CFSA®) test Syllabus
The CFSA test tests a candidate's knowledge of current auditing practices and understanding of internal audit issues, risks, and remedies in the financial services industry.

The test consists of 115 multiple-choice questions.
The testing period is two hours and fifty-five minutes.
Exam questions are all multiple-choice (objective) with four answer choices.
80% of the test covers four domains: Financial Services Auditing, Auditing Financial Services Products, Auditing Financial Service Processes, and The Regulatory Environment.
The remaining 20% relate to the candidates' chosen discipline and will be at the proficiency level.
CFSA candidates may choose any one of the three disciplines as part of their CFSA test test.
Candidates may not choose to be tested on more than one discipline.
The CFSA designation does not distinguish one chosen discipline from another.

The CFSA test core content covers four domains:

Domain I: Financial Services Auditing (25-35%)
Domain II: Auditing Financial Services Products (25-35%)
Domain III: Auditing Financial Service Processes (25-35%)
Domain IV: The Regulatory Environment (10-20%)

CFSA test Individual Disciplines
Banking: Products, Processes, and the Regulatory Environment (20% — Proficiency Level)
Insurance: Products, Processes, and the Regulatory Environment (20% — Proficiency Level)
Securities: Products, Processes, and the Regulatory Environment (20% — Proficiency Level)

Financial Services Auditing (25-35%)
(P) = Candidates must exhibit proficiency (thorough understanding, ability to apply concepts) in these subject areas.
(A) = Candidates must exhibit awareness (knowledge of terminology and fundamentals) in these subject areas.
A. IIA International Professional Practices Framework (P)
B. Internal Control/Risk Management/Governance (P)
Internal Control Frameworks
Risk Management Frameworks
Governance Models
C. Audit Process (P)
Audit Planning
Audit Fieldwork
Risk Assessment
Analytical Review
Data Gathering and Evaluation
Tools and Techniques (e.g., CAAT)
Audit Communications
Monitoring Outcomes
D. Implications of Information Technology (P)
E. Auditing Financial Statement Elements (P)
Balance Sheet
Statement of Cash Flows
Income/Expense Statement
Off Balance-sheet Items
Auditing Financial Services Products (25-35%)
(P) = Candidates must exhibit proficiency (thorough understanding, ability to apply concepts) in these subject areas.
(A) = Candidates must exhibit awareness (knowledge of terminology and fundamentals) in these subject areas.
A. Lending/Loans (A)
B. Deposits (A)
C. Trusts (A)
D. Annuities (A)
E. Derivatives (A)
F. Electronic Services (A)
G. Cash Management Services (A)
H. Stocks (A)
I. Bonds (A)
J. Commodities (A)
K. Mutual Funds (A)
L. Employee Benefits (A)
M. Capital Market Products (A)
N. Securities Lending (A)
O. Insurance Policies (A)
P. Insurance Products (A)
Q. Foreign Exchange (A)
R. Asset Management (A)
S. Money Market Products (A)
Auditing Financial Service Processes (25-35%)
(P) = Candidates must exhibit proficiency (thorough understanding, ability to apply concepts) in these subject areas.
(A) = Candidates must exhibit awareness (knowledge of terminology and fundamentals) in these subject areas.
A. Risk Management (A)
Asset/Liability Management
Trading Market Risk
Credit, Liquidity, Operational Risk
Allowance for Loan and Lease Losses
B. Underwriting (A)
Private Placement
Initial Public Offerings
C. Securitizations (A)
D. Treasury Operations (e.g., Cash Management) (A)
E. Back-office Operations (A)
F. Marketing Sales and Distribution (e.g., Insurance Agencies, Bank Branches, Brokers) (A)
G. Claims (A)
H. Investments (A)
I. Broker/Dealer Activities (A)
J. Rating Advisory Service (A)
K. Mergers and Acquisitions (A)
L. Loan Operations (e.g., Collateral Issues, Perfecting Liens) (A)
The Regulatory Environment (10-20%)
(P) = Candidates must exhibit proficiency (thorough understanding, ability to apply concepts) in these subject areas.
(A) = Candidates must exhibit awareness (knowledge of terminology and fundamentals) in these subject areas.
A. Overview of the Regulatory Environment (A)
Function of Central Bank
Function of Insurance Regulators
Function of Securities Regulators
B. Laws and Regulations (A)
Equal Credit Opportunity/Antidiscrimination
Home Mortgage Disclosure
Reserve Requirements
Insider Transactions
Lending Disclosure
Deposits Disclosure
Real Estate Sales Disclosure
Self-assessment of Internal Controls/Risk Management
Investor/Depositor Protection
Financial and Personal Information Privacy
Anti-Money Laundering
C. Stock Exchanges and Other Markets (A)
D. Money and Banking (A)
Role of Money and Banking
Bond and Stock Markets
Effect of Interest Rate Movements
Monetary Management Theories

Certified Financial Services Auditor (IIA-CFSA)
Financial (IIA-CFSA) test plan
Killexams : Financial (IIA-CFSA) test plan - BingNews Search results Killexams : Financial (IIA-CFSA) test plan - BingNews Killexams : What Is Financial Planning and Why Should I Create a Plan? No result found, try new keyword!What is financial planning and why should I create a plan? Investopedia Editor-in-Chief Caleb Silver joins Jill Malandrino on Nasdaq TradeTalks for National Financial Planning Month. Sign up for ... Mon, 03 Oct 2022 08:43:00 -0500 text/html Killexams : Financial Challenges Prevent Saving for Retirement

Many U.S. workers must grapple with a “financial vortex” of challenges blunting their retirement savings, research shows.

The Goldman Sachs Asset Management Retirement Survey and Report finds that every generation of respondents—Gen Z, Millennials, Gen X and Baby Boomers—face significant effects, from competing financial priorities to life events, that distract from the ability of many to save for retirement. The data shows that 53% of Baby Boomers and 51% of Gen X respondents say they are behind in saving for retirement.

“The financial vortex is the new reality for retirement savers today,” says Mike Moran, senior pension strategist at Goldman Sachs Asset Management, in a press release. “Some challenges are common life events, such as buying a home or starting a family, but market volatility and high inflation are beyond individual control.”

Data shows that among younger workers, 34% of Millennials and 27% of Gen Z individuals say they are behind schedule in their retirement savings. Across generations, the respondents that say they are on track, are 31% of Baby Boomers, 23% of Gen X, 23% of Millennials and 34% of Gen Z, the data shows.  

The report also finds across generations, 14% of Baby Boomers say they are somewhat or ahead of schedule for retirement savings; Gen X, 22%; Millennials, 41%; and Gen Z, 38%.  

Particularly for young workers—with many years ahead to save and invest for retirement—there is time to course correct if they act now, adds Moran.   

“The longer an investor remains off-track, the larger the adjustments may need to be to fully course correct,” he says. “But more likely, we believe some will retire with insufficient savings and need to adjust their retirement lifestyle and expectations accordingly.”

The financial vortex of challenges also includes credit card debt, loans, saving for college, caring for and financial support for family members, time out of the workforce, financial hardship and monthly expenses, according to the report.

The report finds across generations workers are most acutely affected in their ability to save for retirement because of excessive monthly expenses: for Gen Z 82%, Millennials 84%, Gen X 72% and Boomers 56%.

The data shows caring for and financially supporting family members is affecting saving for retirement for 75% of Gen Z, 79% of Millennials, 63% of Gen X and 38% of Baby Boomers; while credit card debt is affecting 58% of Gen Z, 71% of Millennials, 55% of Gen X and 40% of Baby Boomers.

“Family responsibilities have forced ‘the sandwich generation’– those balancing caring for their aging parents and their own children—to deprioritize their long-term financial well-being, potentially impacting their retirement savings,” says Joe Duran, head of Goldman Sachs personal financial management. “When assuming the role of caregiver, we believe it’s important to remember that it may not have to come at the cost of your retirement goals. Having a comprehensive financial plan can alleviate the stress that comes with juggling your career, parenting obligations, and caring for an aging loved one, giving you the space and confidence to save toward a meaningful retirement and attain peace of mind.”

During the COVID-19 pandemic, 14% of working Baby Boomers, 25% of Gen X, 33% of Millennials and 32% of Gen Z respondents withdrew funds from their 401(k) plan to cover expenses and, across generations, 37% of working respondents expect the effects of the pandemic to delay their retirement, the report finds.   

The survey was conducted by Goldman Sachs Asset Management and Qualtrics Experience Management among 1,566 U.S. participants between July and August. Participants included 967 working individuals across generations.

Thu, 13 Oct 2022 10:03:00 -0500 en text/html
Killexams : Eight essential components of your financial plan

And how they interlace together to achieve a robust strategy for wealth creation and protection.

From our experience, those who have a financial plan in place are more likely to save consistently towards retirement, pay their bills on time each month and live a comfortable lifestyle. With it being Financial Planning Week, we explore what is involved in developing a financial plan, the various components of a plan, and how they interlace together to achieve a robust strategy for wealth creation and protection.

1. Your lifestyle goals

Identifying the goals that you have for your life is the first step in the process as these goals will form the foundation on which your financial plan is built. Recognising that life is not necessarily linear and that goals change over time, the aim is to create a plan that is sufficiently adept to help you achieve your goals but adequately malleable to adapt to your changing needs. When setting your goals, it helps to be as specific as possible and to attach monetary values and time frames to each goal. Not only will this help in calculating and developing appropriate solutions but will help you measure your progress when reviewing your plan. While it’s always a good idea to separate your short, medium and long-term goals, it’s just as important to rank them in terms of priority as this will provide you guidance in terms of which goals to start attacking first. Don’t be afraid to be audacious when writing out your goals.

Food for thought: ‘The goal isn’t more money. The goal is living life on your terms.’ (Chris Brogan) 

2. Balance sheet

Taking stock of your net worth is an important next step, but don’t be put off by the calculations. Wealth building is generally a slow, deliberate process that takes decades to achieve, and you have to start somewhere. Make a list of all your assets including bank accounts, investments, property, business shares, vehicles and other immovable property, and then subtract your debt, including your home loan, credit and retail debt, and student and personal loans. Be sure to record the applicable repayment terms and interest rates attached to each debt as this information will benefit you when structuring an optimal debt repayment plan. Consider your current net worth as the starting point of your wealth creation strategy. Remember, if you’re just starting out your investment journey, it is perfectly normal to have high levels of debt in place such as a bond and/or student loan. Leveraging this debt and paying it off strategically will form part of the financial planning process, so stay positive.

Food for thought: ‘Money is something we choose to trade our life energy for.’ (Vicki Robin)

 3. Cashflow management

Wealth is what you don’t spend which means that formulating a budget is critical to ensure that there’s sufficient room for saving and investing. While regular expenses should be relatively easy to deal with, spend time understanding how your irregular expenditure fits into your budget. These expenses could include vehicle repairs not covered by insurance, out-of-pocket medical expenses, or vet bills. Keep in mind that your budget will need to be sufficiently robust to absorb eventualities such as petrol price increases, interest rate hikes and energy price increases. Careful scenario planning is an effective way of stress-testing your budget to ensure that it is resilient enough to withstand life’s curveballs. Finding room in your budget to save may require some ruthless number-crunching and serious contemplation around what falls within the definition of ‘must-have’.

Food for thought: ‘Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can provide money back and have money to invest. You can’t win until you do this.’ (Dave Ramsey)

4. Debt management

Not all debt is bad, so don’t be overwhelmed by your debt. Good debt, such as a home loan, can be used as leverage to build equity in your property and ultimately increase your net worth, so it’s important to take a strategic view of this type of debt. This type of debt can also Improve your credit score. If you have high-interest debt such as credit card or retail debt, put a debt elimination plan in place to ensure that you can settle this debt as quickly as possible without compromising other important priorities such as paying your medical aid premiums, building an emergency fund and protecting your income. Remember, structuring your debt repayment plan is a strategic exercise that involves finding the balance between reducing your high-interest debt, maintaining a good credit score, protecting your risk exposure while at the same time covering your living costs and maintaining an adequate standard of living. There’s no point channelling every spare penny towards paying off debt but in the process neglecting your medical aid premiums, maintaining an unhealthy diet, and cancelling your life cover. Although your debt may be paid off quicker, you’ll end up in a worse financial situation as a result.

Food for thought: ‘Debt is the slavery of the free.’ (Publilius Syrus) 

5.Emergency funding

One of the most important functions of an emergency fund is to prevent you from having to access debt to pay for high-cost, unforeseeable expenses. Short-term debt such as credit card debt is expensive and will result in you paying back significantly more than you borrowed to pay for the emergency which, in turn, will only set you back financially. Commit yourself to building an adequate emergency fund that is appropriate for your particular set of circumstances. Again, use scenario planning techniques to identify the possible expenses you could be faced with such as an injured pet, the insurance excess on a burst geyser, or car tyre repairs. Consider also your job security, whether you have an alternate source of income, and the living costs you would need to provide for in the event of retrenchment. There is no right answer when it comes to how much you should keep in an emergency fund, but a useful guideline is to keep enough set aside that will allow you to sleep at night. An emergency fund is your peace of mind in times of crisis.

Food for thought: ‘Save three-to-six months of expenses in a ‘rainy day’ fund. Know why? Cause it is going to rain, and you aren’t the exception.’ (Dave Ramsey)

6. Risk protection

While long-term insurance is more affordable when you are younger (and likely healthier), the irony is that you’re least likely to be able to afford it when you’re starting out your career. That said, mitigating against the risk of death, disability and/or severe illness is a responsibility all of us face, and it’s important to put adequate cover in place depending, of course, on your affordability. If you have financed your home, you will need to ensure that you have sufficient bond cover in place keeping in mind that this cover can be reduced as you pay off your home loan. Securing an income protection benefit is critical to ensure that you can continue earning an income should an accident or illness leave you unable to earn an income, whether temporarily or permanently. Without this type of cover, you may find yourself financially dependent on a spouse or family member for the rest of your life, which is an enormous burden for anyone to take on. If you have any form of debt and/or have loved ones who are financially dependent on you in any way, it is vital that you have enough life cover to pay for these expenses should you pass away. A well-structured risk management plan should analyse the cover you currently have in place, identify the areas of exposure, and design cost-effective solutions to mitigate those risks. Remember, medical aid and gap cover are risk management solutions designed to protect against ill-health and/or hospitalisation, so make these a priority.

Food for thought: ‘A man who dies without adequate life insurance should have to come back and see the mess he created.’ (Will Rogers)

7. Investment planning

There is no quick way to build wealth. Time, compound interest and consistency – used strategically – are the best weapons available to grow your net worth. Besides being a highly technical and regulated area of financial planning, investment planning involves a number of moving parts that all need to work together to achieve optimal results. Estate structuring, tax planning, risk management, portfolio construction and behavioural finance are just some of the components of an investment plan and we recommend that you seek advice from an investment expert. Investing to achieve your lifestyle goals is so much more than chasing the highest investment returns possible. Your investment portfolio should essentially be a comfortable blend of investment risk, appropriate returns, strategic asset allocation and tax-efficient structuring to ensure that you can not only reach your goals but can stay composed over the long term in the face of short-term market volatility. In addition, how you are invested should be consistent with your value system and your worldview.

Food for thought: ‘Being rich is having money; being wealthy is having time.’ (Margaret Bonnano)

8. Estate planning

Although death is inevitable, the timing of one’s death is unknowable and, as such, an estate plan is designed to ensure that your worldly possessions are appropriately dealt with upon your death. A well-structured estate plan should leave your loved ones clear as to your intentions and adequately provided for after your death. Your estate plan should therefore be designed to ensure that your estate is solvent, and liquid and that your loved ones have the financial means to cover their living costs for a period of up to two years while your estate is being administered. Besides ensuring that your wll and other testamentary writings are correctly drafted and legally valid, an estate plan could include any number of tools such as life cover, retirement funds, living annuities, trusts and business policies to achieve your goals and ensure the smooth transfer of your assets.

Food for thought: ‘Estate planning is an important and everlasting gift you can provide your family. And setting up a smooth inheritance isn’t as hard as you might think.’ (Suze Orman)

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Thu, 06 Oct 2022 01:09:00 -0500 en text/html
Killexams : “Why do I need a financial plan?”

If a financial planner doesn’t have your cash flow information, then the approach turns to answering the question: “Can I live on $80,000 a year indexed after tax in retirement?” And that, in turn, reduces a lifestyle plan to a simple retirement assessment, and all of the “thinking” shifts to the financial planner’s area of expertise, leaving you out. It is important that you discuss and model the trips you want to take, the vehicles you want to own, the donations you want to make, and all the rest, to see the impacts on your future. 

What if you find you haven’t saved enough and $80,000 a year doesn’t work for you? You could then see if $70,000 a year works; if it does great, problem solved. But what did you provide up to make it work—travel? Recreational activities? This is why it’s so important to look at the whole picture for your finances.

Keep in mind that the savings required to provide $80,000 a year in retirement income to age 95 is a lot more than is required for $80,000 a year of income to start, then decreasing as you age and slow your travel, vehicle purchases, sell your home, move to an apartment and so on.

Including the cash flow details in your financial plan and imagining how they may change over time are what keep you involved and thinking about your current situation and your future. And it’s that thinking that will lead you to your biggest insights.

A colleague of mine often says: “If it’s not a cash-flow plan, it’s not a plan.”

Reviewing your financial planning model annually, making adjustments and checking assumptions, builds your confidence in the model and its outcomes, giving you more and more financial clarity, leading ultimately to financial freedom.

Finally, Tom, there is no point in doing a financial plan if you’re not going to act on some or all of the solutions you arrive at.

Now, do you need a plan? I don’t know. If nothing here resonates with you and you’re confident with your registered retirement savings plan (RRSP), then maybe not. If you’re not sure, contact a financial planner for an initial consultation which is often offered at their own expense. During that time, they’ll confirm if they can help, and you’ll assess their approach to see if it fits your needs.

Wed, 05 Oct 2022 12:00:00 -0500 en-US text/html
Killexams : Participant Data is Key to Developing Better Financial Wellness Programs

In an increasingly digital age, most 401(k) participants are either “comfortable” or “very comfortable” providing many distinct personal data points to their plan providers, according to a new report from Cerulli.

Individuals are willing to turn over their personal information to service and platform providers, as long as that data is being used to personalize their investment advice and financial wellness experience, according to Cerulli’s “U.S. Asset and Wealth Management” report. Without a holistic view of a participant’s financial situation, financial wellness experiences can feel generic and less relevant to the end user’s circumstances.

Plan providers are leveraging this data to construct a more detailed financial profile for individual participants on their platforms, delivering more personalized in-plan financial wellness, coaching, and portfolio management experiences, the report states. This has also helped plan advisers create more informed plan design recommendations for their plan sponsor clients and allowed for providers to anticipate and address their participants’ broader financial needs.

Participants are sharing more personal data about themselves and are more likely to turn to financial professionals above other sources of investing information and advice except for “myself” or a spouse/partner, with use of financial professionals up to 71% in 2021 vs. 68% in 2010, according to a Hearts & Wallets report. Use of paid financial professionals is now at 47%. Use of “other” types of financial professionals is at 64% today, including phone-based mutual fund companies or online brokerage representatives, accountants, bank representatives and insurance representatives.

Participants are either “comfortable” or “very comfortable” sharing information on their gender (91%), race or ethnicity (88%), household income (85%), expected retirement age (82%), family structure (83%), retirement savings/account balances (75%) and non-retirement savings/account balances (70%), the report states. They have also shared data, though sometimes less often, on credit card debt, weight/body mass index, smoking status, chronic health conditions and student loan debt.

Plan advisers and sponsors dedicate significant resources to helping participants address their financial situations more holistically and solve their “next dollar” problems, the report states. The vast majority (94%) of recordkeepers offer a financial wellness program, whether a proprietary program, a third-party program, or a combination. Yet there are no universal criteria for what constitutes a financial wellness program, and the structure and efficacy of these programs can differ from one provider to another.

While some providers offer data-driven, interactive, user-friendly programs that allow participants to make informed decisions in a holistic context, others offer more fragmented solutions, the report states. Holistic, user-friendly financial guidance and advice engagements not only enhance the competitive positioning recordkeepers offer to plan sponsors, but also help providers gain a deeper understanding of the participants on their platform, deliver more meaningful, impactful engagements, and proactively anticipate the needs of investors.

According to Hearts & Wallets, 65% of households in 2021 say they want to make decisions and manage money on their own with the preference to delegate dropping to 12% in 2021 from 20% in 2010. There is a bit of a disconnect, however, with 60% of households who prefer self-direction using some type of financial professional. An increasing number of Americans rely on multiple information sources, with 43% of households using seven or more sources today, nearly triple the 14% of households in 2010.

Cerulli suggests providers use participant data to create messaging, schedule touchpoints and deliver engagement that resonates with participants. Providers can leverage complete participant profiles by making participants aware of investment products, savings accounts, individual retirement accounts and other services that are more likely to address their needs at that point in time. An example could be recordkeepers or advisers targeting high-balance participants nearing retirement as a potential fit for their wealth management business.

Cerulli recommends recordkeepers use participant engagements, both virtual and phone-based, as opportunities to flesh out participant profiles. Within this context, providers can ask thoughtful questions about participants’ financial concerns, goals, and recent life changes to update their existing participant profiles.

Having this much personal data could lead to misuse and comes with considerable risk, the report warns. Some sponsors have expressed concerns with how recordkeepers and other plan providers use their participant’s sensitive personal information, with several recordkeepers accused of inappropriately cross-selling participant data. Defined contribution plans are also seen as attractive targets for cybercriminals.

Tue, 04 Oct 2022 10:04:00 -0500 en text/html
Killexams : A financial plan for your pet

In the eyes of the law, pets are considered personal property. But to their owners they often mean more than a sofa or chair—they are best friends, companions, and even family. The estate planning process presents an opportunity to address ongoing pet care. “Sadly, the opportunity is often overlooked and a considerable number of domestic pets suffer because their owners did not know and were not advised to make arrangements for them,” says Christine Kolm, Senior Wealth Strategist with the UBS Advanced Planning Group. “Knowing that pets usually have shorter lifespans than humans means that we tend to plan for our animals’ passing prior to our own. But, that is not always the case. Responsible pet owners may want to ensure that non-human family members will continue to receive ongoing care and feeding.”

Informal arrangements

Begin with a list of expectations regarding a pet’s ongoing care. Such a list, possibly in writing, is the beginning of a plan for the care of a pet in the event of unanticipated absence, incapacity, or death.

Formal, legally enforceable agreements, can take time to discover, verify and implement. As a result, the importance of making a list of informal arrangements for temporary caregiving cannot be overemphasized.

Find two or more responsible friends or relatives who agree to serve as temporary emergency caregivers in the event that something unexpected happens to you. Provide them with keys to your home; feeding and care instructions; the name of your veterinarian; and information about the permanent care provisions you have made for your pet.

Look into documenting this informal arrangement by writing it down to memorialize all parties’ understanding. However, since these informal arrangements are generally legally unenforceable agreements made with family members or friends, you are relying entirely upon the integrity of the person or organization chosen. It is important to choose wisely!

Formal arrangements

A comprehensive plan for pets also includes formal (or legally enforceable) arrangements that specifically cover pet care.


Wills are legal documents that provide directions to a probate court regarding a decedent’s wishes. The will nominates an executor or personal representative and provides direction regarding property distribution. The real time of the typical probate administration is relatively short … maybe a year or two. The belief that pets can be adequately protected if they are merely mentioned in a will is incorrect. Consider the following pitfalls of planning for pets with merely a will:

  • Wills are typically neither accessible nor enacted immediately. There will be a waiting period before the will is located, filed and verified. It can then be many months before the property actually changes hands. Clearly, additional arrangements must be made for pet care while the will is probated.
  • Wills do not allow disbursement over a pet’s lifetime. In a will, the owner cannot distribute funds over time, which can be achieved with a free-standing traditional pet trust or pet protection agreement. Such a trust can be created by a will, but such ongoing arrangements must be included at the time the will is drafted.
  • Changes to the will are in the court’s discretion. Who do you want deciding the fate of your pets: you or a judge?
  • Wills are effective and enforceable only upon death. They make no provisions for incapacity. A will cannot address the possibility that the pet may need to be cared for during the owner’s lifetime.
  • General provisions in a will loosely linking a monetary gift with the gift of a pet may be treated as “honorary.” The person who receives the funds is responsible for deciding whether or not to use them for the pet’s care. There is nothing to prohibit the recipient from leaving the pet at the pound and using the money for other things.

The presence of these limitations does not mean that wills should not include provisions for pets. Rather, it means that such provisions should be supplemented by a pet trust and/or pet protection agreement.

Pet trusts

Pet trusts stipulate that in the event of a grantor’s disability or death, a trustee will hold property (cash, for example) “in trust” for the benefit of the grantor’s pets. The “grantor” (also called a settlor or trustor in some states) is the person who creates the trust, which may take effect during a person’s lifetime or at death. Payments to a designated caregiver are made on a regular basis.

State law determines the trust’s term limits. These trusts usually continue for the life of the pet or 21 years, whichever occurs first. Some states allow a pet trust to continue for the life of the pet, without regard to a maximum duration of 21 years. This is particularly advantageous for companion animals which have longer life expectancies than cats and dogs, such as horses and parrots.

All 50 states and the District of Columbia recognize statutory pet trusts. In these jurisdictions, pet owners who merely include a simple directive in their will (e.g., “I leave my dog Bebe and $5,000 for her care to my friend Dee”) can have some assurance that the funds and pet will remain together.

Unlike a simple directive in a will, a pet trust provides a host of additional protections and advantages:

  • Pet trusts are valid during a pet owner’s life and after their death.
  • Pet trusts may help to prevent a contest to the estate—for example, if the amount left for the pet’s care is enough that someone will contest the client’s capacity, or if there is a litigious family member whom the pet owner believes may dispute the final documents.
  • Pet trusts and pet protection agreements not only provide for the succession of ownership of a pet but also are ongoing and control the disbursement of funds.
  • Pet trusts allow for the division and assignment of trustee duties. An investment trustee (separate from the pet guardian or trustee) can be appointed to invest funds with a view toward growth of the principal and future use on behalf of the pet, heirs, and charitable recipients.

Pet trusts and pet protection agreements allow provisions for an owner’s incapacity. Pet trusts and pet protection agreements can help ensure that the owner and pets will remain together in the event that the owner moves to a nursing home or other long-term care facility. With a pet trust or pet protection agreement, owners may even leave a portion of the funds remaining after the pet’s death to the facilities that kept the owner and pet together.

Limited durable power of attorney

A limited durable power of attorney can be used to designate someone to make decisions regarding the care of your pet should you become unable to do so. This person will only have the ability to make decisions about your pet during your lifetime. Consequently, you still need to consider a permanent arrangement for your pet’s future care.

To learn more about planning for the care of your pets, reach out to your financial advisor and ask for a copy of the Advanced Planning Group’s whitepaper “Planning for Pets.”

Tue, 11 Oct 2022 10:48:00 -0500 en text/html
Killexams : Best Life Insurance Companies Of October 2022

There are two primary types of life insurance: term life and permanent life.

Term Life Insurance

Term life insurance is a policy where you choose the length of coverage, such as 10, 15, 20 or 30 years. If you die within that term, your beneficiary will receive the death benefit. If you outlive the term and don’t renew the policy (at a higher cost), there is no death benefit.

Term life insurance is good for folks who want to cover a specific financial concern, such as income replacement during your working years.

Permanent Life Insurance

Permanent life insurance is good for folks who want a death benefit paid out no matter when they pass away. Permanent life insurance policies also have a cash value component that can accumulate money on a tax-deferred basis. Permanent life insurance is usually significantly more expensive than term life.

People who choose permanent life insurance usually have specific goals in mind, such as supporting financial dependents, funding a trust for heirs, or building cash value to supplement retirement savings.

Permanent life insurance can be broken down into main subtypes:

Whole life insurance

Whole life insurance is predictable because the premiums, rate of cash value growth and amount of the death benefit are fixed and guaranteed.

Universal life insurance

This type offers more flexibility and you may be able to adjust premium payments and death benefits within certain parameters. The cash value growth will depend on the insurer and the performance of the invested assets that are underlying the policy. Types of universal life insurance are fixed-rate universal, guaranteed universal, indexed universal or variable universal.

Permanent life insurance policies can be difficult to understand from quotes or hypothetical illustrations. Simply comparing life insurance quotes or some projection of cash values won’t reveal whether the policy is a good value. “Look under the hood,” advises Flagg of Veralytic. For example, a life insurance agent or financial advisor can request a Veralytic report to see how the policy you’re considering compares to industry benchmarks.

“Ultimately, the premium you’ll have to pay and/or the cash value growth you’ll see depends on what the insurer actually charges and how well the investments do. You want to confirm that internal policy costs are competitive and that the investments within the policy fit your risk tolerance,” cautions Flagg.

Variable life insurance

Variable life insurance offers flexibility not found in whole life insurance, but with a safety net so your death benefit can’t drop below a certain amount.

That flexibility includes deciding on where to invest your cash value. The investments you choose play a vital role in the success of your policy, which makes this an option if you want to play an active role in your life insurance. Unlike a variable universal policy, a variable life insurance policy offers a safety net so that your death benefit won’t fall under a specific dollar figure.

A variable life insurance policy doesn’t let you change your premiums, which also makes it unlike variable universal life.

Similar to other types of permanent life insurance, a variable life policy offers cash value, which you can tap into while you’re alive. You need to make sure your policy maintains at least a minimal level of cash value or your policy could lapse.

No-Exam Life Insurance

Life insurance companies sometimes offer policies without a life insurance medical exam. These no-exam life insurance policies don’t require an test but you may be asked to answer health-related questions.

Types of life insurance policies include:

  • Accelerated underwriting: Life insurance companies primarily use information from third-party sources and algorithms to set your rate. The insurance company will review your prescription drug history, criminal record and driving record to gauge your risk. With that information, the insurance company will set your life insurance rates.
  • Guaranteed issue life insurance: There’s no medical exam, no health questions asked and you can’t be turned down.
  • Simplified issue life insurance: There’s no medical exam, but you likely have to answer a handful of health questions.

Guaranteed issue and simplified issue policies can cost much more than policies that are fully underwritten, but they’re a way to get life insurance quickly and may be the only option for older people and those with health issues.

Other Types of Life Insurance

Other types of life insurance include:

  • Burial insurance: Also called funeral insurance or final expense insurance, a burial insurance policy typically has a small death benefit meant to pay off final expenses, such as $10,000. They are typically whole life insurance policies and will have a high cost for the amount of coverage.
  • Survivorship life insurance: A survivorship life insurance policy, also called second-to-die life insurance, offers coverage for a husband and wife. The death benefit isn’t paid out until both people die.
  • Mortgage life insurance: A mortgage life insurance policy pays off your mortgage if the policyholder dies. The payment goes directly to the mortgage lender.

Supplemental life insurance: Supplemental life insurance is a free or low-cost group policy that may be offered by an employer or group. If a supplemental policy is connected to an employer, you will likely lose that coverage if you quit or are terminated.

Sat, 15 Oct 2022 00:02:00 -0500 Amy Danise en-US text/html
Killexams : Council passes parks financial plan 

Subscriber content preview

October 4, 2022

SEATTLE — Last week, the Seattle City Council, acting as the Seattle Park District Board, passed the Seattle Park District 2023-2028 financial plan.

The financial plan will invest $118 million in 2023, $122 million in 2024, $127 million in 2025, $131 million in 2026, $137 million in 2027, and $143 million in 2028 “to keep parks clean, open, and accessible to all.”

. . .

Mon, 03 Oct 2022 19:00:00 -0500 en text/html
Killexams : Despite economic uncertainty, financial planners say stick with your plan
Mel Casey, senior portfolio manager for FBB Capital Partners, a financial planning firm in Bethesda. (Submitted photo)

Mel Casey, senior portfolio manager for FBB Capital Partners, a financial planning firm in Bethesda. (Submitted Photo)

Investing in the current economic climate – in the midst of soaring inflation, a plunging stock market, rising interest rates, a potential recession, a seemingly endless pandemic, a troubling war in Ukraine – seems to many to require a whole new playbook.

But experts beg to differ.

Interviews with a handful of local professional investors reveal surprising agreement on a more measured and steady approach. With minor exceptions, these experts recommended only minor changes to a person’s fundamental plan (assuming it is sound)  – in effect, riding out the current storm by following the same rules that underpin all wise investing.

“You can’t be surprised when we have these slowdowns and trying times,” said Mel Casey, senior portfolio manager for FBB Capital Partners, a financial planning firm in Bethesda.

You may have to tweak your plan, he said – invest more in essential consumer staples, health care and utilities rather than speculative, expensive stocks, for example. But by and large, you have to realize that the market will eventually turn around and the economy improve.

“I can’t tell you when that will happen, but it will,” Casey said. “History tell us that.”

“Stick to your plan,” agreed Robert G. Carpenter, president and CEO of Baltimore-Washington Financial Advisors, in Columbia, in an email response to questions.

“The urge to do something – anything – can be overwhelming,” Carpenter went on. “The problem is you often wind up making things worse, either by selling too low immediately after a market downturn and missing out on future gains, or by chasing performance after markets take off.”

He concluded: “Often, the best strategy is to do nothing. This is where having a plan really plays off.”

Carpenter also recommended keeping a sense of perspective  (even the current stock market declines have left investors in better shape than they were at the bottom of the financial crisis 13 years ago), not trying to “time the market” by getting in or out at the perfect time, and filtering out the noise of daily changes in the market.

“I can’t tell you how long an up or down market will last, no one can,” Carpenter wrote. “What I can tell you for certain is (following this advice) will increase the odds of reaching your long-term financial goals – and getting a better night’s sleep.”

Jen Logsdon, senior financial advisor with Wilmington Advisors at M&T Bank in Baltimore. (Submitted photo)

Jen Logsdon, senior financial adviser with Wilmington Advisors at M&T Bank in Baltimore. (Submitted Photo)

Jen Logsdon, a senior financial adviser with Wilmington Advisors at M&T Bank in Baltimore and a financial advisor for 22 years, said the wisest choice for investing in times like this might require some adjustments based on the person’s financial goals and current life stage.

Those interested mainly in more wealth could buy into equities and fixed-income markets at lower levels, she said. On the other hand, those who want to benefit from higher interest rates can take advantage of higher short-term rates.

Those approaching retirement and relying on their financial portfolio for a monthly income, meanwhile, have a tougher time, Logsdon said, and need to take into account the impact of inflation and perhaps reduce their spending. Some clients, she said, are putting off retirement or working part-time “until things improve.”

Logsdon also stressed the value of consulting an expert in uncertain economic times.

“People do get emotional when they see losses in their accounts, so it is important to widen the perspective,” she said. “Working with an adviser and following a financial plan can help during challenging times like these.”

Christina Snyder, a partner and wealth adviser with Jacob William Advisory, in Timonium, conceded these are worrisome times.

“Between tumultuous activity, inflation, and the Fed raising interest rates, it’s been a challenging year for many,” she said in an email response to questions. The tumult aside, she went on, “it is important to remember bear markets are a natural part of market cycles.  The stock market will have its good days and bad days.”

With that in mind, she added, “the best course of action is to stick with the long-term investment strategy that was developed to bring you the financial peace of mind you need. Focus on what you can control … on what matters most to you and where you can make the biggest impact today.”

Turbulent times do offer a good opportunity to review your existing plan and perhaps, she added, “ take advantage of an oversold market, whether that be through deployment of cash, rebalancing, tax loss harvesting, or Roth conversion benefiting the next generation.”

Jay Levin, a senior wealth adviser and managing director at MAI Capital Management, which has offices throughout the country (including Rockville, where he is based), said turbulent times such as these do not change the basic philosophy of his firm.

“We believe it’s always a good time to invest when clients have the money to invest,” he said. “One of our principles is we have an underlying confidence in our financial, political and economic institutions. … Principles are principles for a reason. They don’t change.”

Mon, 03 Oct 2022 07:46:00 -0500 Pete Pichaske en-US text/html
Killexams : Your Financial Future: Consider health care needs when choosing a Medicare plan

Open enrollment period for Medicare begins on Saturday, Oct. 15.

Along with political ads, every other ad on television these days is about choosing a health plan, and your mailbox is probably full of sales information. Every company claims to be your best choice. Many people get suggestions about their choices from friends and neighbors.

To find your best choice, you have to consider your own health situation. Probably the two most important considerations are who your doctors are and what medications you take. Every Medicare plan must offer doctors that practice every specialty. This means that there will be options for choices down the road. However, if you are already working with a doctor you trust and who understands your health conditions, you want to make sure your choice covers them.

Some plans offer a choice to every doctor who accepts Medicare. Others limit the new patients they accept who are on Medicare, so you may want to become a patient before going on Medicare. While this is an advantage, it may come with a higher cost.

Some policies come with a drug plan included and others require you to purchase a separate policy. Every plan can make changes from the year before. These changes can include which prescriptions are covered at what cost. This is known as the formulary. They contain different tiers of drugs at different prices. Generic are sometimes free. Often there is a second tier of preferred genetics. Name brands drugs have much higher prices.

Sometimes, the same drugs move to different tiers than the year before. I recently saw a price change for one drug that would cost $1,400 more this year than last year. This is why it is important to check these things every year. Once you start the new plan year on Jan. 1, the cost will be locked in for the rest of the year.

It is important to understand that most plans will have some out-of-pocket costs. There is also a donut hole for people with high prescription costs. During this time there are some reduced benefits. This was put into Medicare to try and help most people get some drug cost benefits, and people with more serious health conditions get more aid.

Some plans offer additional benefits such as eye care, dental and gym memberships. These Advantage plans often include drug coverage. Sometimes these policies are available at no cost. People often wonder how this can be possible. In Part C or Advantage plans, the government pays the insurance company to take over providing your insurance coverage. Current television ads highlight some benefits that most people do not receive such as increased Social Security benefits. Some of these extras might require that you be dual eligible, and because of your low income you might be covered by both Medicare and Medicaid.

To be on Medicare, you must pay a Part B premium that most people have taken out of the Social Security. The amount for next year will be announced later in October and take effect Jan. 1. Open enrollment ends on Dec. 7.

Review your options and make the best choice to try a minimize your out-of-pocket health care expenses.

Your Financial Future is written by certified financial planner Gary W. Boatman, MBA and CFP, who also wrote the book, “Your Financial Compass: Safe Passage Through The Turbulent Waters of Taxes, Income Planning and Market Volatility.” If there is an area that you would like to see discussed in the column, send your suggestions to

Wed, 12 Oct 2022 16:34:00 -0500 en text/html
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