FPA of MN Newsletter – February 2017

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Preview: February Chapter Meeting

Submitted by Aaron Hasler - Programs Committee Director

The Programs Committee is thrilled to announce that Minneapolis Federal Reserve President and CEO Neel Kashkari will be speaking to us on February's Chapter Meeting. This presentation will include short prepared thoughts by Mr. Kashkari and then open to questions from the audience about the fed’s policy and plans, economic forecast, and any political or economic issues you are interested in asking. Think about what you want to know from Mr. Kashkari and email your questions to Aaron Hasler at the Programs Committee or bring your questions along and we will have microphone stations to ask your question.

In addition to Neel Kashkari we will have a presentation on “Why Minnesota Works for Investors” from Mairs & Power’s Mark Henneman. A local investment management company, Mark will tell us why Minnesota is unique, what opportunities there are for investments, and where the states economy will be going.
See you in February!

Looking for new ways to increase your engagement with FPA MN?

The Financial Education committee is looking for volunteers for our upcoming events!
Please email me directly if you're interested in any of these fun and rewarding opportunities

Host booth at STEM Expo - Thurs Feb 2 7:30am - 4pm
In coordination with Best Prep, we will have a booth at the STEM Expo with Time Value of Money activities
for 8th graders.
Shift 1: 7:30 - 9:30 am, Shift 2: 9:30 - 11:30 am, Shift 3: 11:30 am- 1:30 pm, Shift 4: 1:30 - 4 pm. Minneapolis Convention Center

Lead 1/1 sessions at the Healthy Life Expo - Sat Feb 4 10am-5pm
FPA is partnering with AARP and hosting a booth at the Healthy Life Expo at the Minneapolis Convention Center.

This events very similar to Financial Planning Day.
- CFPs: Lead 1/1 sessions with people looking for answers to questions from debt consolidation to how to invest.
- non-CFPs: be the first face attendees see and help schedule their 1/1's.
Shift 1: 10 - 1:30 pm, Shift 2: 1:30 - 5pm. *all day volunteers are welcome!

More opportunities will be coming shortly. If you have any further questions on details of these events, and to sign up, please email me at: volunteers@fpamnn.org.

Save the Date - Birdies for BestPrep February 11th

Birdies for BestPrep is coming up on Saturday, February 11th. Please register if you would like to join us for this fun evening. FPA of Minnesota is once again a sponsor at Birdies! We have a few passes available for our chapter volunteers; if interested in attending, reach out to Jason Kley.

Birdies for BestPrep is a fun, interactive evening to raise funds for BestPrep’s programs. Guests participate in a variety of activities including mini golf, a 200+ item silent auction, a raffle, and caricature drawings. A variety of fabulous food is served at themed food stations. Birdies is a great event to network and to have a terrific night out.

Volunteer Opportunity - Community Impact Liaison

The Pro Bono and Financial Education Committees would like to make FPA MN members aware of a new engagement opportunity.

The Community Impact Liaison role allows new and established members alike to make a noteworthy impact with a minimal, flexible time commitment. Individuals interested in gaining project management knowledge or sharpening their communication skills will benefit from the experience.

The ideal candidate should have exceptional organizational and communication skills. They should be comfortable using database/CRM software to create repeatable systems and processes, with a strong attention to detail. Ability to delegate and then follow-up on tasks to ensure they are completed in a timely manner is a must.

Primary responsibilities include:

  • Gathering and integrating data from FPA membership and committees regarding engagement interests and needs (quarterly)
  • Creating targeted email communications to inform FPA members of available engagement opportunities utilizing Vlogistics software (ad hoc)
  • Matching FPA members to community requests (2-4 per month) and follow-up with interested parties ensure the requests are addressed in a timely manner (ad hoc)
  • Tracking community impact/outcomes in centralized discussion on Basecamp to support chapter PR efforts (ad hoc)

While the tasks as are able to be delegated to other FPA members, the Community Impact Liaison will ultimately be responsible for ensuring all tasks have been completed in a timely manner.

After an initial onboarding period, the monthly time commitment is expected to be 1-2 hours and the commitment will run through the end of the calendar year. After that time, the current Community Impact Liaison is able to continue in their role or train a successor for the following year.

If interested or to obtain more information, please contact Tiffany Walker at twalker@wfgweb.com or 612-347-7971.

Save the Date - FPAMN K’Nex - March 29th, 2017

FPAMN K'Nex hosted by NexGen: Wonder Woman in the Workplace: The ROI for Cultivating Confidence & Taking Risks with Presenter Betsy Koepke of Betsy Koepke Coaching

Tailored to provide women with the mindset that they need in order to rise up, step into their own power, find their voice, and remain balanced and true to their values in the process. Feminine gifts and talents are fast becoming the most valuable commodity on the planet and this workshop is designed to teach women how to live their light, pursue their passions, and of course have fun while they are doing it!

During the workshop, participants will:

  • Learn How to Step Our Of Their Comfort Zone
  • Boost Confidence
  • Create a System for Work/Life Balance

All members and partners are invited to attend; networking before and after the workshop; light appetizers will be served

Time: 5 - 7:30 pm
Date: March 29th, 2017
Location: Coming Soon!

Professional Issues Committee rolls out new awareness campaign

The Professional Issues Committee started the year with a rollout of its new legislator awareness campaign. The goal of the campaign is to create a greater awareness of FPA MN by legislators via letters from FPA MN members to their own legislators. These initial letters serve to make legislators aware of the pro bono services that FPA MN offers to anyone who cannot afford a financial planner otherwise. The letters also offer the skills and expertise of the members of FPA MN to legislators looking for a better understanding of legislation that may impact the personal finances of Minnesotans or the financial planning industry.

The letter template can be easily downloaded by going to the blog site of Professional Issues Committee at www.FPAMNProissues.com where there is a link for downloading the template as MS Word document. Members should cut and paste the template onto their own letterhead. Members can add a personal note at the end if they know their legislator personally but it is not necessary. Any political or critical comment is not acceptable. There is also a link on the blog site for finding the mailing address of one’s legislator. Be sure to also include a business card with the letter.

The Professional Issues Committee would like to keep in touch with legislators a couple times per year and expects to send another letter in the summer or early fall. The Professional Issues Committee would appreciate every member taking a few minutes to help develop a positive relationship between FPA MN and legislators. It is better to build and maintain such a relationship before a need arises.

FINRA and SEC Examination Priorities

FINRA announced their exam priorities on January 4th for 2017. It probably isn't surprising that FINRA is very interested in how firms are supervising brokers that have a checkered past. Researchers reported in 2016 that certain firms have become havens for a large number of reps that have previously run afoul of FINRA rules. FINRA noted that protecting seniors from buying inappropriate investments remains a priority as well.

Interestingly, FINRA is going to initiate electronic, off-site reviews to supplement their traditional on-site cycle examinations. FINRA will be making targeted and limited information requests from firms that are not currently scheduled for a cycle exam in 2017. The information supplied will then be reviewed off site.

Below are many of the items mentioned in the annual letter.

  • Hiring, monitoring and supervisory controls of high-risk and recidivist brokers.
  • Firm controls of sales practices as they pertain to recommendations made to senior investors for speculative or complex products.
  • Firm monitoring of accounts for excess concentration in one product or type of risk.
  • Excessive and short-term trading of long-term products.
  • Firm programs to mitigate cybersecurity risks.

On January 12th, the SEC announced it's exam priorities for 2017. Probably the most interesting item is the SEC's interest in Electronic Investment Advice. They plan to look at advisors who are incorporating robo-advisory services to see how they are formulating investment recommendations, protecting client data, and marketing such services. The SEC's priorities mirror those of FINRA in their focus on protecting vulnerable seniors and seeing how firms are supervising reps with a "track record of misconduct".

The items cited in the SEC's annual letter include:

  • Supervision, marketing and data protection with respect to robo-advisory services.
  • Review of how advisors determine suitability of wrap fee programs for clients.
  • Review of suitability determination and sales practices related to ETFs with niche strategies.
  • Compliance oversight and controls of recidivist representatives.
  • Review whether conflicts of interest exist in the recommendation of certain share classes of mutual funds.

Get more media attention in 2017!

Have you thought about ways you can market yourself and your practice better in 2017? Why not go through FPA’s media training program this year and then take part in FPA MediaSource – the automated media query platform that is exclusively for CFP® professional members of FPA! We are pleased to announce that we have opened registration for four All-Member Virtual Media Training sessions this year. Now is your opportunity to amplify your voice and marketing, so register for one of the media training sessions today!

2017 M​edia Training

Thursday, March 16 from 3 to 4:30 pm CT​​

Thursday, June 15 from 3 to 4:30 pm CT

Thursday, September 14 from 3 to 4:30 pm CT​​

Thursday, December 14 from 3 to 4:30 pm CT​​

SYMPOSIUM SPEAKER - October 16, Mary Beth Franklin - 2016 tax returns determine 2018 Medicare premiums


Opening Keynote - Maximize Social Security & Minimize Medicare Premiums
Presentation Scheduled for Monday, 7:55-9:25 am
Anticipated CE: 1 CFP, 1 MN insurance, 1 WI insurance, 1 NASBA/CPE, 1 CIMA, .75 CLE Stnd

2016 tax returns determine 2018 Medicare premiums
High-income surcharge based on new brackets next year

As your older clients gather their financial documents to file their 2016 federal income taxes, they should pay close attention to the bottom line on their tax return. Their adjusted gross income in 2016, plus any tax-exempt interest income, will determine next year's Medicare premiums.

Many Medicare beneficiaries will be surprised to learn that some of the income brackets which determine Medicare premium surcharges for high-income retirees will change in 2018. Essentially, some higher-income seniors will shoulder a larger share of Medicare costs in 2018 even if their income remains at current levels.

Individuals whose modified adjusted gross income (MAGI), which includes tax-exempt interest, tops $85,000 and married couples whose joint income tops $170,000, pay higher premiums for both Medicare Part B, which covers doctor visits and out-patient services, and Medicare Part D, which covers prescription drugs costs.

There are five income tiers and if your MAGI exceeds an income bracket by just $1, you are catapulted into the next tier and will pay a higher surcharge. Medicare premiums are based on the latest available tax return, so 2018 premiums will be based on 2016 tax returns filed this year.

In 2017, most new enrollees in Medicare Part B pay a standard premium of $134 per month. So do existing Medicare beneficiaries who do not receive Social Security benefits. But most other retirees who have their Medicare Part B premiums deducted directly from their Social Security benefits pay less.

That's because a hold harmless provision in the Social Security Act protects most seniors from a net decline in benefits when Social Security annual cost-of-living adjustments are smaller than a scheduled increase in Medicare premiums. In most cases, any increase in Medicare premiums is limited to the dollar amount of the Social Security COLA. Because of the paltry 0.3% inflation adjustment in Social Security benefits for 2017, about 70% of beneficiaries who enrolled in Medicare before 2017 are protected by the hold harmless rule and will pay premiums ranging from about $110 to $126 per month this year.

But higher-income retirees pay more. In 2017, premiums that include high-income surcharges for Medicare Part B range from $187.50 to $428.60 per month. Rates are per person, so a retired couple would pay twice that amount. That means married couples whose income topped $428,000 in 2015 will pay more than $10,000 for Medicare Part B premiums alone in 2017.

Next year could be even more costly for some higher-income retirees as the income brackets that determine Medicare premium surcharges will be compressed.

The initial income threshold of $85,000 for individuals and $170,000 for married couples that triggers a premium surcharge will remain the same in 2018. So will the second income tier of $107,001 to $160,000 for individuals and $107,001 to $214,000 for married couples.

But tiers three and four will be compressed in 2018, meaning individuals with incomes between $133,500 and $214,000 in 2016 will be subject to higher premium surcharges in 2018 than they would be today. The same applies to married couples whose 2016 income was between $267,000 and $428,000 in 2016. They will pay higher Medicare premiums surcharges in 2018 than they would today at the same income level.

Individuals in the top tier with incomes above $214,000 and married couples with incomes above $428,000 would continue to pay the highest surcharge. That represents 80% of the per capita cost of the Medicare Parts B and D programs compared to a 25% cost share shouldered by those paying the standard Medicare premiums.

Medicare premiums are set each fall to take effect the following Jan. 1. Retirees can be subject to a Medicare premium surcharge if their income spikes for a variety of reasons such as large investment gains, sale of a vacation home, or converting a traditional retirement account to a Roth IRA. If their income later falls, future Medicare premiums may decline.

If a retiree's current income is lower than the most-recent tax return, they may be eligible to appeal a Medicare premium surcharge — but only if the income drop is the due to specific life-changing events such as death of a spouse, divorce, marriage or retirement. If that is the case, clients should immediately respond to the premium surcharge notice, known as an income-related monthly adjustment amount (IRMAA) letter they receive in the fall, and follow the instructions on how to appeal the surcharge.

(Questions about new Social Security rules? Find the answers in my new ebook.)

CFP® professionals are registering for FPA Retreat 2017

With limited availability, CFP® professionals are rushing to sign up for FPA Retreat 2017. This is the marquee event for CFP® professionals because only at Retreat can practitioners uncover, address, and intimately engage with some of the most challenging, relevant, and pressing issues in the profession today. Timely and relevant topics ranging from personal development and experiential-based growth, to elder care and abuse prevention—not to mention other converging trends that impact your clients. Register at www.FPARetreat.org.