Bob has been in the financial services profession for over 22 years, and has provided valuable input into our chapter. In 1999, he was the president of the local chapter of the International Association for Financial Planning (IAFP). In 2000, he was the inaugural chair of our chapter of the Financial Planning Association (FPA). He served as Programs Chair for both the IAFP, and more recently, for the FPA. In 2005, he was instrumental in bringing Victor Davis Hansen as a speaker, which was our best attended program ever.

In the late 90’s, Bob put together the Senior Faire, while he was the programs director with the IAFP. This was a joint project of the IAFP and Older Adult Social Services (OASIS). The initial program was held at Fresno Pacific University, and it later moved to Manchester Center with over 350 attendees and nearly 40 exhibitors.

Bob grew up in Fresno, and attended Manchester Elementary. Possibly one of your children has attended Manchester Gate. Back then it wasn’t known as “Gate”, but we suspect that Bob had something to do with its current distinction as an extraordinary educational facility. (Maybe it was like, “We will never let a kid like that into our school again”, and the bar was immediately raised.)

While he enjoys collecting fine wines, he delights even more in sharing them with friends.

In line with his outdoor interests, he is also a member of Fresno Wildlife Rehabilitation, a group dedicated to the care of orphaned or injured wildlife. Additionally, Tree Fresno, Valley Public Television and Friends of the Fresno County Library benefit from his membership and involvement.

His son Matthew completed his graduate work at U.C. Davis in 2005 and together with his wife Sybil has blessed Bob with 2 wonderful grandchildren. It is not unusual to find him playing “grandpa” at any number of local parks, playgrounds or ice cream parlors.

In our journey as financial planners, we walk through many life issues with our clients. Bob has first hand knowledge of elder care issues. He is a faithful son to his mother who requires some extra attention. Even before her health dipped a few years ago, he could be seentaking his mother out to breakfast nearly every Saturday morning. And now, this devoted son takes her to doctor visits, meals out, and many excursions about town.

Bob is a member of the Beechwood Advisory Group, where he is partners with John Longstaff, Mark Prendergast, Robert Rockwell, and Sean Borchardt.

Bob is a credit to our profession, and a valuable member to our chapter.

According to the September 2006 issue of the Capitol Update, the current federal activities in regards to securities issues follows:

Pension Protection Act Signed into Law. The comprehensive Pension Protection Act (PPA) was signed into law by President Bush late last month. The 907-page act -- approved in the Senate 93-5 on August 3rd -- represents a sweeping attempt to shore up defined-benefit plans and map new rules for 401(k) plans and IRAs. Its core provisions seek to close the $313 billion funding gap in the nation’s employer sponsored pension plans. FPA , allied with organizations including AARP, was unsuccessful in its effort to persuade Congress to retain ERISA’s long-standing conflict-of-interest provisions that restricted who may serve as a “fiduciary adviser” and reject a House-backed provision that allowed mutual funds, brokerage firms and insurance companies to advise workers about specific funds for their retirement accounts. In the end, a provision was adopted that will allow brokers, mutual fund firms and insurance companies to give personal investment advice provided they use an “objective computer model” that is “certified by an independent party.” FPA will be submitting comments to the Department of Labor in the rulemaking on this law.

In regards to federal tax issues:

Retirement Provisions Made Permanent in PPA. The new Pension Protection Act makes permanent several provisions in the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) that were slated to expire at the end of 2010. These provisions increase the limits for defined contribution accounts, IRAs, and catch up contributions. It also indexes the deductible IRA income limits and Roth IRA contribution limits after 2006. Another retirement savings tax credit made permanent was the non-refundable tax credit of up to $1,000 for eligible individuals who contribute to an IRA or an employer-sponsored retirement plan. The maximum credit is 50% of retirement contributions up to $2,000. The new act also simplifies the rules that allow workers to roll over amounts from one retirement account to another. Another provision requires the IRS to allow for a tax refund to be sent directly to the taxpayer's IRA. Please join us for a VLC series regarding the financial planning implications of the Pension Protection Act.

PPA Makes 529 College Savings Plan Tax Exemption Permanent. Section 529 college savings and prepaid plans became a permanent education tax benefit in the new Pension Protection Act. The new law allows for continued tax-free treatment of qualified withdrawals from 529 college savings plans that were set to expire in 2010. It also clarifies that the definition of a family member includes first cousins.
Caps on qualified room and board expenses have been broadened. In addition, 529 plans rollovers to a different state plan are allowed once a year without a beneficiary change. The PPA also allows for the coordination of the Hope Scholarship and Lifetime Learning credits with 529 plan distributions. It also gives investors the ability to invest in a 529 plan and Coverdell Education IRA for the same beneficiary in the same year.

Charitable Deduction Changes in PPA. Several significant changes to charities are included in PPA. One of the biggest changes is an IRA charitable rollover incentive that allows taxpayers who have reached 70 ½ to contribute up to $100,000 to a charity from an IRA without having to pay tax. This is effective immediately and is available for contributions made during 2006 and 2007. Split-interest gifts and gifts to donor-advised funds, supporting organizations, and private foundations do not qualify for the incentive. PPA also cracks down on several charitable abuses and imposes new charitable reform rules. Among the changes is an elimination of deductions for charitable donations for clothing or household items (e.g., furniture, furnishings, electronics, appliances, linens, and similar items) unless they are in good condition. The only exception is for donated single items that appraise for more than $500, but there is no deduction for any contribution of cash, check, or other monetary gift unless the donor can show a bank record or written communication from the charity indicating the amount, date, and name of the charity.

Mark your calendars now for 2:00 PM, Wednesday, November 8th, 2006. As before, our next Chapter meeting will be at Fort Washington Country Club -10272 N. Millbrook Ave., Fresno, California.

“How much can I withdraw from my portfolio and still be ok?” It’s one of the most important and complex questions a client can ask a financial planner.

The impact of applying systematic decision rules in the management of portfolio distributions has been one of financial planning’s hottest topics since 2004 when our speaker, Jonathan Guyton, CFP®, Principal of Cornerstone Wealth Advisors, Inc. in Minneapolis, published his award-winning research which established higher “safe” initial withdrawal rates than in previously published results.

In March 2006, along with computer scientist William Klinger, Guyton published a follow-up work in the Journal of Financial Planning, testing the 2004 conclusions across three different balanced portfolios utilizing Monte Carlo analysis. While validating the original findings, it also modifies the original Decision Rules and introduces two new ones which act as “guardrails” that support higher initial withdrawal rates and allow for purchasing power maintenance as well as confidence standards of 95 percent or better.

This session will review the foundations of these decision rules and how their utilization can enhance the work that financial planners do for clients in retirement.

On September 13th, Dave Yeske, CFP® and Elissa Buie, CFP®, gave us a wonderful presentation on Policy Based Financial Planning. They showed us how client decision-making can be aided and managed by instituting “policies” for their financial lives. These policies are not dictated by the advisor; rather they are developed through the discovery process, and used to help the client attain their lifetime goals. Dave and Elissa gave this presentation at the FPA Retreat (May 2006), and told us that they continue to tweak and improve it with the passage of time.

We have all seen clients damage their financial well-being by being undisciplined or by making emotional decisions. We have also seen extreme family friction caused by unilateral financial decision-making. Creating “financial policies” can open communication, as well as create a comfort zone and element of confidence in making financial decisions. Dave and Elissa provided the following example of how policies can help clients in their financial journeys:

Saving Policies
   -  First: Fund children’s education at a public in-state university.
   -  Second: Fund retirement to accumulate $xxx amount of funds by age 65.
   -  Third: If Retirement is fully funded, discretionary funds will then go to partially fund a private university education for the children.

Spending Policies
   -  First: For any expenditure that will be 10% or less of annual take-home pay, this will be saved for, and purchased after the funds have been accumulated.
   -  Second: For expenditures exceeding 10% of annual take-home, term financing will be used, and amortized over an appropriate time period.

Dave and Elissa opened up their personal lives to us, and gave us some real-life examples of some policies they have implemented in their family life. (They were married last July, and the author was honored to attend the wedding!) A priority of Dave’s is to “give back to the profession”, so when FPA chapters ask him to speak, he makes every effort to do so. Their joint priority is the relationship and rearing of Elissa’s two children. So their policy is that Dave does all the traveling (he lives in San Francisco, and she lives in Virginia) so that they can maximize their relationship with Elissa’s children. When travel decisions are made, they don’t have to negotiate who does what. They act according to the agreed-upon policies.

By creating Financial Policies, we planners can help our clients define the financial aspects of their lives, resulting in better day-to-day financial decision-making.

It was a real coup for us to land these two. Dave and Elissa are leaders in our profession. Elissa was president of the Institute of Certified Financial Planners (ICFP) in 1999, and was instrumental in the ICFP/IAFP merger that occurred on January 1, 2000. During that period, Dave was also on the national board of directors; and he was the 2003 FPA President. Dave is active in the FPA-PAC, and has visited our Chapter in the past demonstrating office technology systems.

If you would like to get to know Dave & Elisa better, they regularly attend the FPA Far West Roundup which is held annually in August at UC Santa Cruz.

And, if you missed this program, don’t miss the next. Jon Guyton from the Minnesota chapter, who will present his award-winning white paper on … well, just look for another article in this newsletter.