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Independent Broker Dealers Can Take Advantage of Slight COLA Increases

Bob Pepalis

2014 News Update – Independent Broker Dealers Can Take Advantage of Slight COLA Increases

Now that the IRS has revealed its cost-of-living adjustments to limitations for retirement plan contributions for the 2015 tax year, are you advising clients to accelerate pre-tax contributions to qualified retirement accounts? Independent broker dealers – or a financial advisor working for a broker dealer – can take advantage of slight COLA Increases – is this part of your regular plan for your clients?

The actual announcement was made long before Thanksgiving, but other news, holidays, Black Friday and Cyber Monday kept my eyes off it until Investment News ran an article a few days ago.

Most of the adjustments are relatively small, amounting to less than $1,000. But over time we know that those increases can have a larger effect – depending on how good the investments are backing those retirement plans.

A few of the changes that caught my eye for individuals and couples who likely already are putting money into retirement plans follow. I’ve edited this list to just a few items for brevity. Visit the IRS website for details.

Deduction for taxpayers making contributions to a traditional IRA

  • Phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014.
  • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000.

AGI phase-out range for taxpayers making contributions to a Roth IRA 

  • $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014.
  • $116,000 to $131,000 for singles and heads of household, up from $114,000 to $129,000.

$1,050,000 to $1,070,000 – The increase in the dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5year distribution period. The dollar amount used to determine the lengthening of the 5year distribution period remains unchanged at $210,000.

$1,084,000 to $1,101,000 – Increase in the dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D).

These COLA adjustments are incremental, but they do provide an opportunity to accelerate pre-tax contributions to a client’s qualified retirement accounts. Do your clients expect you to provide this information to them?

Posted in: Independent Broker Dealer News

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Broker Dealers Resume Deals

Bob Pepalis

Broker Dealers Resume Deals, RCS Capital Says

Sales Restart with Reinstated Realty Capital Securities Agreements

RCS Capital Corp. (NYSE: RCAP) hasn’t identified which broker dealers have resumed sales of products distributed by its wholesale distribution business, Realty Capital Securities LLC. RCS Capital announced on Monday that the sales resumed with 51 recently reinstated selling agreements.

“We have consistently communicated to the market our belief that the suspensions of certain of our ongoing selling agreements were of a temporary nature.  The reinstatement of these agreements and this initial resumption of sales are confirmation of this belief,” said Bill Dwyer, Chief Executive Officer of Realty Capital Securities, in the press release.

RCS Capital’s senior executives purchased a total of 79,165 shares of the company’s Class A common stock last week:

  • 42,000 shares – Bill Dwyer
  • 3,815 shares – John H. Grady, RCS Capital’s Chief Strategy and Risk Officer, 3,815 shares.
  • 33,500 shares (aggregate) – Michael Weil, RCS Capital’s Chief Executive Officer, Brian Jones, RCS Capital’s Chief Financial Officer, and Brian Nygaard, RCS Capital’s Chief Operating Officer.

Weil said these purchases by management underscored their belief that the company’s market valuation doesn’t reflect the fair value of the business.

Realty Capital Securities is an open architecture wholesale broker dealer focused exclusively on the distribution of direct investments.

Posted in: Independent Broker Dealer News

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Securities America Grows as Independent Broker Dealer

Industry News: Securities America Grows as Independent Broker Dealer

Securities America Inc., has done what is necessary to keep it as a national top 10 independent broker dealer with two acquisitions this year, including that of  Sunset Financial Services Inc. assets on November 17, 2014.

With the acquisition from Kansas City Life Insurance Co. (NASDAQ: KCLI), Securities America adds another 205 advisors and $2.5 billion in client assets, the company reported in a news release. Combined with the July 2014 acquisition of 60 advisors and $950 million in client assets from Dalton Strategic Investment Services, the independent broker dealer retains its ranking published by Financial Planning magazine in 2013.

Those advisors will now report to KCL Services Company, an office of supervisory jurisdiction (OSJ) branch of Securities America. Sunset Financial Services will continue to assist Kansas City Life in issuing and promoting its variable insurance products.

Securities America has more than 1,800 independent advisors and $50 billion in client assets.

Securities America, independent broker dealer is a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE MKT: LTS).

Posted in: Independent Broker Dealer News

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