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Insurance companies rank high on list of top companies for executive women bitly.com/QRworking_women

New Opportunities In Mid-Sized Business Market

Big 2012 for Mid-Market

1.7

Million Jobs in 2012

$650 billion in

The year 2013 might have some bright pros- new revenue pects for insurance advisors and financial planners serving medium-sized business clients. That’s because middle-market customers – those with annual revenues ranging from $10 million and $1 billion – enjoyed growth last year and so may be in a position to do some new business. Take a look: These firms added an estimated $650 billion in new revenue and an estimated 1.17 million jobs in 2012, according to the National Center for the Middle Market (NCMM). What’s more, middle-market businesses expect to grow by 5.2 percent ($520 billion) in 2013. The firms aren’t on easy street, though. For instance, only 8 percent of the firms told NCMM that they are confident in the outlook for the global economy, and just 25 percent said they are “somewhat confident.” Then again, that’s up “significantly” from second quarter 2012 when confidence levels were at 5 percent and 17 percent, respectively. The broader business market is showing mixed sentiments too. For instance, another business group – the National Association of Corporate Directors – found that, in fourth quarter 2012, directors at public companies had an economic confidence level of 44 (negative outlook) for the next three months but a level of 55 (positive outlook) for all of 2013. And a Prudential Insurance Company of America survey says that while fewer employers in mid-2012 were reporting negative economic effects from the financial crisis, those predicting their financial position will be better or improving in one year had dropped to 54 percent from 70 percent in 2010.

Are FIDUCIARY ISSUES BACK IN PLAY FOR ADVISORS?

The Securities and Exchange Commission could revisit the issue of making the fiduciary standard uniform for advisors and broker-dealers once the SEC

gets its new chairman, points out a Financial Planning article. That’s plausible, given that the SEC had fronted the idea back in 2011 in a study required by the Dodd-Frank Act. The fiduciary standard calls for putting customer’s best interests first. When the proposal met with swift opposition from insurance and broker-dealer interests that favor the suitDID YOU

KNOW

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ability standard (recommend what is suitable for the client), the SEC turned down the heat. But a fiduciary-minded SEC chairman just might turn the heat back up. If that happens, it would be like turning on the heat in the middle of summer. After all, the Dow is now inching close to 14,000, which is near its all-time high back in 2007. That may cool Dodd-Frank fervor, and the SEC may find it has other top priorities steaming on its plate – like examinations and enforcement of existing rules. Managers are no doubt nodding their heads at that. They are first to point out that priorities in go-go markets are usually different than those in so-so markets and low-low markets.

In 2013, American workers and their employers will pay taxes for Social Security on annual earnings of up to $113,700. About 5 percent of workers earn more than that cap. Source: The National Academy of Social Insurance

InsuranceNewsNet Magazine » March 2013

TAX DEFERRAL BECOMING MORE IMPORTANT

“With all the talk of increasing tax rates and fiscal cliffs, the ability to defer more money is especially attractive,” says Dmitriy Fomichenko, the president of Sense Financial Services. He was making the point while discussing the higher annual contribution limits that are now in effect for individual 401(k)s, which are tax-deferred defined contribution plans for the self-employed and the small business owner. The maximum contribution amount went up by $1,000 for year 2013, so now the limit is $56,500 for people over age 50 and $51,000 for the under-50 set, says Fomichenko, adding that the

increase “couldn’t have come at a better time. For those who qualify, a great option just got better.” That’s a reminder for insurance advisors, too, since annuity and life insurance also have tax deferral and other tax benefits. Maybe that could be a talking point to bring up with clients who are facing higher federal tax bills this year.

THEY’RE WARMING UP TO SOCIAL MEDIA

Advisors holding a Certified Financial Planner (CFP) designation are definitely using social media like LinkedIn, Facebook and Twitter. In fact, about 73 percent of them are using social media, according to the Certified Financial Planner Board of Standards. But compliance folks can rest easy. Only 45 percent of CFPs say they use social media for professional purposes —

and they cite compliance as a key reason. For instance, 37 percent said “compliance prohibitions and limitations” is a reason they do not use social media for professional purposes. Thirty-three percent also cited “uncertainty over compliance and regulatory requirements” as a reason. That raises an interesting question: When CFPs do use social media for professional purposes, what’s it for? They answered: To network with other financial planning professionals (44.8 percent), keep up with professional news and trends (43.1 percent), and do marketing and business promotion (33.1 percent).


March 2013