Monday, April 16, 2012

Compliance Packs and Investments


My day at Ameriprise Financial started with meeting two other interns from Roger Williams College who showed me the ropes that day. We began by writing out reminder postcards, this either gave two or four weeks notice to the clients so they could be reminded and prepare for the meeting coming up with Mr Pippett. We also needed to identify if the meeting were to be held at the Fall River office, at the client’s house or over the phone. For the meetings that would happen in the office, we produced client packs in order for Mr. Pippitt to have easy access to information before the meetings. This enables him to review the client’s portfolio to see if any changes need to be made to their investments. Compliance documents need to be signed yearly by clients, if meetings are to be done over the phone then the company will send out a variety of documents for them to sign in the comfort of their homes. Compliance packs include:
1.     Up-to-date account summaries
2.     Disclosure forms
3.     Account suitability
4.     Professional relationships and released client information, such as
·      Accountant
·      Tax Advisor
·      Attorney
·      Property and casualty insurance
·      Real estate broker
5.     Phone authorization – this allows over the phone transactions to be made.
6.     And an agreement of the service fee from the SPS (Strategic Planning System)

            Afterwards, I sat in on two phone calls that Mr Pippitt made. The first was to find out additional information regarding a K1 form of a clients, this is a tax form distributed from a trust account. The next was with a REIT (Real Estate Investment Trust) company, this was to have an update on their product in order inform a client in a meeting coming up of its expect revalue as it had currently fallen in share price since the last review.
 
            The next thing I learnt that day was that if a client is making the majority of their money in their working years, an individual RIA would be more beneficial for them, as they can retire without having to pay taxes on their invested capital. A RIA Roth on the other hand allows taxes on their capital to be paid after they retire.
If income is made through investments then there is only a 15% tax on their capital gains compared to a higher amount that would be charged through directly earned income. This subsequently helps to explain why the likes of Mitt Romney and Warren Buffett pay a lower tax bracket then their secretaries.

No comments:

Post a Comment