• Convert an IRA to a Roth IRA without the up-front conversion costs!  (for those over age 59, who have an IRA or retirement plan and a taxable income < $100,000)  Perfect for those who want more after tax income from their retirement plan for themselves.

• Grow part of your retirement plan income and estate tax free for your heirs.   (for those who are over 55 and have $250,000 or more in a retirement plan or IRA)  Perfect for those who say, "There's a part of my retirement plan I'll never need. How can I avoid income and estate tax for my kids?"

INSURERS HELP TOO – Following the terrorist attacks, life insurance companies have taken extra steps to make sure customers receive excellent service and are treated with compassion and sensitivity, says LIMRA. Company actions include: paying claims without "act of war" legal issues, setting up dedicated claims processing units, easing documentation requirements, easing rules on late payments and reinstatements, having grief counselors available and donating to disaster relief funds.

FINANCIALLY VULNERABLE - More than 18% of insurance companies, HMOs, banks, thrifts, and brokerage firms currently exhibit weaknesses that make them vulnerable to financial difficulties in a recession, according to a study by Weiss Ratings. Breakdown of weak companies by industry: Banks and Thrifts, 16.2%; Blues, 1.9%; Brokerage Firms, 1.4%; HMOs, 40.9%; Life and Health Insurers, 25.9%; Property and Casualty Insurers, 23.5%.

PROFIT IMPACT – U.S. insurers' third-quarter profits are expected to be wiped out with the destruction of the World Trade Center, giving little hope that higher premium rates will rebuild earnings over the next few years. The losses are expected to be twice the size of the previous all time loss, Hurricane Andrew in 1992. Expect higher rates as demand increases and insurers willing to provide coverage decreases.  There are also predictions that the decrease in term insurance premiums may be at an end as insurers seek to recover losses from last month's attacks.
 

TERROR POOL – The $15 billion federal bailout of the airline industry has created a flurry of aid requests from a number of other industries, including travel agencies, hotels, Amtrak, farmers, and the steel and insurance industries.  There's even a proposed bill that would allow visitors to New York City to take a $500 federal tax deduction.  This is, of course, raising the question of what the government's role should be in rescuing ailing industries.  For its part, the U.S. insurance industry will ask Congress to approve a proposal that would establish a $10 billion government-backed insurance pool to protect them from further terror attacks after the destruction of the World Trade Center. The plan is similar to Pool Re in Britain, established after repeated bomb explosions in London. Real estate groups have come forward supporting the move, saying failure to do so will hurt sales.  

ALPHABET SOUP – With all the designations now available, some advisors are questioning if they have true value or are money motivated. FYI here are a few: ChFC, CFP, CFA, CLU, CMFC, CFS, CRS, CSA, CAA, RFC, CDP, PFS. Check out some comments from other advisors by clicking here.

COMPANY NEWS – Protective has completed the acquisition of the stock of Inter-State Assurance Company and First Variable Life Insurance Company from Irish Life.  Axa Financial, meanwhile, announced that it will cut $224 million in costs in 2002 in response to the slowing economy. Allstate has opened its bank through Allstate Agencies in California and nationally via the Internet and a toll-free phone number.  "The introduction of Allstate Bank is an extension of Allstate Financial's strategy to become a broad-based financial services provider through a wide range of consumer banking products and services targeted at helping middle-income Americans protect their finances and save for retirement."

EMERGENCY POWERS – The SEC played a key role in the operations of our markets following the September 11 attacks.  The Emergency Securities Response Act, introduced by Rep. Michael Oxley, chairman of the House Committee on Financial Services, would broaden the SEC's emergency powers by allowing the SEC to extend emergency orders for up to 30 business days and, in some cases, for up to 90 calendar days.  SEC emergency orders are currently limited to 10 business days.

P-E RATIO AND MARKET VALUE – According to an article in Financial Planning, the air may not yet be out of the market.  Reason?  The price-earnings ratio of the S&P 500 reached an all time high on Oct. 11th (35.99).  That exceeded the previous high of 35.82 set April 12, 1999. How? Although share prices are down significantly, profits are down even more. Click here for the complete article.
 

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ECONOMIC STIMULUS – The House Ways and Means Committee passed a $100 billion economic stimulus bill last Friday.  The bill includes rebate checks for the 30 million workers who did not qualify for the earlier income tax rebates, as well as flexible grants to the states to provide benefits for the unemployed.  Other provisions include repeal of the corporate alternative minimum tax, enhanced write-offs for business capital purchases, cutting the 27% income tax bracket to 25% in 2002, and changing the holding period for long-term capital gains treatment so that most investments would qualify for the lower 18% tax rate.  Deductible capital losses would be increased to $4,000 in 2001 and $5,000 in 2002, up from the current $3,000.  It's expected that the bill will undergo significant changes when it reaches the Senate.

CLIENT COMMUNICATION – If you haven't communicated with your clients following the September 11 disaster, there's an excellent model letter you can use in this month's Financial Services Journal.  Check it out by clicking here. 

FINAL BLOW? – Already a political "hot potato," the plan to partially privatize Social Security may now be a "dead duck."  The budget surplus needed (and previously available) to pay for the plan is gone for the foreseeable future. 

PULSE OF AMERICA – According to a national ING Aetna Financial Services survey, 77% of Americans "aren't allowing the events (of September 11) to significantly impact their saving and spending habits." 

INSURANCE AND REINSURANCE ISSUES – The unprecedented losses from September 11 will cause insurers and reinsurers to review the issues of coverage provisions, exclusions, deductibles, retention and limits of liability of policies and reinsurance contracts, as well as their ability to obtain reinsurance and access to capital. Property, casualty, life, health, accidental death and disability, workers compensation, aviation, and even auto insurers and reinsurers will be called upon to pay enormous losses. Insurers providing business interruption coverage to businesses in and around the World Trade Center will bear very large losses. Event cancellation insurance will come into play, as Broadway shows, sporting events, conventions and events all over the world were/are cancelled. Click here for details. 
 

ANTI-SPAM – The IIAA has come out in support of an e-mail anti-spam bill offered by Rep. Bob Goodlatte (R-Va.), saying it "strikes a positive balance between protecting consumers from an unwanted avalanche of commercial e-mails while still permitting small businesses to use online marketing practices." As the operator of the Internet's largest opt-in newsletters for financial advisors, as well as the largest inspirational and educational only opt-in list on the Net, we agree. We are seeing an increase in companies establishing lists for periodic mailings without the subscribers' permission. Everyone considering this practice should weigh their reputation against the potential for revenue...most decide it is not worth it.

SEVEN HABITS – If you want a review of Stephen Covey's classic or if you have never made time to read it, visit here. 
 
CHARITABLE CONTRIBUTIONS – If you're thinking of making a contribution to aid the victims of the September 11 attacks, the IRS has a list of qualifying charities available on their site.  

EXECUTIVE BENEFITS SURVEY – Clark/Bardes' 2001 Executive Benefits Survey of Current Trends indicates increases across the board in Fortune 1000 companies that utilize nonqualified deferred compensation (NQDC) and supplemental executive retirement plans (SERPs). Most of the companies are funding their NQDC and SERPs with Corporate-Owned Life Insurance (COLI) or Trust-Owned Life Insurance (TOLI). Downloads of the survey are available at ClarkBardes.com under "publications."

FALLEN FOOL – The Motley Fool has taken a dot com hit. The financial Fool gurus, brothers David and Tom Gardner, built the company to over 400 employees on advising people to do their own investing, but will soon be down to 50 or so employees. Reason: big drop in online ad prices.

GATHERING MOLD – Knowledge Digest directed us to http://www.moldupdate.com.  It is an EPA Web site offering basic information on molds, with focuses on identifying molds, preventing mold growth, health effects of exposure to mold, and remediation of mold problems.

STILL TRYING – One of the nation's largest Internet women's communities is trying to sell insurance to its members. CNA will offer a variety of products to iVillage.com members who "are using the Internet as a research tool to educate themselves about insurance products."