Academic journal article Journal of Accountancy

Survey Points the Way to Opportunities

Academic journal article Journal of Accountancy

Survey Points the Way to Opportunities

Article excerpt

Your clients have problems. The smart practitioner knows, however, "There are no problems, only opportunities." If that's true, CPA financial planners face an array of opportunities in 1998.

Every year, the Phoenix Home Life Mutual Insurance Co. conducts its Fiscal Fitness Survey to discover Americans' financial planning attitudes and practices. Compared with previous years' surveys, Americans are more optimistic and more likely to loosen their purse strings for extravagant purchases. But is the public's good mood based on a belief that the good times will last forever? "Everyone should know the best time for financial planning is when times are good," said Walter Zultowski, Phoenix's senior vice president of marketing and market research. "I find the possible diversion of retirement savings to other purchases a disturbing trend"

The Journal asked three CPAs--current or former members of the AICPA PFP executive committee--to look at the Fiscal Fitness Survey and identify problem areas for consumers that represent opportunities for practitioners. (The CPAs, their firms and the Institute were not involved in conducting the survey.)

Long-term planning

"First, I'm concerned that so many people are taking money out of retirement savings to buy a car or take a vacation," said Lyle K. Benson, president of his own firm in Baltimore. Nevertheless, a substantial minority expect a higher standard of living in retirement than they have now. "If people looked closely at the numbers, would they really see that as true?" Steven I. Levey, director with Gelfond, Hochstadt, Pangburn, P.C., in Denver, added that people were not taking advantage of all the retirement planning options. "They need to consider the Roth IRA, educational IRA, IRA/SEPs, or SIMPLE plans. Social Security is not going to be enough." CPA financial planners, of course, can explain these options.

William J. Goldberg, of KPMG Peat Marwick in Houston, found it interesting that nearly a quarter of the respondents had no single greatest financial concern. "Do these people even have a plan? Do they need someone to tell them that a big bonus this year does not necessarily mean a big one next year? I want to know what those who expect a higher standard of living in retirement are basing their conclusions on. …

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