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FPA Orange County



July/August 2012


Fellow FPA members:

As we continue through summer enjoying vacations, cookouts, the beach and a variety of other ways to stay connected with family and friends, we should ask ourselves, “How do we stay connected with our peers in the financial planning profession?” In our profession, it is very easy to seclude oneself, focus on getting the work done and keeping our clients happy. However, as John Donne wrote "No man is an island". Whether you are a newer practitioner or a seasoned veteran – man OR woman, we all can benefit from connecting with peers and mentors. The FPA is a wonderful place to find such help.

At the national level, FPA Connect offers many opportunities to learn, share, interact, question and teach with fellow planners. There are also a variety of different ways to access the information. There are libraries, electronic bulletin boards, discussion groups and RSS Feeds just to name a few. The site addresses over 40 topical areas (e.g., Advisers in Transition, Divorce Planning, International Cross-Border issues, Practice Optimization, etc.) and allows visitors to add their own discussion threads. It is a great tool for all planners, so I encourage you to visit the site.

At the chapter level, we offer many opportunities to get and stay connected with fellow planners as well. Whether it is through educational sessions, networking events, pro bono work or study groups, the FPAOC Board and dedicated volunteers are committed to offering programs and activities to help fulfill your personal and professional goals. Make sure you take advantage of these benefits as a member of our chapter.

Our tradition of educational excellence continues with our next Quarterly Education Meeting, which will occur on August 29th. The distinguished speaker line-up includes New York Times writer and artist, Carl Richards, and Orange County Treasurer, Shari Freidenrich. It will be a great meeting. Please make sure you register early to reserve your spot.

Congratulations to the Allied Professional Committee for another outstanding mixer. With over 30 attendees and an eclectic mix of professionals, the mixers are quickly becoming a place to be seen! It was a fun evening of networking, great food and tasty beverages. Please make sure to join us for the next Allied Professionals Mixer on Wednesday, September 19th at JT Schmid’s in Tustin at the District. Also, do not forget to register for the Allied professional Summit that will be held at UCI on October 10th.

For those of you with philanthropic inclinations, please join us for Financial Planning Day. The event will be held on October 6th at the Huntington Beach Library. There are opportunities available to lecture or do one-on-one planning for those in need. This is a great opportunity to give back. We also have our monthly study groups. For details on these events and all of our chapter events, please visit http://www.fpaocc.org/chapter-events.htm.

Help us reach 500 members! Our chapter currently stands at 475 members. It has been nearly three years since we were over 500 members. FPA National has created the Member-Get-A-Member campaign offering incentives for bringing new members to the FPA. Please reach out to advisors that you think can benefit from our chapter and invite them to a meeting. Together we can - Grow the community - Grow the profession - Grow the FPA.

Finally, please check out the Do 1 Thing section of this newsletter. We need your help! Any assistance you can provide would be greatly appreciated. And, you will meet some pretty incredible people along the way!

Please feel free to reach out to me with any questions, suggestions or comments.

Best regards,

Michael J. Shockley


Chapter Annual Meeting and Board Nominations
This year’s annual meeting will be held on October 17th at the Pacific Club in Newport Beach beginning at 11:30. Top of the agenda will be nominations and elections for membership of our 2012 Board of Directors. If you as a member would like to address the Board during the meeting, please notify the Board Secretary, Michael Weber, no later than October 10th at [email protected]. Also, if you would like to nominate someone for a board position, please email our Chapter President, Michael Shockley, at [email protected] as soon as possible.

Pro Bono Committee Update
Volunteers from the FPA OCC taught classes in the months of May and June to 8th grade students at Ladera Vista Junior High School in Fullerton. The classes were taught through the Operation Hope Foundation. Students learned basic financial skills including check writing, depositing and budgeting. They also discovered the risks and rewards of using debit and credit cards as well as the basics of investing with stocks and bonds. We plan to teach additional classes in Orange County when school reconvene in the fall.

Members Benefits Committee Update
Please come join us! Member Benefits committee meeting will be on Aug 15, 10-11 am, at 1801 Parkcourt Place, Bldg H, Santa Ana. For more information, please contact Steve Kiernan, Director of Member Benefits at [email protected].

Quarterly Education Meeting
Our next meeting will be on August 29, 2012, from 8:30 am to 4:00 pm, at UCI Student Center.

Scheduled Speakers:
  • Jim Shambo - Retirement distributions strategies.
  • Matt Brown - Talk about the current trends in estate planning.
  • Carl Richards - The "Behavior Gap" guy. He is a writer for the New York Times, a practicing Financial Planner and book author.
  • Shari Freidenrich - The Treasurer for Orange County is going to talk about the Orange County finances and how they affect our clients
CE credits available.

For more information please visit http://www.fpaocc.org/invitations/2012.07/.

Allied Professionals Mixer
Please join us for our Fall Allied Professionals Mixer – the last mixer of our popular mixers to be held before our Allied Professionals Summit. The AP Mixers are a great way to network and build strategic relationships with other allied financial professionals. Our Fall Mixer will be held on Wednesday, September 19th at JT Schmid’s in Tustin at the District from 5:30 – 7:30 pm. .

For more information please visit here.

Allied Professional Summit 2012
The FPA of Orange County and the UC Irvine Center for Investment and Wealth Management would like to cordially invite you to join us on October 10th at the beautiful UCI Student Center for an opportunity to network and learn while enjoying a delicious lunch. The program will feature our keynote speaker, 25-year asset management veteran, Leo Grohowski, Chief Investment Officer of BNY Mellon Wealth Management. We will also present a distinguished panel discussing ways to effectively collaborate with other professionals from finance related industries.

While much has changed in the economy since the launch of the Allied Professionals’ Summit several years ago, what has not changed is our paramount role in guiding clients through these tumultuous times with sound, objective advice, compelling and innovative solutions as trusted financial professionals. Utilizing collaboration among like-minded individuals in related fields of expertise will help you take your practice to the next level.

Come join Certified Financial Planners, CPAs, Chartered Financial Analysts, attorneys, investment professionals, bank executives, trust professionals, and other business leaders. Develop new relationships to grow your business and collaborate more effectively in a team-based approach.

For more information please visit http://www.fpaocc.org/AlliedProfessionalsSummit/


Consumer Advocate Opposes Bachus Bill

Green Lines, “Your Number”, and Crashing Charts
by Rick Adkins, CFP®, ChFC, CLU

If you are a big fan of the financial planning profession, you probably like the winds of change that are blowing through the national advertising campaigns of large financial intermediaries. To put them into context, think back to the advertising campaigns of the 1980s: if you were fortunate enough to find yourself at a major sporting event, the dining room of a prestigious country club, or attending a party on a yacht the size of a whale—and you got really, really quiet—you might become the beneficiary of information available only to a select few (also known as “their customers”). Never mind those pesky insider trading rules (wink, wink).

The other “old school” approach to advertising was to test the waters (do market research) to see what current state of greed or fear would motivate the masses to take action. The companies would then look in their bag of tricks to find the mutual fund in their quiver that might fit the bill, and then advertise to the public: “Oh yeah, we’ve got one, it’s great, you’ll love it!” (think gold funds and GNMA investments). That sort of thinking can lead to “accidental investing,” which we now know causes line charts to knock you off of your motorcycle and bar charts to crush your car!

The newer crop of advertisements are healthy indicators that large financial firms are finally seeing an important truth: the achievement of important financial goals isn’t accomplished by either gaining unfair advantage or randomly throwing money at an investment product du jour, and just hoping you have enough in order to retire. You really need a plan … or at the very least, a number.

The idea of “your number” is very powerful. One guy’s number is $1,086,523 and his neighbor’s number is $GAZILLION—he really doesn’t have a plan. He just blindly throws money at it and hopes something good happens. The idea that “if you are going to need to spend X amount of money each month in retirement, after taking into account Social Security, you’ll need Y amount of money invested at Z return to make it until you die” is mathematically valid and just makes sense. It’s also part of what you and I do.

The green line is also wonderful imagery. It conveys the idea that you aren’t aimlessly wandering through life. Someone’s going to point you in the right direction, help guide your decision making, and if you’ll simply stay on the line, you’ll be just fine! As more and more baby boomers approach retirement, they have a growing realization that they’re clueless about how to convert a portfolio into an income stream. They’re beginning to sense that they need guidance.

I applaud these commercials. They have the potential of motivating prospective clients to think about their game plan rather than the coolest, newest investment product. I suspect that they are causing many to engage in greater self-evaluation than they have in the past. I believe that these commercials raise the very issues that you and I try to help our clients resolve in their own lives.

Challenges to Real-World Planning
As motivators to action, they’re a great start; as behavior changers for spending less, saving more, managing taxes, and investing more efficiently, something is still lacking. That’s where you and I can help. The “real world”—ongoing implementation and modification of these numbers and lines—presents huge challenges. Here are four:

  1. Not Enough “Real” Financial Planners. There simply aren’t enough of us to do what needs to be done—particularly with the wave of millions of boomers set to retire. When I was first elected to CFP Board, there were about 36,000 certificants in this country. Today, there are only about 66,000, and not all of them actually prepare financial plans. In fact, I would venture to say that many of them have no financial planning software and haven’t actually seen a financial plan. Their role is to “gather assets,” not waste their time delving into the messy world of forecasting and then managing long-term goals. We simply need more professionals who actually: (1) perform the analysis and calculations to help people come up with a valid “number” for retirement sufficiency, and then (2) lead them forward with appropriate advice and guidance, helping them make better long-term decisions and modify their behaviors that are potentially destroying their financial futures.

  2. Inadequate Client Information Systems. Unfortunately, you and I can’t come up with “the number” if our clients don’t know their real spending patterns. “The number” is simply the present value of a client’s net monthly spending (less other income from pensions, Social Security, etc.), adjusted for inflation and discounted at a rate of return consistent with a portfolio that fits their risk profile. I’ve spent my career writing and using software that does precisely that. Here’s what I’ve learned: if they don’t give us “the truth,” we can’t give them “the number.” The only way to get to the truth of their spending patterns is to have an information system in place that collects those patterns. Like it or not, that means using something like Quicken, Mint.com, iBank, or some other financial data-gathering system. That’s the greatest challenge you and I face in coming up with a meaningful number for our clients, and it’s one that I believe technology will continue to “painlessly” provide.

  3. The Human Tendency to Wander.   Click Here to Read More


08//29/2012 All Day Quarterly Education Meeting
09/11/2012 3:30-5:00 pm Study Group
09/19/2012 5:30-7:30 pm Allied Professional Mixer at JT Schmidt's in Tustin
09/29-10/02/2012 All Day FPA Experience 2012
10/02/2012 3:30-5:00 pm Study Group
10/06/2012 10:00 am-4:00 pm OC Financial Planning Day 2012
10/10/2012 10:30 am - 2:30 pm Allied Professionals Summit
11/28/2012 All Day Quarterly Education Meeting

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UC Irvine

UC Irvine Extension offers the Personal Financial Planning Accelerated Program, an intensive five-part program covering the body of knowledge for Certified Financial Planners™. Successful completion of the Accelerated Program fulfills the educational requirements to sit for the CFP® Certification Exam. This problem-solving, client-centric program provides a strong, comprehensive approach to the principles of financial planning. A hands-on approach including case studies allows students to demonstrate real-world application of the materials.

UC Irvine Extension’s CFP® Live Review Course, offered twice a year—in summer and winter—is designed for those who have completed our Personal Financial Planning Accelerated Program, or any CFP® registered program, and are planning to sit for the CFP® Exam. This intensive course, offered over six meetings, covers all 89 topics tested on the exam. Students who have taken UC Irvine Extension’s Personal Financial Planning or PFP Accelerated program are eligible for a discount on the CFP® Live Review course fee.

Anyone interested in becoming an instructor at UC Irvine Extension should first view our website at:
Click here to read the guide.

Click here for more information.

For Personal Financial Planning Program or the CFP® Live Review Course: Francine Berg , (949) 824-4661
For FPA Residency Program: extension.uci.edu/fpa
For Recruitment: Kathy Amoroso.



Refresher on Key Insurance Concepts for Financial Planners

Refresher on Key Insurance Concepts for Financial Planners
by Peter C. Katt, CFP®, LIC

This column provides practical commentary on insurance products, issues, and planning that I frequently encounter. Considering the questions I often receive from CFP® practitioners, I hope advisers can use this information as a quick check to see whether proposals encountered are even sensible. I have written about each item in some depth over the years, and those more-detailed explorations can be found at the Journal’s site or mine.

Annuity (Deferred): An asset that defers recognizing income until the annuity matures. It can be continued and transferred to a spouse at death without tax consequence. Ultimately, it can be transferred to children, and they begin receiving income at their life expectancies with appropriate taxes paid. Or clients can exchange it for an income annuity at retirement to receive income for life. An astute planner should use deferred annuities to absorb taxable income or otherwise unused cost basis from life insurance being terminated because tax-neutral exchanges are allowed. I recommend using the fixed annuity instead of variable or index annuity. This usually isn’t an appropriate asset for the wealthy because they have no need to convert to an income annuity and need greater flexibility in asset distributions to match up with estate planning strategies.
Annuity (Income): Provides income for life with a specified, certain period of say, 10 years, if this is desired. Usually a portion of the income payment is taxable with the remainder tax-free return of principal. In combination with deferred annuities for early accumulation, these provide very tax-wise planning when qualified plans have been maxed out.

Term Life Insurance: The primary life insurance risk asset for most families, usually purchased as 10-, 15-, 20-, 25-, or 30-year level term. Most clients are underinsured with term. Considering how inexpensive it is and the vulnerability of families when primary income earners die, buy a lot of term. Term is also used for business buy-sell funding. Also, term can be used for short-term estate tax liquidity when estate assets will be liquidated. Finally, most term can be converted to permanent insurance without proof of insurability. This can be a very valuable right in the correct circumstances.
Participating Whole Life (PWL): Is sold by the few remaining mutual life insurance companies. It has two excellent uses that feature death benefits that will increase significantly over time as dividends are earned. The first use is for 30- and 40-something high earning professionals to accumulate cash value on a tax-deferred basis and add to their family protection life insurance. Later cash values can be withdrawn tax-free (up to cost basis) for education purposes, to supplement retirement, or whatever. The residual policy will continue and provide an inheritance for children. The other use is for the wealthy who don’t have an estate tax liquidity problem. PWL is an excellent wealth transfer asset. Gifts are made to an irrevocable trust and invested in the PWL. The proceeds are income-tax free. Do not use PWL when level death benefits are needed because it lacks premium flexibility.

Click Here to Read More



Name Joined Company City
William Hezzelwood June Actuarial Analytics San Clemente
Jeffrey Holt June Financial Management Network Mission Viejo
Steven Jackson July Crowell, Weedon & Co Pasadena
Lori Messina June PolicyLogix Irvine
Julie Newcomb July Newcomb and Athan Financial Tustin
Hugh Sanders July Samuels, Green & Steel, LLP Irvine
Marcy Whitehouse June   Orange


Name Years Company  
Samuel Ortizh 15 Samuel V. Ortiz, Jr., CPA  
J. Anthony Pena 15 Financial Advisers of America, LLC.
Cythia Thompson 10 American Funds Distributors, Inc.  
Krista Kirby 5 Kirby Wealth Management  
Alan Schryer 5  
Joseph Ziomek 5 Laguna Financial Group  


FPA Orange County One Thing Leads to Another... Get involved and make a difference! If we all just did ONE THING, imagine the impact we can have on our Chapter and on shaping our profession! 

OC Financial Planning Day. If you are interested in volunteering for the following tasks, contact Carol Bobke, Chapter Administrator at [email protected].
  • Print directional arrow signs for the event.
  • Design and print name badges for the event.
  • Place directional arrow signs at the event.
  • Order blue and white balloons and bring them to the event.
Government Relations. Contact Samantha Vient at [email protected]

  • Introduce the Government Relations Committee to any elected officials you might know.
  • Log in to the FPA Grassroots site / Legislative Action Center and check out the Current Issues where we need your support.
  • Write your representatives on these important issues that affect our profession and businesses. Letter templates are already provided!!! It only takes 1 minute.
Quarterly Eduction Meetings. If you are interested in volunteering for the following tasks, contact Carol Bobke, Chapter Administrator at [email protected].
  • Utilize your high-speed scanner to scan the continuing education sheets from a Quarterly Meeting.
  • Create name badges for the Quarterly Meeting and put them in name badge holders.
  • Input continuing education sheets using a chapter-owned barcode scanner.
  • Help greet Partners when they arrive at Quarterly Meetings.
  • Be the “chimer” at our Quarterly Education Meetings.
  • Coordinate the raffle for an upcoming Quarterly Education Meeting.
Public Relations. Contact Ralph Adamo, DIrector of Public Relations at [email protected]

  • Tweet for the FPA! Help publicize our events and happenings through Twitter.

FPA Allied Professionals Summit -- Contact Howard Erman, Director of Allied Professionals at [email protected]

  • Create name badges for the Summit.
  • Emcee a table at the Summit.
  • Invite your associated professionals to the Allied Professional Mixers and Allied Professionals Summit.
  • Sign on to the Allied Professionals LinkedIn page today.
Other Opportunities. Contact Carol Bobke, Chapter Administrator at [email protected].
  • Provide a location for a monthly study group.
  • Utilize your high-speed scanner to scan archived FPA OC documents.
  • Reach out to current sponsors to try to find one who would like to join our volunteer appreciation event.
  • Occasionally proofread communication pieces before they are sent to our members.


FPA Orange County Read through the Capitol Update newsletter for the latest summary of tax, securities, pension, insurance and professional issues of importance to financial planners.
  • Battle Heats Up Over Money Market Fund Regulation
  • New FINRA Suitability Rules
  • Controversy Continues Over Department of Labor Fiduciary Rules
  • Dodd-Frank Implementation Lags
  • SEC Enforcement Deputy Named Head of Investment Management Division
  • Lawmakers Inaction on Taxes Could Hurt 2013 Season
  • Increased Scrutiny of IRA Rules Expected
  • IRS Issues Estate Tax Guidance on Unused Exclusion Amount
  • IRS Releases Guidance on Section 83(b) Elections
  • IRS Releases Two Proposed Rules for Plan Sponsors
  • Many IAs Will Miss Switch Deadline
  • Massachusetts Chapter Visits Beacon Hill
  • Pennsylvania 529 Plan Tax Parity Retained
  • Status of CA Bill to Create Public Pension for Private Workers
  • Three Tax Measures Qualify for California’s Ballot in November
Click Here to Read More




Brown Streza LLP Attorneys at Law
Payden Mutual Funds
Thornburg Investment Management
Trust Company of America



American Funds


Pioneer Investments

Fidelity Investments



Pacific Life

MetLife of Southern California



MetLife Reverse Mortgage

Wasatch Funds


Wells Fargo Home Mortgage




Artio Global Investors

Cole Real Estate Investments


Millenium Trust Company


Security Benefit

Dishon & Block Attorneys At Law



Sierra Investments

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Edward Jones





Black Rock

TD Ameritrade Institutional

Principal Funds






Alliance Bernstein


FPA Orange County