Preparers other than CPAs, attorneys and enrolled agents face new competency testing. These preparers will have three years from the testing implementation date to demonstrate competency on at least one of two tests-one of which covers individual returns with business income while the other covers non-business income. Individuals who pass the test will earn a new, yet-to-be-coined designation and will be allowed to represent taxpayers only in the IRS examinations of returns they prepared.
They'll also have to comply with the ethical guidelines of Treasury Department Circular 230 and complete 15 hours of annual continuing education that includes ethics.
The carve-outs that exempt some professionals have not gone unnoticed by the CFP Board of Standards. "We are analyzing the impact on CFP certificants and, if warranted, will be working to secure exemptions for CFP certificants similar to those for attorneys, CPAs, and enrolled agents," the organization said in a press release.
For more information, see the "Tax Professionals" page at www.irs.gov.
-Eric L. Reiner
Guggenheim To Buy Security Benefit
Guggenheim Partners LLC, a Chicago-based financial services company, has reached an agreement to purchase Security Benefit Corp., whose holdings include SGI|Security Global Investors and Rydex|SGI.
The Guggenheim-led group will make an investment of approximately $400 million in Security Benefit. Additional terms of the transaction, expected to close by the summer, were not disclosed.
The acquisition melds three different firms. Guggenheim's holdings include a giant multi-family office typically serving families with more than $25 million; Rydex|SGI is an investment management firm specializing in risk management-oriented ETFs catering to financial advisors, and Security Benefit is an insurance company with a more traditional asset management arm.
Guggenheim Partners, whose legacy dates back to the Guggenheim dynasty, counts as one of its holdings multifamily office Guggenheim Investment Advisors.
Security Benefit's holdings include Security Financial Resources, a provider of retirement plan services for more than 135,000 accounts across the nation, primarily in the education marketplace; Security Benefit Life, a provider of fixed and variable annuities to about 200,000 policyholders; se2, a provider of administrative services for the insurance and financial services industry with more than 700,000 policies and $30 billion in third-party assets under administration; and SGI|Security Global Investors and Rydex|SGI, a $22 billion asset manager.
RIA M&A Activity Down In '09
Many financial advisors had their hands full recovering from the Great Swoon of '08 (and early '09), so it's no surprise that mergers and acquisitions among RIAs slumped last year.
According to Schwab Advisor Services, there were 71 M&A deals involving RIAs in 2009, down from 88 deals the prior year. The total dollar amount from last year's deals dipped nearly 25%, to $103 million from $137 million.
There were several reasons for the drop, says David DeVoe, managing director of strategic business development at Schwab Advisor Services. One, the recession had people running scared and feeling poorer, including many advisors whose practices were hammered by falling AUM, cash flows and revenue that compressed valuations at their firms.