SEC initiatives that could affect financial advisors

On April 12, 2018, our chief compliance officer (CCO), Ms. Manal Fouz, attended the Compliance Outreach Program in Washington, D.C., sponsored by the U.S. Securities and Exchange Commission (SEC). The conference is designed to promote better communication between securities regulators and compliance officers. A limited number of CCOs from registered investment advisory firms nationwide are approved by the SEC to attend in person, while others can watch online. Here are 3 take-aways you may be interested in: 1) Continued focus on older clients and protecting them from financial exploitation The SEC continues to focus on how firms deal with their older clients and those who demonstrate diminished mental capacity. Sadly, most financial exploitation cases involving older clients is perpetrated by family members. At Azzad, we’ve already implemented a few best practices mentioned during the conference. They include allowing you to assign a trusted contact on your account. A trusted contact is someone we can talk to in case we can’t reach you or want to confirm your requests. Your trusted contact won’t be able to conduct actual transactions with your accounts, so a power of attorney (POA) is best for those cases. You can expect more questions from us if

June 2, 2018 No Comments

Be prepared for an audit of your business retirement plan

As you prepare your tax returns, it’s easy to see why a retirement plan is one of the best tax deductions you can get. Contributions to a qualified plan can potentially get you a big tax break — as big as $53,000 with a defined contribution plan or even $100,000 or more with a pension plan. If you’re an employer who sponsors a retirement plan, you don’t want to jeopardize the qualified status of your plan. Today, we are witnessing greater regulatory scrutiny of business retirement plans. Use this checklist to help you avoid some common deficiencies cited by the IRS and/or DOL in their most recent audits. If you need assistance or think you may need to make corrective measures, please contact your third party administrator (TPA) or your financial professional immediately. Plan Disclosures and Documents Do you maintain electronic copies of all your plan documents including your 5500 filings? Best practice: Make sure to scan and electronically save every document you receive from your TPA. This will make responding to an auditor’s request list much easier. Of course, your TPA and/or adviser will be able to assist you, but do make sure you’ve signed and properly dated all

March 4, 2016 42 Comments

3 common 401(k) mistakes employers and employees should avoid

For most people, saving in a 401(k) retirement plan is vital for their future financial health. Trying to save for retirement in a taxable account is not only challenging, but it’s nearly impossible to duplicate the same tax deferred compounding you get from a tax deferred (and often tax deductible) retirement account. Therefore, employers and their employees will want to avoid these 3 mistakes: The first mistake is not following an appropriate investment plan. Being equipped with an appropriate plan is essential to protecting yourself from acting irrationally in volatile markets. Instead of panicking and selling your portfolio when markets are down, stick to your plan and view such times as a buying opportunity. Don’t turn paper losses into real losses and consider this: if a security is down 50% it must rise 100% just to break even! Think about it in dollar terms: a stock that drops 50% from $10 to $5 ($5/$10 = 50%) must rise by $5, or 100% ($5/$5 = 100%), just to return to the original $10 purchase price.Of course, your plan needs to factor in your age and risk tolerance and be well diversified. For example: taking too much risk in volatile stocks when

February 8, 2016 No Comments