Daily Archives: February 7, 2022

This column is aimed at business owners. Consider Joe Brown. He owns a closely held enterprise, a productive farm. Its a sizeable spread, and he employs well-paid help. They till, plant, water, prune, weed, and fertilize. Throughout the hot summer they monitor the crop, keeping birds and pests at bay. But, wonder of all wonders, come fall Farmer Brown fails to harvest his crop! The planning, labor, nurturing...all wasted! Theres no financial return at seasons end on the time, talent and treasure expended.

This isnt a fairy tale. Failure to harvest happens every year. Roughly 70%-75% of all businesses put on the market annually do not sell. Ultimately there may be a harvest of sorts for some, but it falls well short of expectations and the financial needs of the owner and his or her family.

The oldest baby boomers turn 76 in 2022. The youngest boomer will turn 58; a mid-point boomer, 67. Consider the vast number of boomer-owned firms. Eventually every business will transition. The transition may be planned. It may be unplanned, precipitated by one or more of the 5Ds death, disability, divorce, disagreement, distress. A sole owner or key owner may retire, voluntarily or involuntarily. Some owners assert, I will never retire. You WILL retire. You may go out the door on a gurney, but you will retire!

The pandemic has spurred a jump in retirements as nose-to-the-grindstone owners and workers reassess meaning and purpose. We are about to witness a cascade of owners attempting to harvest the fruits of longtime labors.

Citing a 2016 Exit Planning Institute survey of middle market business owners, 63% of private businesses are owned by boomers. The business often represents 80%-90% of their net worth. Outside of a residence, vacation home and 401(K), little may rest in investments external to the business. To what extent does your financial independence and that of your family post-transition depend on harvesting a given inflation-adjusted value from your business?

Thats a critical question considering that 76% of owners plan to transition within 10 years, yet most have no solid plan. Consider how fast the last decade raced by. How much time do you really have to evaluate your business, determine the future value needed to secure your envisioned future, and take steps to grow a transferable, harvestable enterprise value that meets your goals?

Many business owners want to transfer their business to a family member. Families are complicated! Is the family business part of a larger family enterprise? How do you deal with family members who will not join the business? How do you know if the designated family member really wants to enter the business, or is suited for the envisioned role? Success beyond the second or third generation is rare. How will a family member as successor impact loyal and key non-family employees? Will they leave the business? Of owners who want to exercise an intergenerational transfer, fewer than 30% do so.

Developing a short- and long-term business continuity and succession strategy simply is good business. The heart of a strategic continuity plan is a Value Acceleration Methodology. Step One is to Indentify Current Value. Evaluating a number of factors produces a range of value estimate. You may or may not need a formal valuation initially. The real value is what a fully informed buyer would pay for your business.

Step Two is to Protect Value, a de-risking strategy. What are the risks to value? What risks can be insured? What risks can be managed, minimized, or eliminated?

Step Three is to Build Value. Theres a big difference in the value of a lifestyle business and a transferable enterprise. Owner dependence is a huge detriment to value, a hard reality for a typical in charge owner. Transferable human capital value is important. Yet, many entrepreneurs went into business because they were not administrative types. They did not set out to manage people, but as a business grows, team development and employee on-boarding, retention, and engagement becomes a key component of transferable value.

Step Four is to Harvest Value. Do you know what all of your options are? Most dont. What are the pros and cons of an intergenerational transfer, management buyout, sale to existing partners, qualified Employee Stock Ownership Plan (ESOP), non-qualified employee stock ownership plan, sale to a third party, recapitalization, or orderly liquidation?

Step Five, Manage Value. Many transition plans do not involve 100% cash up front. You may have an earn-out or other factors that impact payments over time relative to the sustainable value of the business after the initial transfer of full or partial ownership. Whats your post-sale value sustainability and growth plan?

One year after a sale or transfer, over 70% of former owners have regrets. Theyre bored! You can only travel so much, play so much golf. Your children and grandchildren love you but theyre busy. Your spouse may not be accustomed to you being home all the time! Whats your after-harvest plan to sustain purpose, meaning, passion, and engagement with life? Whats your plan to sustain physical as well as fiscal fitness?

Lewis Walker, CFP, is a financial life planning strategist at Capital Insight Group; 770-441-3553;lewis@lewwalker.com. Securities & advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis is a registered representative and investment adviser representative of SFA, otherwise unaffiliated with Capital Insight Group. Hes a Gallup Certified Clifton Strengths Coach and Certified Exit Planning Advisor.

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Opinion: A tale for the closely held business owner: a failure to harvest - Appen Media

Finance Minister Nirmala Sitharaman announced a key relief for tax-payers with differentlyabled family members.

Section 80DD allows tax-payers to claim deduction on anyamount paid for an insurance policy for maintenance of their differently-abled dependents. Parents or guardians of such individuals are eligible for this tax break.

However, the benefit came with certain conditions attached, which have now been relaxed. Heres an explainer to help you understand this key Budget announcement and other benefits that such individuals or their caretakers are allowed under the Income Tax Act, 1961.

What is the key condition for availing the section 80DD tax benefit that the Finance Minister has relaxed?

Such insurance policies pay the differently-abled dependents either a lump-sum or regular income in the form of annuity. The tax benefit is allowed only if the dependent receives the sum after the parent or guardians death. That is, if the differently-abled dependent were to die before the parents or guardians, the premium paiduntil then is treated as the policyholders income and taxed in the year when proceeds are received. Budget 2022 has relaxed now this provision.

The FM announced that the tax break will now be allowed even if the proceeds are received during parents lifetime, but after they turn 60. This allows differently-abled individuals to benefit from an insurance policy bought by their parent or guardian for them in a more assured manner. This will go a long way in helping differently abled dependents gain financial independence as earlier, the dependents would only get the annuity upon the parent or guardian death, says Sarbvir Singh, CEO, Policybazaar.com.

Why is Section 80DD important?

Section 80DD is meant to provide relief to tax-payers parents or other guardians taking care of medical treatment, training and rehabilitation of differently-abled dependents. Guardians include spouse, children, parents, brothers and sisters.

For instance, those suffering from locomotors disability, impaired vision, leprosy, cerebral palsy, autism and so on. If they pay or deposit any amount under an insurance policy or any other specified scheme, they can claim a tax deduction of up to Rs 1.25 lakh. That is, in case of severe disabilities of over 80 percent.

In case of less severe disabilities (over 40 percent), this tax benefit is restricted to Rs 75,000. The disability and severity have to be certified by a government hospital. However, if the differently-abled individual herself is already claiming similar deductions under section 80U, this tax break will not be available to the parents or guardians.

What are the tax breaks that a differently-abled individual can claim?

Section 80DD is meant for parents or guardians, while section 80U is applicable to the differently-abled individuals themselves. The rules are similar. If you incur expenses on medical treatment for your disabilities, you can claim a deduction of Rs 75,000-1.25 lakh. That is, like in case of section 80DD, if the disability is over 40 percent, the deduction limit will be Rs 75,000. Those with severe disabilities of over 80 percent will be eligible for higher deduction of Rs 1.25 lakh.

What if she spends less or more than the deduction limit mentioned?

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Budget 2022 offers additional tax concessions to the differently abled: Here are the details - Moneycontrol

From nursing to computer science, apprenticeships at the University of Leeds offer an alternative route into higher level qualifications.

The breadth of options on offer across the country is being highlighted as part of National Apprenticeships Week, which starts today.

The focus in 2022 continues last years theme: Building the Future reflecting on how apprenticeships can help individuals to develop the skills and knowledge required for a rewarding career, and businesses to develop a talented workforce that is equipped with future-ready skills.

The week, which runs until Sunday, brings together businesses and apprentices across the country to shine a light on the positive impact that apprenticeships make to individuals, businesses and the wider economy.

Professor Jeff Grabill, Deputy Vice-Chancellor: Student Education, said: The University of Leeds is committed to meeting the learning needs of our community. Our new University strategy promotes collaboration, equity and impact, and apprenticeships are an important part of those values.

Apprenticeships are key to help widen participation and to ensure we provide learners and businesses with teaching excellence and innovation, further boosting students' employability.

Leeds offers a range of Higher and Degree Apprenticeships which enable learners to improve their academic and vocational skills, while achieving a university qualification.

The apprenticeship programme helps improve diversity while addressing local, regional and national skills gaps, and are offered by the Universitys Lifelong Learning Centre, Schools of Computing and Healthcare, and throughLeeds University Business School.

The part-time courses at Leeds are developed in partnership with businesses and organisations including the NHS and global professional services firm PwC, ensuring the content meets their needs while maintaining the Universitys rigorous standards of research-based teaching.

Set to graduate in June 2022, the first cohort of apprentices in the jointly-developed PwC degree apprenticeship programme are already cashing in on benefits to their learning and career development.

It's been a great way to get a step ahead in my future career.

Launched in 2018, the programme is delivered by the University in partnership with PwC. Throughout the four-year programme, apprentices earn a BSc in Computer Science while building practical skills through work placements with the organisation.

Final year apprentice Lauren Cooper said: The degree apprenticeship programme is a life-changing opportunity that has really set me up for my future.

When I graduate in June, Ill come out with loads of valuable experience, financial independence, and will be ready to hit the ground running in a tech role it's been a great way to get a step ahead in my future career.

It also really opened my eyes to the possibilities to explore within computer science. I didnt appreciate how broad the field was, but through my placements Ive learned how businesses use tech to solve challenges in creative ways.

In addition to helping shape her future career, Lauren saidthe programme has also been an invaluable platform for her as a woman in tech.

About a third of the women in my cohort at PwC are women, which is much higher than the industry average.

I found PwCs culture to be very supportive they really want to encourage more women to pursue a career in STEM and create opportunities and networks to nurture you and develop your skills.

Read more about Laurens apprenticeship journey.

Though in its early stages, the programme is also delivering noticeable benefits to teams across PwC.

Cathy Baxter, Head of Talent Engagement at PwC, said: We started working with Leeds on the programme six years ago and really wanted it to be a win-win for everyone involved.

The programme is an opportunity for us to build an early talent pipeline of technologists coming into PwC while also levelling the playing field and expanding what tech talent looks like.

The programme is an opportunity for us to build an early talent pipeline of technologists ... while also levelling the playing field and expanding what tech talent looks like.

Leedss apprenticeships improve the knowledge and skills of a businesssworkforce, working with its partners to shape courses and address an organisations needs, enabling high-achieving apprentices to gain a foundation, undergraduate or Masters degree, and/or an apprenticeship qualification from the University.

Integrating university and workplace-based education and training has benefits for the business and the apprentices: skills of staff are developed to meet business priorities, and the apprentices benefit from a sponsored university education while earning a salary.

Apprenticeship schemes are created in partnership with businesses to support the needs of employers and employees.

The courses align with the apprenticeship standards designed by employers to ensure those taking part develop the necessary knowledge, skills and behaviours.

Unlike traditional degrees, apprentices are nominated by employers, who will pay their salary and training fees using the apprenticeship levy, rather than applying as individuals.

Employers can use the apprenticeship levy to develop the skills of their workforce through flexible programmes which target business priorities. The University is registered to offer apprenticeships to levy and non-levy paying organisations.

The University of Leeds offers the following apprenticeships:

Information on apprenticeships at the University of Leeds is available via the Employer Handbook.For further details, email apprenticeships@leeds.ac.uk.

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Upskilling the nation's workforce - University of Leeds

Its important when taking investment advice to understand the financial strings behind that advice.

The linked investment service provider [LISP] industry is predominantly driven by alliances to asset managers and has a legacy of higher fees and limited administration, says Charles Brits, sales manager at Wealthport.

This leaves the investor with sub-optimal choice, denying them access to investment instruments that have traditionally only been available to a small market segment. Its time we challenge the industry and provide advisors with a platform to offer their clients the true power of independent investing.

Non-independent advice comes with a very real cost even a lowball figure of 0.25% a year, compounded over 20 years, adds up to a princely sum.

Its time investors start asking what non-independent advice is costing them. Apart from the financial cost, theres the element of transparency. Tied investment advice is wrapped in murky fee structures and its frustrating trying to get to the bottom of it, adds Brits.

Wealthport is an award-winning administration platform founded a decade ago to break the stranglehold that established platforms had on the market.

We can do some things that our competitors cannot, says Brits. What sets us apart is that were independent. We have no allegiance, agreements or links with asset managers. Brokers who are tied to product providers can sell only those products, and that denies the client access to potentially far superior products that are better suited to their needs. We make our money purely off platform fees.

We dont push just one product provider but will offer advisors a broad universe of solutions that they in turn can offer their clients.

Guarding independence

By closely guarding its independence, Wealthport has built a powerful and growing business.Funds under management grew 52% in 2021.

This exceptional growth story is underpinned by the flexibility to add and subtract funds. We go through proper due diligence on all funds and businesses we have relationships with, and we build long-term relationships, says Brits.

Traditional platforms offer a limited ability to combine various investment instruments. This presents a gap for greater variety that is happily filled by Wealthport, which offers exchange-traded funds (ETFs), unit trusts, structured products model portfolios and retail investment hedge funds in a number of investment vehicles, such as tax-free savings accounts, endowments, retirement annuities and preservation funds. Hedge funds used to be for the very wealthy with an entry threshold of around R1 million but have since become accessible to retail investors, who can participate for as little as R1 000 a month.

ETFs have become a popular addition to many portfolios, something Wealthport is able to offer. Traditional investment platforms are limited in their ability to trade ETFs.

Were very flexible in adding ETFs and unit trusts to our platform, says Brits. Anything an advisor requests, we can add or take off as we please. That expands the universe of options for advisors.

We dont require financial advisors to commit to large minimum investment amounts.

Wealthport charges a standard fee 0.4% for the first R3 million, and 0.3% thereafter with room for negotiation. The fees are competitive, and hence the company is loath to horse-trade.

Questions to ask your financial advisor

My question to financial advisors is this: if you can get a portfolio of solutions that are more cost effective and fitting to your clients financial plan on one platform relative to another, why arent you giving your clients access to that?

Some ETFs we host are 0.5% cheaper than actively managed unit trusts. You have access to model portfolios that contain ETFs. Clients are becoming more sensitive to fees and if you can save 0.5% in annual fees and include the savings in performance fees usually charged, that can impact overall fund performance by anywhere between 10% and 15% over 20 years, says Brits.

Brits has a few other questions clients should be asking their financial advisors:

We have about 140 ETFs listed on our platform, and we can get more if requested, he adds.

Brits relates the story of one financial advisor who put clients into an oil ETF after the oil price crash of 2020, and then sold out four months later when he reasoned that oil had hit its peak. It is these kinds of opportunities that ETFs present and that are usually denied to clients due to the limited universe of investment options available on most platforms.

Vested interests run deep within the financial services sector, so getting financial advisors to change behaviour requires a push from clients, who are becoming far more informed on the range of products and their relative costs.

Despite this, many clients remain tied to their brokers, in much the same way as banking clients are reluctant to switch. Switching is admin-intensive and time-consuming, but advisors dont need to make this switch rather they should think about whether there are better options for the new business they bring in. Options take away the non-independence that we are speaking about, says Brits.

Due diligence

Wealthport subjects all new funds and businesses to a thorough due diligence and negotiates institutional rates with investment managers, ensuring only quality and best-priced investment products are listed on its platform.

Non-independent advisors are unable to offer their clients the choice, agility, platform accessibility and fee structure that independent advisors can, according to Brits. This explains the huge growth in funds under management in recent years.

Wealthport has representation in the Western Cape and Gauteng, but services the whole of South Africa.

Brought to you by Wealthport.

Moneyweb does not endorse any product or service being advertised in sponsored articles on our platform.

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The high cost of non-independent investment advice - Moneyweb

This artist sketch depicts Mississippi Solicitor General Scott Stewart, standing while speaking to the Supreme Court, Wednesday, Dec. 1, 2021, in Washington. (Dana Verkouteren via AP)

January 22, 2022 marks the 49th anniversary of the Supreme Courts decision in Roe v. Wade. But this year, young women/people facing pregnancy could face significant harm as the first generation in half a century to enter adulthood without the fundamental right to make the decision whether to continue a pregnancy.

Debbie Esparza

In the last 50 years, weve made tremendous strides in improving the economic outcomes, educational attainment, health and safety for women in this country. All of that stands to be undermined by the Supreme Court.

Women/people who are denied an abortion are four times more likely to live in poverty than women who can access care. Restrictions on abortion care will hurt working-class and low-income women/people the most.

Punitive abortion restrictions like those in Texas disproportionately affect women of color, LGBTQ persons, young women, immigrants, low-income people, and others who have difficulty accessing health services.

The YWCA is a trusted voice to some of the most vulnerable communities in the country. Here in Arizona, YWCA Metropolitan Phoenix provides important programming for women, people of color, and seniors, and weve been doing it for the last 110 years.

Our programs include preparing and distributing meals to home-bound and isolated older adults. We also help women and their families gain financial independence by providing free financial education courses and financial coaching. We challenge systemic inequality through our advocacy program by hosting workshops for the public to attend, partnering with organizations like the Womens March to advocate for womens rights, and supporting bills like the John Lewis Voting Rights Advancement Act to dismantle barriers and ensure freedom, justice, peace, and dignity for all.

Every person has the constitutional right to make decisions regarding their reproductive health.

Congress needs to pass the Womens Health Protection Act and solidify the right to access abortion services free from burdensome and often medically unnecessary restrictions. This bill will also protect providers, ensuring everyone has continued access to safe abortion care.

You can support the Womens Health Protection Act to make sure no one has to cross state lines to receive this critical medical care. Write to your members of Congress today.

Debbie Esparza is the YWCA Metro Phoenix CEO.

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Overturning Roe V. Wade after 49 Years will have devastating impacts on young women - Arizona Capitol Times

By The EastAfrican

Depending on how one might want to look at it, the African Union is either on the cusp of its 60th anniversary in fifteen months time, or celebrating 20 years of existence this coming week. Preceded by the Organisation of African Unity in May1963 when 32 independent African states signed up to the OAU Charter; the Organisation of African Unity metamorphosed into the African Union in February 2002.

Among others, the main objectives of the AU and its predecessor the OAU, was to free Africa of the remaining manifestations of colonialism, and to promote unity and cohesion among African states.

Yet as African leaders troop into Addis for the 35th ordinary session of the African Union, the pan African organisation, faces a critical test that will make or break it. From political instability to financial uncertainty, the AU is still in the trenches. In west Africa, the AU is juggling a crisis that has seen six military takeovers of government in the past two years alone.

Despite initiatives such as the 0.2 percent import levy that was meant to deliver financial independence, the organuisation still depends on external funding for up to three quarters of its budget. That automatically negates the aspiration for independence that is often expressed in popular slogans at annual gatherings.

The present crisis is poignant because to the average African, it has more to do with the choices of the present than the legacy of a century of colonialism. In Burkina Faso and Mali, the putschists were welcomed by citizens because they presented themselves as being opposed to the lingering threads of colonialism that still make supposedly independent states hostage to colonial master France.

Coupled with the Covid-19 pandemic and economies that were already on their knees, African leaders are under pressure to rethink and renegotiate or dismantle a status quo that is becoming increasingly unacceptable to their subjects.

If there are any lessons to learn from recent events, one is that African citizens are becoming more assertive and expect better than empty promises from their leaders. For instance, since it was adopted more than two years ago, only 32 states have signed up to the African Free Continental area AFCTA. The single African air transport air transport market SAATM, remains earth-bound despite the few dozen countries that have signed up to it accounting for more than two-third of air traffic on the continent.

Recent sanctions against military coups have had limited success because of the absence of effective transmission paths between member states. Weak commitment to, and wanting observation and respect for basic human rights, has also undermined the authority of the AU.

It would be premature to write off the AU. The organization stands for ideals that cut across the generations. Its challenges are clear for all and sundry to see. What remains now is for leaders to walk the talk, if they hope to remain relevant. A lot of the productive energy that is currently wasted in avoidable conflict, needs to be redirected towards progressive implementation of the continental agenda so that citizens can live and feel the AU.

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EDITORIAL: The AU @20, a time to walk the talk - The East African

By Louis Kalumbia

Dar es Salaam. CCM chairperson Samia Suluhu Hassan, who doubles as the President of the United Republic of Tanzania, yesterday unveiled the government and party achievements as Africas longest ruling political party marked its 45th anniversary.

In celebrations held in Musoma, Mara Region--the birth place of the founding Father of the Nation Julius Nyerere--the Head of State listed key achievements as including maintenance of peace and security, furthering democracy and good governance as well as promoting investment through construction of large, medium and small-scale industries.

Speaking at the live broadcast event, President Hassan said the implementation of the Julius Nyerere Hydropower Project (JNHPP) aimed at providing reliable electricity to support the countrys industrialisation agenda.

Strengthening transport and transportation services and implementation of the on-going standard gauge railway (SGR) are among the successes, she said, adding that come 2025, their implementation will be at a higher percentage.

Improving roads and bridges, aviation services and airports construction as well as transport in marine and lake bodies through construction of ships and ferries for passengers and cargo transport are the other areas, she added.

In the education sector, the CCM leader said infrastructure for education delivery such as classrooms; special schools; secondary schools, vocational and education training centres, laboratories, teachers houses, and many others were being constructed across the country. According to her, construction of dispensaries, hospitals, health centres in the wards, districts, regional and referral levels, distribution of medical equipment and training of experts are implemented to improve the health sector.

We have also managed to properly supervise the outbreak of Covid-19 and provide jabs to citizens. I reinstate my call that citizens should go for free vaccination provided countrywide, she said.

Furthermore, she said the government invested in production and distribution of clean and safe water that has reached 75 percent and that the journey towards supply of 85 and 95 percent to rural and urban Tanzania was going on.

Priority is on the agriculture, livestock keeping and fishing sectors, therefore, cashew and cotton farmers were this season given subsidized inputs contributing to increased yields, she said.

According to the Head of State, further investment has been made in the construction of warehouses, cilos and value addition factories for agriculture and livestock products.

The CCM chair said 10 percent of approved budgets by council is being allocated for economic empowerment to the youth, women and people with disabilities (PwDs).

According to her, special windows for loans disbursement have been introduced by different banks, the project by the Tanzania Social Action Fund (Tasaf) and enactment of policies and laws aimed to protect the interests of citizens against small sized financial institutions have been started.

The government is also supervising the Savings and Credit Co-Operative Societies (Saccos) and Cooperative Unions (CUs) for the interests of citizens, she said.

Furthermore, President Hassan said the CCM administration continues with the formalisation of the informal sector in order to benefit Tanzanians and broaden efforts of economic inclusion.

Following these efforts, Tanzania was in August 2019 declared to enter the low middle economy, six years before anticipated time, she said.

The Head of State said achievements recorded by CCM include construction of a political and ideological college in Kibaha, Coast Region, introduction of membership electronic registration and recording financial independence.

She said the independence has enabled the party to increase salaries of officers and significantly service its loans.

Briefing on the membership electronic registration process, the partys secretary general, Mr Daniel Chongolo, said it aimed at maintaining membership records, increase revenue base and enable distributed cards to be used in provision of social services.

He said party members have increased to 12 million from 500,000 in 1977 during the union of the Tanganyika African National Union (Tanu) and African Shiraz Party (ASP).

Delivering a message from the Communist Party of China (CPC), an officer whose name couldnt easily be accessed said the 45th anniversary would be a starting point for CCM to alleviate social economic and national development to the new heights.

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Samia lists success stories supervised by the ruling CCM - The Citizen