Monthly Archives: January 2015

Addressing Cybercrime in Financial Services

In 2013, the number of security breaches increased by 62 percent, which left more than 552 million identities exposed. (

How will financial services firms address the threat of cybercrimes?

How will financial services firms address the threat of cybercrimes?

It seems the more convenient the access to our personal information, the greater the risk to its integrity. These days, it’s less about if – and more about when – a security breach will happen. This is the modern-day mindset to addressing cybercrime in the financial services industry: assuming the attack is going to happen and preparing a response for when it does.

At first glance, this might communicate a gloom-and-doom position to the general public; however, financial services firms must face the reality that cybercrime will continue to grow, in order to protect the privacy of its customers.

“The number of cyberattacks should increase for firms as their information security systems become more sophisticated, because it means they are catching more problems,” said David Wagner, president of software firm Entrust.

Guidant Wealth Leverages Large Firm Resources

Here at Guidant Wealth Advisors, we’ve already taken steps to improve the security of clients’ personal and financial information. In addition to completing more stringent SEC compliance, our team has also developed additional security measures to safeguard personal data, most notably the migration of our email hosting to LPL’s secure servers.

One of the benefits of having LPL Financial in our corner as our chosen broker/dealer is we have a behemoth of the financial services industry from whom we can leverage far greater cyber security than we could on our own. The extra step required to retrieve secure email messages through LPL’s hosting service may take a few extra clicks of the mouse, but considering the cost, aggravation, and damage of compromised personal information, those extra seconds are well worth it.


Going forward, the ability to address cybercrime in financial services will depend on the number of resources available to individual firms. What will most likely develop are dedicated groups for the prevention, detection, and response to security threats. This refined approach will cast an even wider net over criminals who are lurking around every byte of financial data.

Can grandparents gift college tuition without being taxed?

Gift Money for College Tuition without Tax

One of the greatest gifts that a grandparent can give to a grandchild who is going off to college is financial support, and the government offers special provisions for those who are able to do so – as long as the rules are followed.

Before you write out that generous check, let’s review what is and what is not considered a taxable gift.

Annual Gift Tax Exclusion

For 2015, the IRS allows you to gift up to $14,000 in a calendar year to any person or any organization without that money being taxed. Any gifts over this amount are subject to certain taxes. That means if you write a check to your grandchild for $20,000, then you will be taxed on $6,000 (since $14,000 is tax exempt) even if you specify the money is to be used for education. The annual gift tax exclusion is a great tool, but there may a better way to help pay for college tuition without the tax burden.

Tax-Exempt Gifting

Instead of gifting money directly to the student, grandparents can opt to gift the money directly to a qualifying educational organization and avoid federal gift tax and generation-skipping transfer tax (GSTT). This option allows for unlimited gifting between the grandparent and the school, with the added bonus of zero gift tax obligation. Again, grandparents need to gift the money to the school and not the student, in order to qualify for tax-exempt gifting. One caveat: The money only covers college tuition; it does not cover books, supplies, or room and board expenses.

Ask a Professional Before Gifting Money

Grandparents who want to pay for college tuition by gifting money should first consider speaking with a financial advisor who can review all of the options available for education planning. In addition, some state gift tax or GSTT rules may apply, so it may be helpful to check with an advisor or attorney before making a financial commitment.

It’s Time to Take Your RMDs: A Reminder for the New 70-1/2 Crowd

For IRA holders who turn 70-1/2 by the end of December, this year marks the beginning of RMDs. Here’s the lowdown on what you need to remember.


If you’ve held an individual retirement account (IRA) for any amount of time, then you’ve had an incredible opportunity to grow your money tax-deferred. Once you reach the age of 70-1/2, however, the government expects you to start withdrawing some of that money from your account, in what they call a required minimum distribution (RMD).

For those who are just turning 70-1/2 this year, the RMD process is something new. Knowing how much to withdraw can be confusing because the amount isn’t the same for everyone. Thankfully, a financial advisor can help you with the formula that tells you how much you need to take out.

While the dollar amount of an RMD isn’t the same for everyone, what is constant is the mandatory deadline of withdrawing the money – December 31. If you fail to take the RMD by this date, then there are penalties.

However, this is the beginning of the year, and you have plenty of time to plan your finances accordingly. You also have the opportunity to discuss with your financial advisor what to do with the money from the RMD once it’s withdrawn.

For more information on RMDs, you can check out this post for IRA owners on the how and why to take your RMD before the end of the year.