Houston Medical Journal June 2017 - Page 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical . . . Journal . . . - . Houston . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 2017 Page 3 Protecting your medical practice from theft . . . . . . . . . . . . . . . FINANCIAL PERSPECTIVES BY REED TINSLEY, CPA, are just “borrowing” money). CVA, CFP, CHBC Who would be most likely to commit fraud with their job. But more likely, you are probably not aware of major stressors in your employees’ personal lives; from compulsive No doubt your practice has some hard workers: the 20- year billing clerk, the front- desk employee who never takes a vacation day, and the claims processor who knows her system in and out luckily for the rest of you who would rather not be bothered with the system. While these people are great, they also fit the profile of employees who are most likely to steal from you. An embezzler or other workplace fraud perpetrator will often display certain telltale red flags. One of the many charts included in a report published by the Association of Certified Fraud Examiners includes the following listing of these behavioral indicators: Sixty-seven percent of your employees will steal from you given the chance; am I seeing more of this – the answer is yes. There are three elements of the “Fraud Triangle”: pressure (from work-related to personal finances); opportunity (either through lack of controls at your practice or lack of disciplinary action); and rationalization (beliefs that your company owes money to employees or that employees as an intellectual challenge. Employees just are not going to tell you about these types of things. In fact, in many post-fraud discussions, the practice owner has said they were unaware of the issue prompting the theft. at your practice? Some characteristics are obvious: employees who are dissatisfied behavior (with drugs or gambling, for example) to just wanting to “beat the system” • Living beyond means (370 cases; 38.6% of 959 total cases in the study) • Financial difficulties (327; 34.1%) • Wheeler-dealer attitude (195; 20.3%) • Control issues, unwillingness to share duties (179; 18.7%) • Divorce/family problems (164; 17.1%) • Unusually close association with vendor/customer (146; 15.2%) suspiciousness, or • Irritability, Please see FINANCIAL PERSPECTIVES page 11 WORTHWHILE CONVERSATIONS TOO GOOD TO BE TRUE? ANNUITIES: LIFTING THE FOG AND FINDING THE FACTS Q: We hear a lot about fines paid by major insurers over misleading annuity sales practices… We’ve observed evolution in financial products from insurers and brokers over 45 years. Generally, the more complex a financial product, the more chance for confusion by the investor. Regulators are highly concerned about misleading sales practices. In 2016, a major U.S. insurer paid a $25 million fine to settle allegations that more than 70% of their annuity applications omitted facts. Q: Aren’t annuities prese nted as a conservative investment? Yes, generally, Variable Annuities and Indexed Annuities are presented as having something like “market upside with no downside.” Indexed Annuities are not even regulated at the federal level, so policing of advertising claims is left to the 50 state insurance departments. Some of what the advertising cowboys circulate on the internet would never pass muster if scrutinized by the SEC or FINRA. Q: So what is the real problem with these? The real problem is that the high cost associated with the “no downside” part of the pitch means that there is actually no meaningful upside. Our firm’s professionals span multiple disciplines – attorneys, CPAs, CFA ® Charterholders and CFP ® Practitioners. We’ve torn these products apart, run the numbers and even served as expert witness in litigation. It can take hours reading through disclosure documents to understand the various provisions and costs that often greatly limit the upside return. The practical “guarantee” is a return that will be far below the market’s return in the long run. Q: If I’m like many people and already own one of these, what should I do next? Linscomb & Williams can sit down for a no- cost, no-obligation review of your existing financial plan to see how any annuity holdings fit. No two situations will be alike. We have an experienced team of professionals to evaluate your situation and offer fiduciary guidance, without the conflict of selling financial products. We are ready to talk, and can sit down for a no-cost, exploratory conversation at our office right here in Houston. For a free copy of our white paper, “Hidden Risks of Annuities,” send an email to info@linscomb-williams.com. The Linscomb & Williams team discuss risks related to annuity products. (Left to right: Phillip Hamman, CFA, CFP®; Ashley Trlica, CFP®; Carolyn Galfione, CFP®; Troy Taylor, CFP®; Foreground: J. Harold Williams, CPA/PFS, CFP®) Linscomb & Williams is not an accounting firm. For more information, or a copy of our Form ADV, Part II, with all of our disclosures, call Harold Williams at 713 840 1000 or visit www.linscomb-williams.com. 1400 Post Oak Blvd., Ste. 1000 Houston, Texas 77056 713 840 1000 www.linscomb-williams.com