SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Chutzpah doesn’t pay…

Nothing like a little chutzpah to get the attention of federal regulators. The Treasury Department and the Internal Revenue Service last week issued proposed regulations aimed at shutting down an abusive tax-avoidance scheme known as chutzpah trusts. The trusts, which are believed to be marketed by many of the nation’s biggest accounting firms, involve the use of charitable remainder trusts to convert highly appreciated assets – such as stock – into cash without ever paying tax on the gain. Federal regulators have been poised to clamp down on the technique for several months (InvestmentNews, Oct. 4).

“No one should be surprised by this,” says Stephen R. Leimberg, chief executive of Leimberg & LeClair Inc., an estate and financial planning software company in Bryn Mawr, Pa. “These are called chutzpah trusts for a reason. Practitioners are really pushing the envelope when they use these things.”

…but God might

For people who haven’t taken the plunge into working with a financial planner, Chuck Newman hopes that maybe instilling the fear of God will do the trick. Since February, Mr. Newman has been executive director of Bible-Based Money Management Seminars, an Indialantic, Fla., outfit that teams financial planners with churchgoers to manage their finances. Seminars, which cost $39 a family, are taught by Christian financial planners from the community, and draw on scripture to teach prudent financial principles.

“The Bible has instruction on taking care of your family and you can’t do that if you don’t have the money,” Mr. Newman says. Other topics include tithing and picking the right financial planner, taken from a workbook that his company sells planners. About 56 planners have signed on since the company opened.

Mr. Newman, himself a pastor for 25 years, says that churches do a poor job teaching their members good management skills. Since they’re dependent on members for contributions, these houses of worship will benefit if the parishioners prosper.

Green Christmas online

Thinking of investing in an electronic commerce sector fund? Now might be the time. According to a study by Jupiter Communications, consumers are expected to spend $6 billion online – $5 billion on products, another $1 billion on travel – in November and December, up from $3.1 billion spent by last year’s Christmas shoppers. Further, the New York research firm projects that 10 million users will make their first online purchases this holiday season.

Steadfast it’s not

The about-to-be-born Financial Planning Association is off to a less-than-auspicious beginning. It faxed around a message to members the other day saying it was unveiling its logo online, followed quickly by another saying, oops, “Our fax vendor had system problems…Please accept their apology.”

The logo, if you’re interested, is the initials “FPA” with a paper airplane-looking thing in boomer-shirt blue as the crossbar of the A, all taking a firm stand atop the words “FINANCIAL PLANNING ASSOCIATION.” If you’re really interested, you can get the full effect – which includes the logo’s dissolving into a compass with gyrating and scissoring needles – at www.icfp.org/fpa/fpalogo.cfm.