May 2010

The Honorable Governor Edward G. Rendell
Office of the Governor
State of Pennsylvania
225 Main Capitol Building
Harrisburg, Pennsylvania 17120

Dear Governor Rendell:

The Financial Planning Association of the Philadelphia Tri-State Area[i] represents financial planners and affiliated firms, has strong concerns regarding discussions to broaden the state sales tax and vigorously oppose any tax on financial planning services. As financial planners, we uniquely appreciate the need for a balanced budget. While a professional service tax on financial planning may help achieve this end for the State, it would place a burden on Pennsylvania’s individuals and families seeking professional financial advice.

In addition to providing competent and objective investment advice to individuals and families, financial planners guide their clients through the maze of financial issues including goal setting, cash flow and spending issues, tax planning, education planning, estate planning, insurance planning and retirement planning. Public and private sector employees also rely on financial planners to guide them when structuring and rebalancing their retirement plan portfolios. This is not a service embraced only by our wealthier citizens. Planning clients include middle and low income individuals and families. An additional tax will especially discourage many of them from seeking the planning they seriously need.

A professional service tax would be detrimental to the Pennsylvania’s small business owners who consult with financial planners when implementing employee benefit plans and making other important business decisions.

Very important: A professional service tax could potentially put Pennsylvania-based financial planners at a competitive disadvantage nationally. Many financial planning firms are small businesses and the economic downtown coupled with the cost of administering a service tax would be an additional financial burden.

Respectfully,

Financial Planning Association of Philadelphia Tri-State, Central Pennsylvania & Pittsburgh.

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[i]The Financial Planning Association has three chapters throughout the state representing the Philadelphia Tri-State Area, Central Pennsylvania and Pittsburgh areas.  Collectively, with more than 1,077 individual members in the state of Pennsylvania with a combined client base of over 145,000.