• 2.1 million eligible taxpayers (an increase of 50% from 2005) did not deduct their state and local sales taxes. The combined value of the overlooked deductions was $3.6 billion.
• 28% of filers failed to claim a one-time telephone excise-tax break, but about 93 million taxpayers requested a combined $4 billion in such refunds. The IRS had expected to refund twice that amount.
• So many people over the age of 70½ claimed IRA deductions for which they were not eligible that the IRS has agreed to add a statement to the top of its IRA worksheet clarifying deduction rules.

The Wall Street Journal reported the story.

• While the average age of advisors who participated in the survey was 53, 40% said they have done nothing to prepare their business for a potential sale.
• When asked about their preferences for turning over the reigns, 29% wanted to sell to an existing partner and 12% each wanted to sell to an unidentified third party or to employees.
• A good number were helping employees prepare for leadership: 46% sent employees to seminars and 35% each sponsored continuing education courses or had developed internal programs.

Investment Advisor published the survey results.

• Pension plan sponsors are losing up to $20 billion annually — $60 billion over five years — by hiring investment managers based on superior past performance.
• Over one-year time periods between 1989 and 2000, top-performing asset managers took in more than $19 billion in new money each year, compared to outflows of more than $10 billion for the worst performers.
• One year later, the performance tables had reversed, and the worst managers had outperformed the previous best managers by 3.2% — and they kept outperforming three and five years later.

The findings were reported by FinancialWeek.com.

• Wharton MBA students and Harvard undergraduates were asked to choose among four passive funds indexed to the S&P 500. The only difference among the funds was their expense ratios. None of the Harvard undergrads and just 6% of the Wharton grad students opted for the low-cost fund. Even when given a supplemental information sheet highlighting the fees, few changed their selections.
• In a second example, 400 Harvard University staffers were given a series of similar choices. Just 3% of the group put all of their money into the low-cost index funds after reading the prospectuses. When participants were given educational material about fees, only 9% chose the low-cost option.

The studies were reported in the online newsletter Lipper HedgeWorld.