Case Study: Leveraging Our Knowledge of Both Personal and Retirement Plan Consulting

Case Study: Leveraging Our Knowledge of Both Personal and Retirement Plan Consulting

The Challenge

The CEO and co-owner of a company engaged our services to seek advice on several levels: a financial plan that addressed his company assets, personal assets, and risks of as the premature death or disability of the firm’s partners.  The client owned several life insurance policies on his business partner's life that would generate tax-free funds for him to use to buy the business from the wife of his co-owner, should he pre-decease him (often termed a buy-sell arrangement). However, we realized that the client could subject his heirs to unnecessary taxation due to the titling and beneficiary issues that existed within all of his policies.  Additionally, his significant personal portfolio did not take into account tax diversification, time horizon, and his appetite for risk with retirement still twenty years away.

Our Solution

We consulted with both owners and determined a buy-sell solution. All of the life insurance policy titles were restructured to avoid any potential tax issues.  Certain policies were replaced as they were old and uncompetitive in today’s environment. New policies were implemented as well to account for the significant growth in the value of the company over the last twenty years. And the buy-sell agreement was updated to reflect all the changes and present a cohesive plan in case of premature death. Additionally, disability policies were reviewed and enhancements were made to increase overall coverage, in the case of a co-owners disability.

Throughout the process, we discovered that their Retirement Plan had not been reviewed in quite a long time.  We educated the owners on the value of Financial Education and our Fiduciary360 process. They ended up implementing a new company-sponsored retirement plan, with our help, for all of their employees and engaged in regular Investment Committee meetings to discuss the plan’s progress. Overall Plan costs were reduced and employee participation rates increased as a result of the change.

And finally, we took over management of the CEO’s personal portfolio, adjusting his portfolio to align with his growth objective, further diversified his primarily large-cap equity holdings, implemented a tax diversification strategy, and coordinated the overall allocation with his 401k. Additionally, the CEO started 529 college planning accounts for his children and we helped coach him while he updated his estate documents with his attorney to reflect all of the implemented changes.   


*Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment or investment strategy for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted for your specific situation. 

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