WMC’s integrated planning
process revolves around the ongoing comprehensive review
of the client's current and long term situation,
continual development of a detailed strategic action
plan and a periodic monitoring program that ensures that
each client’s objectives are being achieved. While all
of our clients are unique and our services can vary to
accommodate special or unusual cases, most of our
clients fall into three general categories:
corporate executives,
wealthy individuals,
and
family business owners.
Integrated
Planning Process - Family Business Owners
Click here to see a representative list of
closely-held businesses
WMC’s integrated planning process revolves around the ongoing
comprehensive review of your current and long-term situation,
continual development of a detailed strategic action plan and a
periodic monitoring program that ensures that your objectives are
being achieved.
Current Financial Situation
After an initial meeting, and after financial and company
information is received, a detailed review of your personal
financial situation is performed. Detailed goals, objectives and
concerns are identified as the framework to evaluate your current
and long term financial situation. The analysis of the current
situation includes detailed assessments of net worth and income
taxes, both personally and for the company. Opportunities are then
identified to maximize the value of existing assets, or
alternatively, minimize their risk exposure.
Valuation and Assessment of Family Business
As part of the development of a net worth
statement, a rudimentary valuation of the family business is
prepared. The valuation is used to assess potential exposure to
estate taxes and, more importantly, how these taxes will be paid.
The valuation is also useful in providing an independent view of the
company for all family members, including those active in the
business and those who are passive investors. If a more formal
appraisal is required, a NACVA appraiser can be recommended.
A comprehensive review of your company’s
financial situation is also performed to search for opportunities to
enhance your company’s value. This would include a review of the
company financial statements, federal and state income tax returns,
buy-sell agreements, compensation and employee benefit programs,
strategic and or business plans, and loan agreements. Specific
recommendations to improve company performance are made and the
impact to the individual shareholders’ financial security, estate
plan and investment plan is then assessed and quantified.
Financial Security Analysis
Next, a long-term projection of your cash flows and investment
assets, including retirement plans is prepared. The financial
security of the older generation must be assured for any wealth
transfer plan to be successful. Therefore, this financial security
analysis reviews various scenarios of retirement, disability and
death. The intent is to define the level of investment assets you
and your family need to achieve financial security under the various
scenarios. In addition, the analysis provides insight into how long
you must work to be financially secure, the value of the family
business needed for this financial security, the type of investing
you can or must target (e.g., the rate of return needed), the
amounts and types of life and disability insurance needed and the
impact of your planning on your estate plan. The analysis provides
some sensitivity into the company ownership the client can "afford"
to transfer to the next generation.
Estate and Wealth Transfer Plan
WMC has extensive expertise in the development of sophisticated
estate plans to meet your objectives. As stated above, your estate
plan’s foundation again starts in the financial security analysis to
determine what you can afford to do now and in the future. A
synopsis of your existing plan is prepared, along with a detailed
flowchart explaining the disposition of the estate in the event of
your death, your spouse’s death or both. As part of this estate
review, an analysis of how estate taxes will be paid is prepared, as
well as who in the next generation will get what under the existing
plan.
Observations and implications are then
forwarded, especially as they relate to your objectives. These
observations and implications take into account your family's unique
circumstances and relationships and also your specific business
opportunities and challenges. It is paramount that these family and
business characteristics drive your estate or wealth transfer plan,
versus focusing on an estate planning technique.
Specific recommendations are then made and
implementation is coordinated with your attorney and accountant.
The plan is then reviewed periodically as your situation or
objectives change.
Investment Implementation
To help achieve your long-term financial security, WMC provides
sophisticated counseling in the design, implementation and
monitoring of investments. In addition, the evaluation of
tax-advantaged investments is also provided.
The development of an overall investment plan starts with the
investment and rate of return targets established in the financial
security analysis. These are then supplemented with constraints
specific to each client. These would include, for example, the need
to maintain liquidity in your portfolio, aversion to investment in
certain types of investments like limited partnerships, etc. These
constraints are then applied to an asset allocation model based on
the historical performance of various broad based investment classes
and their correlation of performance with each other. Ranges for
ownership are then established for each asset class. A review of
the current economic environment will then define which investment
classes should be emphasized at the high end of the range and which
investments should be diminished.
Once the broad asset classes are defined, narrower asset classes are
then selected through a similar portfolio allocation strategy and
finally, individual securities or managers are recommended. Various
portfolio screens are applied to each level of asset selection so
that only those assets with excellent performance given the
constraints applied are selected.
The performance of each asset selected is then monitored relative to
the targets established for the investment, the targets established
for the portfolio and the targets established for financial
security. This periodic monitoring is performed for every
investment you own, including those assets not managed by us.
Risk Management
WMC provides ongoing review of existing debt, life insurance and
property and liability coverage. We will provide you with
observations and implications of your current coverage, along with
detailed recommendations.
Income Tax Preparation
Income tax preparation is not included in the financial counseling
program. However, we can coordinate the preparation of your income
tax returns with your local tax advisor or with firms we have worked
with in the past. An income tax variance analysis is performed
prior to you signing your tax return to ensure that the return
reflects what has been projected for you. If it does not, detailed
explanations of variances are presented so that you are comfortable
that the tax return accurately reflects your situation. This
variance analysis is then used to ensure future projections continue
to be accurate.
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