Many of our clients have been paper wealthy through ownership of a business or property and become liquid with its sale. While in the past they may have relied on a broker or even managed their money themselves, they came to the realization that they needed to graduate to a higher level of professional wealth management—a level that includes sophisticated concepts such as prudent asset allocation, tax efficiency, and estate planning. Our extensive experience in such situations makes us an ideal advisor, even before the sale. We can assist not only with the development of an investment plan for newfound liquidity, but we can help evaluate the best timing and terms for the transaction itself by taking emotion out of the process. (In fact, this is precisely how we got our start, through our intimate involvement with the sale of the Entenmann’s bakery company.)
A man who owned his own business and made a good living was presented with a very generous offer for his business. His children were not yet old enough to take over the business, so he sold and found himself with a significant amount of liquid wealth. He realized that his old practice of investing on his own would no longer be the responsible thing to do for his family and he now he needed professional money management and expert financial guidance. A CPA that he trusted recommended he speak with us.
We began our relationship by (a) explaining the benefits of asset allocation and (b) showing him exactly how we would recommend his assets be allocated based on his situation. We built trust by involving him and his wife at every step and ensuring that they understood and approved each investment that was being made.
Once the asset allocation was in place, we recommended they develop an estate plan which included setting up trusts for their children. We suggested a couple of high-net worth estate attorneys for them to interview.
Over time, our relationship has grown and we have continued to develop solutions he might not get elsewhere. For example, when he wanted to make a certain investment, we advised that rather than selling some holdings that would generate capital gains, we would help him obtain a securitized loan at a very attractive interest rate through our relationship with the large, independent institution that custodies his managed assets.