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Veros Partners' Business Consulting and Wealth Management Services for Closely-held Companies
As a Closely-Held Company, there are several special issues that must be handled effectively to maximize the long-term performance of the company. Those issues include:
At Veros, through our Business Consulting and our Wealth Management groups we have the ability and expertise to work with both the business and the individual owners to ensure that the proper level of coordination occurs in a manner that allows the business entity and the owners’ to maximize their financial opportunities and potential.
At Veros, our goal is to provide personalized wealth management and business consulting services to ease the financial complexities and burdens that you face, provide these services in an innovative, comprehensive and independent manner that we believe is unequaled in terms of scope and quality, and become your most trusted advisor for life.
Veros Partners provides personalized services to Closely-Held Companies and their owners including:
Business Consulting Services for Closely-Held Companies
Veros consults with Closely-Held Companies from a unique, all-inclusive perspective. Through the interaction of our Business Consulting and Wealth Management professionals, the Closely-Held Company’s business and personal financial matters are considered in all aspects of the services we provide. Through us retaining the knowledge of the owner’s entire situation, we are able to plan for both long term and short term goals beyond the vacuum of just the business (or just the owner’s finances).
Additionally, we strive to help educate Closely-Held Companies on aspects of their business that present a challenge to them. This might include reading and analyzing financial statements, understanding the tax impact of a profitable year, or evaluating new possible sales commission structures in next year’s budget. We want to help the business and the owner succeed, and often times, education is one of the best ways we can contribute to this success.
Some of the specific needs a Closely-Held Company may encounter where the decision relies heavily on the interaction of the business and the owner are:
- Company Retirement Plan Design and Implementation – choosing how to reward and compensate employees and maximize the owner’s tax savings.
- Business Continuity/Succession Planning – forming, managing, and evaluating the business structure and operations with an end plan in mind.
- Employee Benefit Consulting - choosing how to compensate employees and maximize profitability.
- New/Start-up Business Planning – time spent planning at the start will be rewarded many times over through the life of the business.
The seamless interaction of our Wealth Management and Business Consulting professionals helps ensure that all important factors are considered before critical decisions are made.
Wealth Management Services for Closely-held companies
Description of our Personal Wealthcare Services
Our Personal Wealthcare Services are designed to help our clients live the one life they have, the best way they can. The basic premise of our Personal Wealthcare Services is to ensure that we are focusing our financial and investment advice on what is important to each individual client. The end result of our Wealthcare process is to:
§ Provide confidence in achieving the life goals each client uniquely
values
§ Avoid needless sacrifice to our clients’ lifestyles
§ Avoid unnecessary investment risk within our clients’ portfolios
Services included with our integrated Personal Wealthcare Services are as follows:
Initial Services
§ Preparation of Personal Wealthcare Plan focused on achieving the
client’s life goals – these plans are prepared and maintained on an on-
line platform that allows for us to easily make updates and changes to
these plans and communicate these changes to the client
§ Preparation of additional financial plan to complement Wealthcare Plan
if needed
§ Preparation of written Investment Policy Statement with investment
strategy based on output from client’s Personal Wealthcare Plan
§ Transition of client’s investment portfolio to be under our management
Ongoing Services
§ Discretionary investment management based on the client’s Investment
Policy Statement and using our well-defined investment strategies and
methodologies
§ Periodic updates and reviews of the client’s Personal Wealthcare Plan
(semi-annually or annually)
§ Ongoing maintenance of the client’s Personal Wealthcare Plan on an
on-line service platform – this platform provides the client with
an electronic vault to store and view their financial documents
o Clients over $1,000,000 under our management will be provided
with their own personal financial web-site that provides daily
account aggregation and updates to the client’s asset allocation
and Personal Wealthcare Plan along with other advanced
capabilities (service to be rolled out in mid-2005)
§ Periodic investment performance reports and reviews (semi-annually or
annually)
§ Advice and assistance with personal finance issues caused by "life"
events
§ Advice based on client’s situation and life goals with any personal
finance question or issue
Preparation of the client’s individual tax return if their portfolio is greater than $500,000 (for standard return that requires up to 5 hours of preparation time, more complex returns will incur an additional fee).
The Benefits of our Personal Wealthcare Services
Below we have briefly summarized what we believe are the major benefits of our wealthcare planning services and the characteristics that differentiate our services from other advisors.
Independent & Fee-Only
We are completely independent and fee-only. This means that we do not receive any compensation from any source other than our clients. We have no products to push or hidden agenda and we are committed to providing unbiased advice with no conflicts of interest to our clients. We provide either a fixed preparation fee or a fixed fee range for completing our client’s Wealthcare Plan that is discussed and agreed upon by the client before any work is begun. This allows us to focus solely on designing the most optimal financial plan for our clients based on their goals and objectives. Further, our management fee is based on the value of our clients’ portfolios; therefore, our fees increase only as the value of our clients’ portfolios increase.
Focus on Client’s Goals and Objectives
We ensure we take the necessary time before preparing the first draft of a Wealthcare Plan and Investment Policy Statement (IPS) to have a thorough understanding of our client’s financial goals and objectives. Our plans are customized based on these goals and objectives. Our strategies and recommendations will vary from plan to plan based on each client and their specific situation.
Detailed Asset Allocation
We develop a detailed, customized asset allocation for each client’s portfolio based on the factors outlined in their Investment Policy Statement. In our asset allocation models, we include and use valuable asset classes that are many times completely ignored by other advisors, such as real estate investment trusts (REITs) and convertible bonds.
Disciplined Investment Selection and Sell Decisions
We use strict criteria and proven methodologies to buy and sell investments in our clients’ accounts. These criteria allow us to make knowledgeable, unbiased and unemotional buy and sell decisions.
Focus & Assistance with Plan Implementation
We focus on providing detailed action steps for our clients to fully implement their completed wealthcare plans. Our action steps detail the action to be taken, who is responsible for completing it and an estimated timeline for completion. We assist the client as much as necessary with the full implementation of their wealthcare plan.
Team Approach
We utilize a team approach to the delivery of our services and advice. This allows us to have and maintain the expertise to provide objective advice to our clients concerning their entire personal financial situation. It also allows us to provide continuity of service to our clients if one team member is not available and to deliver our services in a more efficient and effective manner.
We Practice What We Preach
Each partner, the partner’s parents, and our team members have their personal investment portfolios managed using the exact same methodologies and management style we use for our clients’ portfolios.
Innovative Thinking
We believe there are wealth accumulation and preservation strategies and attractive investment opportunities that are many times ignored or not discussed or recommended by other advisors due to their lack of knowledge, lack of research or lack of familiarity. We strive to consider all potential strategies which could be used and recommend the strategies that we believe are most appropriate and will best help our clients achieve financial success.
Flexibility
We have a very flexible service platform that allows us to fit our service platform around your situation as needed or as desired. We can structure a client’s investment portfolio based on their preferences in terms of asset class allocation and the types of investments we used if their preferences differ from our recommendations. We can also plan around a client’s existing investment that they want to continue to hold such as company stock or a laddered bond portfolio.
Ongoing Communication, Monitoring & Reviews
We provide ongoing maintenance of the client’s Personal Wealthcare Plan on an on-line service platform, which provides clients with an electronic vault to store and view their financial documents. We will periodically review and update the client’s Personal Wealthcare Plan (semi-annually or annually) or as client’s goals change. We review all of our clients’ investment holdings on a continuous basis. We perform a monthly review of our clients’ mutual fund holdings and a daily review of our clients’ individual security holdings. These reviews allow us to employ our strict sell criteria on a consistent, ongoing basis. We also prepare periodic performance reports for our clients to communicate how their portfolios have performed compared to certain benchmarks and their personal return goals. For any Wealth Management client opting not to receive ongoing investment advising services, we will complete annual reviews of their plan on an agreed upon annual retainer basis or at an hourly charge.
Written Plans
We prepare written Wealthcare and Supplemental Plans and Investment Policy Statements, which we thoroughly review and discuss with each client to ensure the plan meets their goals and objectives. Developing a written plan designed to attain the client’s goals provides many benefits, such as facilitating implementation, providing benchmarks to chart and review progress and providing clear planning steps for the future. Those benefits combine to give the client a strong sense of direction, focus and discipline, knowing that if they follow their plan they will achieve personal financial success.
Referrals to Other Service Providers
Since we are an independent and fee-only advisor there will be times when we recommend that our clients purchase certain financial products – such as insurance, mortgages or other loans – which we do not offer, or where we recommend our client have certain documents drafted – such as estate documents – that we can not prepare. In these instances, we will discuss the client’s options for completing these parts of their plan and, if desired by the client, we will recommend trusted service providers. We will also facilitate the process between the client and the other advisor as much as possible or desired.
Investment Advising Services
(Included within our Personal Wealthcare Services)
Our investment advising services are designed to deliver a disciplined investment approach that allows you to earn an appropriate rate of return from your portfolio without incurring major volatility and losses. The foundation of our investment advising services is to determine an appropriate target asset allocation for the client based on their specific situation and then implement that allocation by using well-defined criteria for how investment securities will be selected for their portfolio. The methodologies we use allow us to effectively manage our client’s portfolios on a continuous basis based on their specific situation, goals and objectives.
Our investment strategies include the following:
Equity Strategies
§ CAN SLIM™ – to invest in individual, publicly-traded stock securities
§ Covered Call REIT Strategy – to invest in individual, publicly-traded
real estate securities
§ Mutual Fund Selection & Review Methodology – to maintain our
Recommended Mutual Fund List
§ Separate Account Managers Selection & Review Methodology – to
maintain our list of recommend separate account managers
Fixed Income Strategies
§ Preferred Stock Under Par – to invest in relative high-yielding
preferred stocks trading under their par value
§ Other Individual Fixed Income Securities – at times, depending on
the current interest rate environment and the client’s needs and tax
situation, we may utilize criteria to select other individual fixed income
securities such as corporate bonds, municipal bonds, or closed-end
bond funds
§ Mutual Fund Selection & Review Methodology – to maintain our
Recommended Mutual Fund List
§ Separate Account Managers Selection & Review Methodology – to
maintain our list of recommend separate account managers
Specific Issues faced by Owners of Closely-held Companies
Life and financial goals differ greatly from one Owner to the next and we appreciate those differences. Most Business Owners have goals for retirement, education savings, and other personal short and long-term goals; however, to effectively plan for these items they must carefully consider and integrate their goals with their other critical personal financial areas. Our Personal Wealthcare Services for Business Owners address the following items in a fully coordinated manner:
Defining Life & Financial Goals – We help you refine, define and/or establish and quantify your life and financial goals such as for retirement – when and what type of lifestyle; for education – when and how much; and for other items such as a large purchase or a special vacation.
Wealth Accumulation Planning – We determine the best strategy to be used to accumulate wealth for future goals such as retirement, education and other goals.
Investment Planning – Based on the structure of your current investment portfolio and your tolerance (or lack of) for volatility in your investment portfolio, we determine what rate of return should be used within your wealthcare plan. This rate of return must be properly planned for within your investment plan.
Tax Planning – As a Business Owner, effective tax planning must occur in an integrated fashion at both the business and personal level. We always focus on the after-tax value or impact of any planning we do; therefore, some of the tax planning is completed throughout the other facets of completing your financial plan. Additionally, we review all of your individual tax returns filed for the prior two years to search for additional tax planning ideas. We will make recommendations to maximize your tax deductions and minimize your taxes due to the greatest extent allowed by law.
Cash Flow Planning – We review your sources of income and expenses to determine how much money can be saved for your life and financial goals. We review your current debts to ensure they are being managed and utilized in the most effective manner and we evaluate the appropriateness of paying debt off versus saving for certain goals. We also determine an appropriate cash emergency fund and how that amount can be funded if needed.
Insurance/Risk Management Planning – We are not proponents of spending large amounts of money on insurance policies nor are we typically fans of blended insurance policies such as whole life, universal life or annuities; however, each client has an important layer of insurance protection that needs to be in place to protect them from suffering major financial damage. We review all of your insurance policies such as life, disability, long-term care, health, medigap, auto, homeowners and any other policies you may have and make recommendations on changes that should be made from reducing your amount of coverage, to making changes in your current coverage, to evaluating whether any new coverages should be added. Additionally, we will review and discuss a buy-sell agreement for your business if needed.
Basic Estate Planning – We review and/or help you develop your estate plan based on minimizing potential estate taxes, ensuring your estate will be distributed to your heirs according to your wishes in an efficient manner, and ensuring that your business interests will be handled and transferred efficiently. Most clients’ estate plans include wills, trusts, powers of attorney, health care proxy and living wills. Trusts may be recommended to minimize estate taxes and/or to make an orderly distribution of your wealth, during your lifetime and upon death, while maintaining control. We will also review your beneficiary designations on your retirement plans and life insurance policies and the titling of your assets to ensure they are fully coordinated with your estate plans.
Succession Planning – We review and/or help you develop a tax-efficient plan for transferring your business to the next generation if this is your intention. To ensure a smooth transition, this planning must begin years before the actual transfer will take place.
Advanced Estate Planning – The use of certain specialized trusts such as Irrevocable Life Insurance Trusts, Qualified Personal Residence Trust, Charitable Trusts and other advanced financial planning techniques such as Family Limited Partnerships, Limited Liability Companies or Private Annuities will be evaluated and recommended if, based on our analysis and review, your estate warrants the need or use of advanced planning vehicles.
Charitable Planning – We will assist you in identifying and discussing any charitable priorities that require or have need of specialized planning techniques. Different strategies that may be evaluated include different types of Charitable Trusts, Charitable Pooled Funds and Private Foundations.
For clients with over $1,000,000 under our management, we will maintain their Personal Wealthcare Plan through eMoneyAdvisor, which is an on-line platform. By utilizing this platform, we have the capabilities of performing all of the above planning and analyses. This technology enables clients to access a comprehensive view of their financial status at all times from a user-friendly, secure web site (service to be rolled out in mid-2005).
In addition, the eMoneyAdvisor platform offers the following benefits:
§ Account aggregation
§ Balance sheet that is updated daily
§ Online storage vault for important legal documents
§ Comprehensive view of all corporate benefits
§ Personalized webpage
§ Broad financial planning capabilities, including estate planning
§ Printed reports
Individual Tax Services
Our individual tax preparation and planning services focus on maximizing deductions and minimizing the amount of tax our clients must pay while maintaining full compliance with the tax laws. For Closely-Held Companies there are several main tax issues that need to be considered on a year-to-year basis. Those issues are:
Maximizing Business Deductions – It is important to ensure that all business related expenses are properly accounted for and deducted within the business to minimize the taxes owed on your business income.
Retirement Plan Funding & Calculations – A company retirement plan can allow you to minimize your taxes by allowing you to make large deductible contributions to the plan on a pre-tax basis. We help ensure the proper contributions are made to the plan and, depending on the type of plan, certain calculations may have to be completed to maximize your total allowable contribution to the plan.
Estimated Tax Payments or Tax Withholdings – As an owner of a Closely-Held Company, you may or may not have any sources of income that automatically withhold federal and/or state income tax for you. Therefore, you need to consider whether or not there is a need to make quarterly estimated payments and/or request tax withholdings be made for you to avoid tax underpayment penalties.
Calculation of Investment Gains and Losses – For all of our wealth management and investment advising clients we track and compute their realized gains and losses from their taxable investment transactions.
See the Overview of Our Wealth Management Services for more information regarding our individual tax services.
Company Retirement Plan Services
For most owners of Closely-Held Companies their company retirement plan is a vital part of their wealth accumulation strategy due to the advantages it offers from a tax, savings and investment perspective. We work closely with you to fully understand your current situation and your goals and objectives related to their company retirement plan. Through the combination of that understanding with our independent and flexible service platform, we can assist you by recommending, designing, implementing and administering the retirement plan solution that best meets their goals and objectives. We also provide ongoing investment advising services, compliance services and/or education services to the participants of the plan.
Our approach to assisting you with selecting an optimal retirement plan solution is summarized below:
Understand – We obtain an understanding of your current situation and your goals and objectives by gaining an understanding of the following items:
- What are the primary objectives of the retirement plan?
- Maximize your and/or key employee(s) contributions
- Use as a tool to attract and retain key employees
- Provide a benefit to all employees
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How much (if any) do you want to contribute to the plan as employer contributions?
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What is your tolerance for set-up and annual administration costs?
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Review the current employee census information.
Recommend – We recommend the right type of defined contribution and/or defined benefit plan that best fits your situation, goals and objectives. This recommendation could range from a basic Simple or SEP-IRA plan to a complex retirement plan design such as a new comparability 401(k) plan paired with a defined benefit pension plan.
Implement – We assist you with the installation, conversion (if necessary) and implementation of the retirement plan.
Monitor, Review & Communicate – We are able to provide ongoing investment advisory services for the retirement plan, employee education services and/or assistance in maintaining the compliance of their plan. As your business continues to grow and mature, your goals and objectives may change and the type or structure of your retirement plan may need to be altered to reflect those changes.
These steps can also be summarized from the retirement plan perspective as follows:
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Plan Design – Understand and Recommend
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Plan Installation – Implement
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Plan Administration & Compliance (Ongoing) – Monitor, Review & Communicate
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Provide Investment Advice to Plan (Ongoing) – Monitor, Review & Communicate
Providing Our Services as a Benefit to your Key Employees
Attracting and retaining high quality employees is a necessity for any business. One way you can differentiate your company to your key employees from your competitors is to offer them a benefit that most other companies do not provide – personal wealth management services through our Wealth Management group. This is a great way to show your people that you care for their well being outside of work and deepen that employer-employee relationship with your people.
Studies have shown that many employees feel that they are inadequately prepared to handle the complexities associated with their personal financial situation, and many wish they received more direction from their employer since certain items such as their company retirement plan and their health insurance are directly connected to their employer. Studies have also shown that employees who have sound personal financial situations are generally more efficient and effective workers.
Our services can be provided as an employee benefit in the following ways:
- Have us provide our Comprehensive Wealth Management Services to your key employees and have the cost for these services be subsidized by the company on an annual basis. For example, each year up to a pre-established amount would be paid by the company to us on the employees behalf to pay for or at least offset their fees.
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Have us provide certain components (investment advising, financial planning or tax services) of our Wealth Management Services to your employees on a subsidized basis.
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Have us meet with your employees and provide personal financial advice on an hourly basis and have the company subsidize the cost of that meeting.
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Have us provide a company-paid financial education workshop to your employees on how to manage their personal financial situation or components of their personal financial situation.
The costs paid by the company will always be deductible by the company for tax purposes; however, some of these costs may need to be included as taxable income to the respective employee. We are also open to other ideas you may have outside of the examples we have listed.
The Next Step
You have worked hard to get where you are today. As an owner of a Closely-Held Company you must carefully consider and evaluate financial opportunities on both the business and personal level and how one may impact the other. To accomplish this it is important that you have an advisor who has the expertise, knowledge and ability to work closely with you to make sure you attain your life and financial goals. We offer a free initial consultation meeting to learn more about your situation and further educate you on the services we provide and the manner in which we work with our clients. This initial meeting is designed to allow both of us to evaluate whether we are a good fit to form a client-advisor relationship. This meeting also gives you an opportunity to better compare our firm to other financial service firms.
See the Contact Us section for information on how to contact our firm and establish a time for your initial consultation meeting.
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