Residential Lighting: How can a wealth manager help lighting retailers?
Andi Kang: Wealth managers can help in the development of short-term, intermediate and long-term goals. We go beyond traditional financial-planning ideas and solutions to encompass wealth accumulation, wealth preservation and wealth transfer. Complex financial affairs may be streamlined by working with a single wealth manager who is at the center of an expert advisory network, guiding the business owner every step of the way.
Residential Lighting: Can you give an example of how the network operates?
AK: In one case, I had a client see an attorney. The attorney recommended forming a limited partnership, along with a complicated estate plan that included multiple layering of trusts.
It would have been expensive to implement, and it required naming multiple beneficiaries and trustees. [We consulted another opinion through] a CPA. He looked at the limited partnership as fairly easy to do, with minimal cost and without all the layers of trusts. The CPA suggested setting up a basic estate plan. As the family grows, they can add the other layers. In other words, the owner didn’t need the complicated estate plan right away.
Residential Lighting: What is the most common oversight you see in businesses?
AK: There are many oversight possibilities as business owners’ finances become ever more complex. I find that running a business is like conducting an orchestra. Business owners have different “instruments” playing at the same time, such as getting legal, tax and insurance advice, but they may fail to have one “conductor” to orchestrate the “concert,” a wealth manager.
Residential Lighting: So, one person also does the financial planning for the business operation?
AK: Sure. Part of the planning process is to examine the systems and processes in place.
We look at the big picture, and we examine whether the business model and operational systems are efficient and effective.
One area to look at is the benefit and retirement planning for the business. Efficiencies can be created when planning a retirement package for the owner that allow him to give benefits to employees. There are many win-win situations. Successful business owners are in the highest income-tax bracket. They can save 40 percent or more based on their tax bracket, while [passing along the benefits] to their employees.
Residential Lighting: Any tips for lighting retailers in today's tough economy?
AK: This is where a wealth manager can help. There are opportunities and strategies to explore throughout the economic cycle. During a slowdown, defensive strategies may be addressed, but many wealth management solutions are not linked to the market or the economy. Wealth managers can shield clients from volatility, enhance the well-being of the business owner, help reevaluate the business objectives and rethink targets and expectations as market and economic cycles change.
Andi Y. H. Kang, CFP, is President of Crown Wealth Management Inc. in Huntington Beach, CA. Kang is the author of several articles and industry reports, and she is quoted regularly in publications, including Money Magazine and The Wall Street Journal.
1. Avoid costly mistakes by pre-planning sound wealth management strategies.
2. Set measurable goals for your wealth management program.
3. Feed your future, and that of your business, through education and savings programs.
Source: Andi Y.H. Kang