Client Scenarios

Goals Based Wealth Planning

Goals Based Wealth Planning
Client Scenario:
 These clients are a high-net-worth couple who have been married for 10 years and are raising three children; the wife receives inheritance from a late family member. The inheritance she receives alters her assets significantly, as she is the primary caretaker for the couple’s children, which makes the husband the primary income earner.

Action Plan: When taking into account the couple’s long- and short-term goals, there are three areas of concern to focus on:

  1. Financial stability. Security in one’s financial future is universally sought after. Unfortunately, the couple in question does not have this same confidence. We would help them develop:
    • A plan that takes into account all personal and family goals, as well as considers many possible financial scenarios, therefore strengthening the chances of achieving said goals
    • Present and future options for income strategies
    • An investment plan that sets and recognizes goals while keeping risk in mind, and mitigating losses when the market is down
  2. Inheritance. There are many life events that can bring significant change to a family’s situation, some not always as positive as others. In this case, one of these clients benefits from an inheritance. Accordingly, we would work on the following:
    • Estate and charitable planning
    • Protection of the female client’s assets, as she wanted to keep inherited assets separate from those pooled
    • Income and investment planning as a reaction to the financial windfall
  3. Family planning. Of course, the most precious assets in many parents’ lives are their children. We would help them develop plans to protect what they care about most. Here’s what we would present them with:
    • Strategies for risk management and insurance that mitigate the risk of a family member becoming medically disabled, passing away, or requiring long-term care
    • A break-down of trusts and other various tools that would serve to divide assets appropriately among family members
    • Plans for higher education options, as well as other educational opportunities

Planning for Retirement

Planning for Early Retirement
Client Profile:
 Married couple in their 50s who want to retire early. Early retirement is an appealing idea to many, but if it is going to be a reality, one must plan carefully. Moreover, retirement comes with not only financial, but emotional concerns. We address the full picture of retirement—at any age—to help ensure our clients can truly enjoy that time.

Action Plan: We would meet with the couple multiple times to learn about their specific goals in retirement and to gain insight into their finances.

  • We review their financial situation through our diligent retirement analysis process and walk the clients through their specific options and likely outcomes.
  • We learn that the couple could retire comfortably, but that they were not ready emotionally.
  • In order to prepare for their eventual retirement at a time when the couple felt ready to make that change, we reposition their assets in a way that matched their goals and risk tolerance.
  • We continue to monitor the investments and make any necessary tactical changes, while also assessing retirement feasibility on an ongoing basis in our regular meetings and discussions.

Planning for Retirement While Pursuing Life “Dreams.”
Client Profile: 
Female in her early 60s looking to ensure that she’s on track to retire in two to five years. Retirement may mean a true end of “work” or could be a time to pursue a passion, travel, spend time with family, or take the time to do any number of things you’ve dreamed of. It comes with financial and emotional concerns, and we understand both. Often, retirement is the idea that brings a client to our door, though it’s rare the story ends there, as we uncover additional goals and planning needs. We’re proud to have helped countless individuals and couples pursue their ideal retirement.

Action Plan: We would analyze our client’s savings, which included employer-sponsored retirement plans and multiple investment accounts.

  • Once we determine that the assets are adequate to retire, we discuss her overall financial plan to assess whether or not she could pursue her passion: to buy her dream vacation home.
  • We educate her on the possible impact of different decisions and circumstances, such as lifestyle changes, stock market performance, and health issues.
  • We help her reposition some of her assets such that they’d potentially produce more future income to keep pace with her dream retirement.
  • We rely on our cash flow and asset projection tools to effectively estimate if our client could retire and buy her dream home, while maintaining her lifestyle.
  • We find out that our client could purchase the home, and we continue to monitor her investments and financial plan while in retirement. 

Planning for Future Legacy
Client Profile:
 High net-worth, divorced, with two children, focused on future stability and protecting his legacy. Along with planning for retirement, many want to ensure that their most precious assets—their children and other beneficiaries—are taken care of after they pass. We have discussed many strategies that allowed our clients to gift to their children and/or charities, without compromising their current lifestyle.

Action Plan: We analyze our client’s current assets and plan for retirement to gain insight into his finances through our cash flow and asset projection tools. This allows us to go through a number of options and likely gifting outcomes.

  • We research and implement a complete financial plan that accounts for personal and family goals and considered multiple scenarios, increasing the potential likelihood of goal achievement.
  • We also review income strategies for today and for the future, as our client pursued an ideal retirement.
  • We develop a properly diversified investment strategy that addresses goals while respecting risk tolerance, providing protection during market downturns.

We also present:

  • Risk management and insurance strategies that seek to provide for loved ones should an income earner become disabled, pass away, or require long-term medical care
  • Trust solutions and other tools to assist in dividing assets appropriately among family members
  • Strategies for planning for children's higher education and other opportunities

Planning for Business Owners

Planning for Business Owners
Client Scenario: 
The client used by example in these tips is burdened by taxes, due to the fact that she provides the main source of income for her family with the business she owns. Although the business’s success positively drips down to her earnings and retirement savings, she is always feeling short on time and sought help from us.

Action Plan: After reviewing the client’s goals and concerns, which include both family and business finances, we coordinate her advisors (CPA, attorney, etc.) to build a comprehensive strategy focusing on four key issues:

1. Taxes. Since the client owns a successful business, which, in turn, makes her a high-income individual, her tax burden is quite large. To help alleviate this expense, we work on the following:

  • Strategies for tax efficiency
  • Taking advantage of tax-deferred income vehicles (such as retirement plans)
  • Opportunities for charitable giving
  • Risk mitigation tools for protecting assets (providing additional tax benefits)

2. Business planning. At certain points in their maturity, all businesses transition through different stages of operation. This client needs help managing certain critical components of her business’s life cycle: specifically employee retirement plan platforms, which may help her recruit and retain high-quality staff. To assist her with this issue, we:

  • Formulate a plan to help improve the efficiency of the client’s administrative responsibilities, maximize the benefits of her employee plans, and promote satisfaction
  • Develop a strategy to limit fiduciary liabilities, helping her manage the changing landscape of the regulatory environment
  • Coach the client in techniques pertaining to her employees’ retirement readiness
  • Offer analysis on provider fees and services to assess the fairness of plan costs

3. Financial security and asset protection. As important as they are to every client, financial security and asset protection are even more significant to business owners. For example, any disturbance to the client’s business will severely affect the “big picture” of the client’s financial situation. With this in mind, we discuss:

  • Insurance coverage, which includes advanced risk management options
  • Protection against multiple sources of personal and professional liability

4. Succession planning. Every business owner needs to be ready in case of an unfortunate turn of events, such as sudden death or disability, while also being prepared for a more positive future involving their retirement. Our client is no different from other business owners in this respect, and because of this, we develop contingency plans for various scenarios:

  • In the event of death or disability, we propose a life insurance-funded buy-sell agreement. This will assure that an income tax-deferred pool of funds is provided immediately in the case of the owner passing away. Furthermore, a disability buyout policy protects the client if he can no longer run the business due to disability or sickness.
  • When the client retires and wishes to still accrue value on the business she leaves behind, there are a few options for succession, some of which include selling to external purchasers or even existing employees.
  • The client’s children may be ultimately interested in and capable of taking over the business. Due to estate taxes and the planning of estate distribution between children, this option can be complicated. We discuss strategies to minimize taxation such as gifting stock and a family limited partnership.

Planning for Divorce

Planning for Divorce
Client Scenario:
 The client used in this example is a woman with two children who has been married for nine years and is now going through a divorce. She presently has a job with a flexible schedule (to allow time for her children’s needs) and only took a few years' leave when they were born. She bought a home together with her husband seven years ago using the equity they had from their previous residence, a condominium.

Action Plan: Obviously, the most pressing concerns of this client relate to her divorce, and that will take priority over other issues, although there is still her family’s future to discuss as well as her own personal goals.  

1. Costs and earnings. The client is concerned about income and expenses, so our plan addresses the following:

  • Home issues; more specifically, how much value the couple’s house has at the present time, whether the client should keep the home as a primary residence or sell it, and specifics concerning mortgage payments
  • Makes a decision regarding how much spousal support she will be receiving after the divorce and how much weight her present income will carry toward providing for herself and the kids
  • A diversified investment plan caters to different possible outcomes from the divorce

2. Shared assets and estate planning. There will need to be reviews conducted because of the shared assets with the client’s husband after their divorce. The following items relating to her assets, estate, and insurance information are discussed:

  • An extensive review of existing life insurance plan policies, as well as retirement accounts, from which to remove her husband and replace him with her children’s co-beneficiary information
  • Analysis of her children’s individual trusts for any issues regarding their benefits and any needed amendments to her will pertaining to said trusts
  • A closer look at any and all assets brought into the marriage by the client, as well as any acquired during the marriage, since her personal assets would indeed be a part of the divorce process 

3. Retirement strategy. On top of the issues relating to current income and expense concerns, the client wishes to take hours out of her work schedule to care for her children. Retirement savings were previously handled by her husband, and the couple was on track for an early retirement before their divorce. Due to these issues, we further review:

  • All existing accounts and the possibility of splitting their retirement assets in order to create a retirement income strategy for current assets
  • Tax minimization strategies and additional ways to save in order to protect assets for the future (Due to their marriage lasting for less than 10 years, the client wouldn’t receive social security benefits from her husband.)
  • The prospect of taking greater advantage of employer benefits and an increased salary by getting a full-time corporate job for the short term (Not only would this help with retirement plans, but it would help with education expenses for her children.)

Academic Community Members

Planning for Members of the Academic Community
Client Type:
 Professor, married with 2 children

Client Profile: This client’s situation is similar to that of many professors, both male and female. He has worked as a professor for 20+ years, and although he has plans to retire, he would like to continue pursuing independent consulting work to stay in academia.

Action Plan: We would discuss his goals at length and provide a comprehensive review of his finances. His profession brings with it three common issues that impact many professors.

  1. Financial security. Financial security is important to everyone, but in this case, our client is particularly concerned with his future stability. We develop:
    • A complete financial plan that accounts for personal and family goals and considers multiple scenarios, increasing the potential likelihood of goal achievement
    • Income strategies for today and for the future, as they pursue an ideal retirement
    • A properly diversified investment strategy that addresses goals while respecting risk tolerance, providing potential protection during market downturns
  2. Retirement. In addition to his current income and expense concerns, this client is focused on his state pension, social security, and additional retirement accounts. Along with his career as a professor, he also does independent consulting work. We:
    • Suggest having a separate retirement account for his self-employment income and determined a retirement income strategy for existing assets. An important element of this review is making sure that he retains a properly diversified investment portfolio.
    • Explore additional savings vehicles and other tax minimization strategies to protect as much of the asset pool as possible for the future.
  3. Life insurance and long-term care. As our client had a life insurance and long-term care policy independently from the institution, we focus on:
    • The value of a unified financial plan
    • Strategies to protect against potential sources of liability
    • Insurance coverage options, including disability and other advanced risk management options

The precedings are hypothetical case studies and are for illustrative purposes only. Actual performance and results will vary. Past performance is no guarantee of future results. These case studies do not represent actual clients. Any resemblance to actual people or situations is purely coincidental. These case studies do not constitute a recommendation as to the suitability of any investment strategy for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted for your specific situation. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.