© tim voorhees, jd, mba 1996-2005 1 best practices session d updated 2/7/2005 conducting discovery...

© Tim Voorhees, JD, MBA 1996-2005

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Best Practices Session D Updated 2/7/2005

Conducting Discovery Sessions and Client

Retreats


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1. Engaging clients2. Asking practice management

questions3. Discussing goals and tools 4. Upgrading a Discovery Session

into a Retreat5. Conducting a Retreat6. Differentiating Personal,

Corporate, and Family Wealth Planning

7. Addressing challenging situations8. Drafting a Family Wealth

Statement9. Accessing the best resources


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Access Seven Levels of Service


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Provide Clear Value Before

Upgrading the Level of Service

Offer an optional Family Retreat and Family Wealth Statement (for $3,500+) before agreeing to do the VPL.

Begin with the Free Discovery Session

Tim Voorhees, JD, MBA, 1996-2005

During the Discovery Session decide which deliverables are most needed and

who will prepare the deliverable•Family Wealth Statement (Counselor)

•Financial Checkup (Analyst)

•Value Proposition Letter (Planners)

•Tactical Plan (Planners, Adviser Coordinator, and Binder Publisher)

•Comprehensive Plan (Planners, Adviser Coordinator, and Binder Publisher)

•Legal, Insurance, & Investment Implementation (Licensed Implementers)

•Annual Updates (Evaluator/Educator)


Phase 1 Phase 2

Typically offer needed deliverables during four phases

Phase 3 Phase 4

Family Wealth Statement

Financial Checkup

Value Proposition Letter

Tactical Plan

Comprehensive Plan

Legal, Insurance, & Investment Implementation

Annual Updates


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1. Engaging clients for retreats2. Asking practice management







Questions

Who has the retail engagement to….1. Conduct the Phase 1 Discovery

Session and Prepare the Value Proposition Letter?

2. Conduct the Phase 1 Retreat and prepare the Family Wealth Statement?

3. Present the Phase 2 plan?


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The Biggest Producers Leave Phase 1 and Phase 2 to

Channel Members• It is most profitable when you focus

entirely on Phase 3 implementation of investment and insurance tools.

• If a VFOS Channel Member works with your client to complete Phase 1 and 2 deliverables, we maximize the likelihood that Phase 3 investment and insurance tools will be implemented through you.


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Requirements before you can deliver our deliverables with VFOS only acting as a back

office for you:• You must believe that it is a good

use of your time to go through the training.

• You must complete Best Practices and Best Tools training and sign our Allied Adviser Agreement to access Phase 1 deliverables at wholesale costs.


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Goals of the Discovery Sessions

• Attract prospects -- create referrals• Convert prospects to clients• Deliver indispensable value• Turn clients into lifelong partners• Establish a foundation for Wealth

Blueprinting• Help clients review 300 tools x 200

services to achieve 100 goals: 6 Million options!


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WORKSHOP TOOLS LISTED BELOW Common Application Target Net worth

Aircraft Acquisition Strategy Business planning 10 million + Y N Y Y Y Y Y N Y N Y Y Y

Charitable LLC Wealth Transfer 10 million + Y Y Y Y Y Y Y Y Y Y Y Y Y

Contingent Swap Income Tax Planning 10 million + Y Y N Y Y Y N N N N N N N

Costless Collar Income Tax Planning 5 million + N N N Y N Y N N N N N N N

Employee Stock Ownership Plan Wealth Transfer 10 million + Y Y Y Y Y Y N Y Y Y Y N N

Exchange Fund Wealth Transfer 5 million + Y Y N Y N N N N N N N N N

Family Split Dollar Wealth Transfer 5 million + N N N N N Y N Y Y Y N N N

Flip CRT Income Tax Planning 3 million + Y Y Y Y Y Y Y N Y N Y Y Y

Hedge Fund Investment Planning 5 million + Y Y N Y N N N N N N N N N

Investor Play Basket Investment Planning 5 million + Y Y Y Y Y Y Y Y Y Y Y N N

Leveraged Retirement Distribution Technique Wealth Transfer 5 million + Y N Y N Y Y N Y Y Y Y N N

Non-Qualified Stock Option Strategies Income Tax Planning 5 million + Y Y Y Y Y N Y N N N Y N N

Offshore Insurance Investment Planning 5 million + Y Y Y Y Y Y N Y Y Y Y N N

Private Equity Investment Planning 5 million + N Y N Y Y Y Y N N N Y Y Y

Receivable Asset Monetization Investment Planning 5 million + Y Y N Y Y Y Y N N N Y N N

Re-Engineered Corporate Balance Sheet Corporate Finance 100 million + Y N N N N N N N N N N N N

SERP SWAP Wealth Transfer 3 million + Y N Y N Y Y N Y Y Y Y N N

Pension Distribution Strategy Wealth Transfer 3 million + Y N Y N Y Y N Y Y Y Y N N

Stretch IRA Wealth Transfer 3 million + Y Y Y N N N N Y N N Y N N

Super CLAT Income Tax Planning 3 million + Y N Y N Y N Y Y Y N Y Y Y

Synthetic Equity Income Tax Planning 10 million + Y Y Y Y Y Y N Y Y Y Y N N

Tax-Free CRT Distributions Charitable Planning 5 million + Y N Y Y N Y Y Y N N N Y Y

Tax-Free S Corporation Sale Strategy Income Tax Planning 5 million + Y Y Y Y N Y N Y Y N Y N N

Unitrust Limited Partnership Income Tax Planning 5 million + Y Y Y N Y Y Y Y N N Y Y Y

Tools/Benefits Grid

A partial list of tools and goals


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1031 Exchange 0 0 3 0 0 0 2 0 2 0 1 1 1 2 2 1 2 0 0 2 01035 Exchange 0 0 3 0 3 0 2 0 2 0 1 1 1 1 2 1 3 1 1 2 3402(e) Rollover 0 0 0 3 0 0 0 0 2 0 0 0 0 0 0 0 0 0 3 2 0412(i) with sale to Family Entity 0 3 3 0 0 3 0 1 0 0 0 2 2 2 1 0 0 1 3 1 0412(i) with rollout to Participant 0 3 3 2 0 0 3 1 0 0 0 1 1 1 1 0 0 0 3 1 0Aircraft Acquisition Strategy 3 0 0 0 2 1 0 1 1 0 2 0 1 0 3 2 1 0 0 3 0Accounts Receivable Financing 0 0 3 3 0 1 3 3 0 0 1 1 2 2 2 0 2 0 0 1 0Asset Allocation 0 0 0 0 1 0 3 0 0 0 0 0 0 0 1 0 3 0 0 1 0Charitable Gift Annuity, Deferred 3 0 2 3 3 3 2 3 3 3 3 1 2 1 1 2 2 1 1 0 0Charitable Gift Annuity, Immediate 3 0 1 3 3 3 0 2 3 2 1 1 2 1 1 2 2 1 1 0 0Charitable Gift Subject to Life Estate 2 0 0 0 0 3 0 1 3 1 3 1 2 1 1 2 2 1 1 2 1Charitable Limited Liability Company 3 0 0 0 3 3 0 3 3 2 2 1 2 2 2 3 2 1 1 1 1Charitable Remainder Unitrust, Standard (SCRUT) 2 0 1 1 3 3 2 1 2 0 3 2 1 0 1 3 2 0 0 1 0Charitable Remainder Unitrust, Standard with Wealth Replacement 2 0 1 1 3 3 1 2 2 1 3 2 1 0 1 3 3 0 0 1 0Charitable Remainder Unitrust, Net Income with Makeup (NIMCRUT) 2 0 1 1 3 3 2 2 2 1 3 2 1 0 1 3 3 0 0 1 0Charitable Remainder Unitrust, with Flip Provision (Flip CRT) 2 0 1 1 3 3 2 2 3 1 3 2 1 0 1 3 3 0 0 1 0Charitable Remainder Unitrust, with private stock redemption 2 0 1 1 3 3 1 2 3 1 3 2 1 3 1 3 3 0 0 1 0Charitable Remainder Annuity Trust (CRAT) 2 0 0 1 3 3 0 2 3 1 3 2 1 0 1 3 3 0 0 1 0Charitable Lead Annuity Trust, Grantor (GCLAT) 3 3 0 0 0 2 0 2 0 3 2 1 1 0 1 3 1 0 0 1 0Charitable Lead Annuity Trust, Nongrantor (CLAT) 0 0 0 0 0 3 0 2 0 3 2 1 1 1 0 3 1 0 0 1 0Charitable Lead Annuity Trust, Super CLAT 3 0 0 0 2 3 0 2 0 3 2 1 1 0 0 3 1 0 0 1 0Charitable Lead Unitrust, Grantor (GCLUT) 3 3 0 0 0 2 0 2 0 3 2 1 1 0 1 3 1 0 0 1 0Charitable Lead Unitrust, Nongrantor (CLUT) 0 0 0 0 0 3 0 2 0 3 2 1 1 1 0 3 1 0 0 1 0Common Trust Fund 3 3 1 0 3 0 2 1 2 1 1 0 1 0 1 0 2 0 0 1 0Costless Collar 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Defined Benefit Pension Plan 0 3 3 0 0 0 3 3 0 0 1 1 1 1 3 0 2 0 0 1 0Disability Income Trust 0 3 3 0 0 0 3 2 0 0 1 0 0 1 3 0 2 0 0 0 0Dynasty Trust 0 0 0 0 0 3 0 3 0 0 0 2 1 2 0 0 0 0 0 2 0Education Trust 0 0 0 0 0 1 1 2 0 0 0 2 1 0 0 0 0 0 0 0 0Leveraged Employee Stock Ownership Plan with Synthetic Equity 0 3 1 1 3 3 1 2 2 1 1 2 1 3 0 0 3 0 0 2 3

Key3 indicates a primary benefit. A major reason that someone would implement this strategy.2 indicates a secondary benefit--not the only reason but a plus in the decision-making process1 indicates an ancillary benefit--not a significant positive or negative factor.0 indicates the benefit is irrelevant to the strategy or the strategy may actually be a detriment.

Tools/Benefits Grid (partial)


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Summarize the Value Proposition sample diagram

CurrentCurrent ProposedProposed

Estate Taxes $14,300,000 $100,000

Benefit to Heirs

$15,200,000 $18,900,000

Income Tax Savings

$0 $200,000

Benefit to Charity

$0 $21,300,000

Example:


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Provide Clear Value Before Upgrading the Level of Service

Offer an optional Family Retreat and Family Wealth Statement (for $3,500+) before agreeing to do the VPL.

Upgrading a Discovery Session into a Retreat


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Integrating Retreats into Your Practice

• Offer a service not available elsewhere in your community.

• Cover Discovery Session materials in much greater details.

• Deliver indispensable value• Turn clients into lifelong partners• Establish a foundation for Wealth

Blueprinting• Address issues that can only be

addressed in a 4-6 hour session.


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Learning from the Models

• Scott Fithian – The Family Financial Philosophy

• Jay Link – Family Wealth Letter of Intent

• Scott Farnsworth – Family Wealth Declaration

• Esperti Peterson – Discovery Document• Tim Voorhees – Family Wealth

Statement


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Developing Wealth Counseling Skills?

• Understanding both the emotional and technical issues

• Drawing out the client’s purpose• Briefly explaining relevant planning tools• Mediating conflicts efficiently• Facilitating interaction of retreat

attendees


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Identifying the Right Clients

• Choosing the right clients • Considering influence of existing

advisers• Understanding dysfunctional

environments • Involving children in the retreat

process• Screening for emotional issues or

potential litigation


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Explaining the Process

• Deciding which advisers will provide wise counsel

• Sharing case histories of successful families

• Giving references if necessary• Discussing roles of existing advisers • Obtaining a commitment of time and

money• Scheduling a retreat


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Motivating Clients to Schedule a Retreat

• Executive Officer and Emotional Officer need agreement

• One day in a lifetime• The Power of Purpose: Genesis 11:6• The need to overcome problems

– Affluenza– Lawsuit risks– Etc.


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Establishing the Price

• Explain how the cost is much less than the benefits

• Discuss business topics to qualify for deduction

• Choose the appropriate engagement letter


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Preparing the Client

• Husband and wife complete the questionnaires separately

• Husband and wife should not compare notes

• Urge the client to schedule at least a half day without interruptions.

― Schedule 4 to 6 hours for the retreat ― Schedule ample time after the

retreat


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Preceding the First Retreat

• Prepare the client(s)• Choose a location • Decide which family members to

include• Schedule one or two days• Bring an assistant• Prepare an agenda• Prepare a list of questions


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During the Retreat • Discuss the power of purpose and mission• Review questions• Use Soft Data Questionnaire• Prepare custom list of questions

− Examine common problems for families with wealth

− Clarify who owns what. Address emotional ownership versus legal ownership

− Look for common communication and trust breakdowns

− Spot indications that family members lack a common mission

− Spot differing, but undisclosed, standards− Look for unprepared heirs


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Story-telling

• Harness emotional energy• Encourage a free-flowing discussion • Cover all the questions without

sticking to a rigid agenda.• Reflect on who inspired husband

and wife they were 10 years old. • Clarify a story that has a beginning

in youth, positive influence today, and great hope for the future.


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Bonding with the Client

• Listening to the client's personal history• Connecting to the client’s current

opportunities and threats• Inspiring the client to build on strengths

and overcome weaknesses• Uniting family members around a

common vision • Clarifying “WOTS MOST IMPORTANT?”


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Family Wealth Planning Blends Personal and Corporate

PlanningPERSONAL

PLANNING FAMILY WEALTH

PLANNINGCORPORATEPLANNING

Passions/ Purpose/ Priorities

Vision for Shared

Purposes

Vision/ Mission/

Objectives

Personal Prayer

Process Management

Principles Principles Creed

Planning Resources

Benefits for Beneficiaries

Profits/Losses

LegacyLegacy Directives

Succession Plan


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Personal Planning Paradigm:

Passions, Purpose, Priorities, Planning Resources, and Planning Tools

Your Planning Resources


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Clarifying Planning Resources

• Review financial capital− Before and after bar charts− Control over financial and social capital

• Uncover emotional resources− Empowering through a family mission− Addressing conflicts

• Discuss spiritual resources− The power of purpose− The harmony of principles− The impact of a legacy

• Identify wasted social capital• Identify valuable intellectual capital


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Explaining Benefits of the Planning Tools

• Clarifying root issues and suggesting financial, legal, or tax tools

• Integrating tools to create a zero-tax plan

• Drafting documents in light of spiritual, intellectual, emotional, and other issues


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Matching Planning Tools with Benefits

• See the tools/benefits grid• See the sample plans• Discuss scenarios

• Income tax deductions this year?• Exercising stock options?• Making lifetime wealth transfers?• Etcetera


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Personal

• Passions

• Purpose

• Priorities

• Principles (Cardinal Virtues)

Corporate

• Vision

• Mission

• Objectives

• Creed (Core Values)


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Corporate Planning Paradigm:

WOTS MOST IMPORTANT?• Review the Weaknesses, Opportunities, Threats, and

Strengths (“WOTS”)

• Clarify the Mission, Objectives, Strategies, and Tactics (“MOST”).

MISSIONOBJECTIVESSTRATEGIESTACTICS

™


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Family Wealth Planning Paradigm: Vision, Mission, and Shared Purposes

• Vision is bigger than mission• Mission is coalesced from individual purpose

statements• Mission is a summary of shared purposes• Mission Statement has 3 critical elements

− Who we are− What we do− Whom we serve

• Purpose Statements are individual and often hard to define but purpose statements should be defined before preceding with Family Wealth Planning.

Proverbs 20:5 - The purposes of a man's heart are deep waters, but a man of understanding draws them out.


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Family Wealth Planning Blends Personal and Corporate

PlanningPERSONAL

PLANNING FAMILY WEALTH

PLANNINGCORPORATEPLANNING

Passions/ Purpose/ Priorities

Vision for Shared Purposes

(Summarized in a Family Mission)

Vision/ Mission/ Objectives

Personal Prayer Process Management

Principles Principles Creed

Planning Resources

Benefits for Beneficiaries

Profits/Losses

Legacy Legacy Directives Succession Plan


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7. Addressing challenging situations

8. Drafting a Family Wealth Statement

9. Accessing the best resources


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Picking Scabs?• Does somebody refuse to develop a

mission and vision?• Is somebody avoiding accountability?• Is somebody undermining the family?

(See, e.g., Proverbs 6:16-19)

BEHAVIOR EXAMPLEHaughty eyes Unwilling to listen to counselA lying tongue Misrepresenting factsHands that shed innocent blood Slandering associates or leadersA heart that devises wicked schemes Cheating on taxesFeet that are quick to rush into evil Compromising corporate vision and objectives for personal gainA false witness who pours out lies Bad-mouthingA man who stirs up dissension Engaging in peace-breaking and peace- faking rather than peacemaking


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Addressing Challenging Situations

• The disinherited child• The child from a past relationship• Sons fighting for control of the

family business• Unmotivated kids• Intra-family lawsuits


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Involving Professional Help

• Wealth Counselor Network• Peacemaker Ministries – Certified

Christian Conciliators™• Others

− Roy Williams− Rick Harig− Etc.


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Collecting Relevant Documents

• Ideally have balance sheet before retreat begins

• Get commitments during the retreat to collect documents

• Get permission to work with CPA to gather documents


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Preparing the Client for After the Retreat

• Discuss phases of the CAPABLE model • Offer ideas about forming a team with

unique abilities relevant to the client• Discuss roles of insurance agent,

attorney, CPA, and other existing advisers.

• Establish checks and balances for team members


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Following the First Retreat

• Develop Family Wealth Statement and goal statement

• Prepare report card to show if current plan achieves goals

• Prepare Value Proposition Letter• Prepare the family for periodic

Family Meetings


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Drafting the Family Wealth Statement

• Develop a meaningful structure• Use Covenant model?

− Purpose− Process− Principles− Beneficiaries− Vision and Directives


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Clarifying the Purpose• Start by reflecting back statements

that impassion the client• Crystallize statements about passion

into a purpose• Meld purpose statements into a Family

Mission• Be sure that family members have

ownership in the mission


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The Purpose Statement is Important Because It…

• Inspires unity• Articulates unique characteristics• Clarifies functions• Establishes direction• Guides decision-making• Shapes strategy• Enhances effectiveness• Facilitates evaluation• Focuses the future• Summarizes complex concepts

concisely• Promotes long-term thinking


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Affirming Principles in the FWS

• Financial Security• Wealth Accumulation• Cash Flow and Income• Budgeting• Liquidity • Investment Time

Horizons• Taxes• Charitable gifts of

money• Charitable gifts of time• Diversification• Education funding

• Control• Complexity• Risk Management

and insurance• Asset Protection• Trustee and

fiduciary selection• Loans to family

members and close friends

• Providing for medical needs

• Retirement planning

• Grant-making• Stewardship

training


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Writing the FWS Efficiently• Use boilerplate templates • Use color-coding• Code the husband’s answers in blue, code

wife’s answers in pink, and code similar answers in yellow

• Develop pink-blue-yellow “PBY” document• Combine His and Her answers • Add in retreat notes using a colored font• Use the client’s actual words• Reference trustee, executor, guardian, and

beneficiary language in legal documents


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Preparing the Family for Meetings Following the

First Retreat • Conducting investment seminars• Training board members• Providing stewardship education• Clarifying authority, power, and

influence• Using observable and measurable

standards• Tracking success in realizing goals• Updating the Financial Checkup and VPL


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Access Seven Levels of Service


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Best Practices CD - Session D Resources

4 Case Study: CRT5 Case Study: Super CLAT6 Case Study: ESOP7 Case Study: GDOT8 Case Study- Comprehensive Family Wealth Blueprint9 Engagement Kit Soft Data Questionnaire10 Engagement Kit Hard Data Questionnaire - Long34 Short Soft Data Fact finder35 Short Hard Data Fact finder36 Qualified Plan Fact finder40 200 Tools List


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Best Practices CD - Session D Resources

41 100 Goals List42 70 Best Tools Descriptions44 Tools Benefit Grid - Simple45 Tools Benefit Grid - Comprehensive71 How to charge fees (article)89 Prospecting Letter - Discovery Session 114 Best Practices Session D119 Consent to Share Info - Permission Grid124 Steps to develop Family Wealth Statement240 Follow-up Letter -- offer retreat309 Conducting a Family Retreat812 FAQs regarding free Discovery Sessions


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Best Practices Training

Session AAdapting to Planning Trends and Presenting Valuable Deliverables to Clients

Session B Charging Fees and Using Appropriate Engagement Letters

Session CDelegating Technical Work to a Virtual Back Office and Advanced Sales Department

Session DDeveloping the Value Proposition Letter after a Discovery Session, and Preparing the Family Wealth Statement During/After a Client Retreat

Session EDeveloping Relationships With CPAs, Bankers, Lawyers, Charitable Development Officers, and Other Referral Sources

Session FPresenting Your Materials During Client Seminars, Training Workshops, and One-On-One Presentations

Session GComplying with IRS, SEC, NASD, AICPA, ABA, FPA, and Other Relevant Guidelines

Session HFocusing on Your Unique Talents by Delegating “Administrivia” to a Relationship Manager

Session IConducting a Strategy Session to Integrate Tools Needed to Achieve All of Your Clients' Wealth Optimization Goals

Session JTracking cases and portfolios with web-based project management and CRM systems


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Phone: 800-447-7090 (949-453-2900 in CA)

Fax: 866-447-7090Voicemail: 877-447-7090Email: [email protected]

Contacting Family Office Services

© tim voorhees, jd, mba 1996-2005 1 best practices session d updated 2/7/2005 conducting discovery...

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