Financial Planning: Building your Wealth

Presented by Mark GroesbeckCFP®, ChFC®, CLU®10/27/09

Mark Groesbeck

• Senior Vice President with the Wealth Management Group of Abshier Webb Donnelly & Baker

• Certified Financial Planner, Chartered Financial Consultant and Chartered Life Underwriter

• Named one of the top advisors in state of Texas by Reuters AdvicePoint and one of the top 250 Wealth Advisors in the country by Worth magazine

Economic Overview

• Financial crisis has impacted all areas of business• Unemployment continues to grow, long term

recovery• Traditional methods of accessing capital are

strained• Uncertain tax situation for individuals• Stock market has improved since March 2009

but…. • Real estate troubles still ahead?• The impact of healthcare reform

What is financial planning?

• Dynamic process to achieve & maintain financial security

• Gather client data• Identify Client’s goals• Analyze & evaluate current situation• Develop planning recommendations • Implement the financial plan• Monitor financial plan at least once a year to

measure success• IT IS A PROCESS NOT A PRODUCT

What is in a plan?

• Summary of current financial situation• Business Planning• Retirement Planning• Estate Planning• Insurance Analysis (risk management)• Education Planning• Investment Planning• FOLLOW A “PRIORITIZED” ACTION LIST

Personal And Business Goals

• Summary of current financial situation– Take inventory of what you have personally and in

business and establish goals for both

• Retirement Planning– What age? Lifestyle? Debt Free? What will you do

next? What type of retirement plan should you fund?

• Estate Planning– Business succession, care for family, reduce tax

(probate, federal estate, state inheritance), charitable trusts, inheritance

Personal And Business Goals (cont.)

• Business Planning– Tax Planning & Benefits, Investment banking

• Insurance Analysis– Initial liquidity, income to survivors, buy/sell,

estate preservation, disability, long term care

• Education Planning– Transfer of assets, 529 plans

• Investment Planning– Tax deferred, alternative investments, coordinated

plan tied to risk tolerance. Maintain proper liquidity

Business Planning

• Tax Planning– Proper business structure (C or S Corporation, LLC

or Partnership); Income shifting ideas – work closely with CPA for guidance.

• Employee Benefits– Retirement plans, insurance protection for

employees (Life, Health, Disability, Special needs products)

• Plans for owners– Non Qualified Deferred Compensation, COLI

Business Planning (cont.)

• Administration and Protection– Workers’ compensation, unemployment claims

management and regulatory compliance assistance, as well as HR support

• Investment Banking– Capital needs (mezzanine financing, IPO, etc),

merger or acquisition, recapitalizations, business valuations, litigation support

• Business Succession Plan– passing business to family, key employees or going

public. Buy/Sell agreements could be helpful for death or disability planning (properly arranged and funded)

Retirement Planning

• What age to retire or slow down? • Lifestyle? How much you spend impacts capital

accumulation goal• Debt Free? There are tax advantages to

mortgages, but what about your peace of mind?• What will you do with your time? Charitable

work? Teach? Go back to college? Travel? Play with grandchildren?

• Do you have a company retirement plan? What plans allow the largest deductible contributions? ERISA based plans and IRAs provide asset protection

• Do you stay in your current home? Texas homestead exemption provides asset protection

Estate Planning

• Business succession• Care for family• Reduce tax (probate, federal estate, state

inheritance)• Charitable trusts• Do you expect an inheritance?• Generation skipping trusts• Irrevocable Life Insurance Trusts (ILITs)• Family Limited Partnerships and LLCs provide

creditor protection• Offshore trusts

Insurance

LIFE INSURANCE• Initial liquidity: Pay mortgage off? Lump sum

fund education? • Income to survivors: builds capital to provide

income• Buy/sell: Provides liquidity to sell company• Estate preservation: Protects estate shrinkage• Cash Value life insurance & annuities are

protected assets• Term insurance could be “cheaper” solution BUT

it depends on goal

Insurance (cont.)

OTHER INSURANCE• Disability: Provides income to individual, can

provide business with income or fund a disability buy/sell

• Long term care for self and/or for parents. Could be “rider” on life insurance.

• Malpractice: Protects your future• Umbrella Liability Insurance: Tied to home and

auto policies

Education Planning

• Transfer of assets or income to children: UTMA accounts, let kids own depreciated equipment and lease back to your company (consult CPA)

• 529 plans: outside of your estate, you maintain control. Make annual gifts to children and grandchildren, creditor protection

• Children work in business: better than paying an allowance

• Multi-generational planning, keeping vision alive• Irrevocable living trusts (creditor protection)

Investments

• Emergency cash resources: personal and business

• Determine Allocation: stocks, bonds, cash, etc.

• Mutual funds vs. Exchange Traded Funds (ETFs)

• Alternative Investments: Real estate, Oil & Gas, Hedge Funds

• Variable Annuities: “personal pension plans”, no limit to contributions, asset protection, living benefits

Benefits of Financial Planning

• Establishing financial goals to direct your actions• Financial peace of mind is gained by taking

control• Understanding how your actions today could

impact your financial future. Coordinated implementation of strategies increases chances of success

• The time to plan is before there is a crisis• Protects your income and wealth for the future• Take Charge!

Questions & Answers

For More Information:For More Information:

Mark Groesbeck713-920-9011

M.Groesbeck@awdbpartners.comor

Anthony Grijalva(713) 235-8204

agrijalva@gnapartners.comwww.gnapartners.com