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“ As much as an owner is trying to build a business , when he or she is ready to leave , the person has to have designed a structure that a buyer will want to buy ,” Lom says . “ For instance , a buyer may want key employees to stay with the firm for a certain amount of time .” That can be part of the buy-sell agreement .
A business might otherwise be sold to a trust to limit capital gains taxes , particularly when it is a family situation , with payout provisions to the owners .
“ People talk about mindfulness and intentionality , and if you have the legal agreements in place ahead of time , the exiting owner can consider both the psychological implications and tax implications of a sale ,” Lom says . “ If situations change , the agreements can be changed . A successful sale needs a lot of thought from the financial advisor , the lawyer and the accountant .”
If preplanning is not at the top of a business owner ’ s to-do list , the government is liable to take a bigger bite out of the company profits than necessary , says Robin Patin , wealth manager at Choreo Advisors , a national financial services firm based in Chicago with $ 14.8 billion in AUM . There needs to be a five- to seven-year run-up to any sale .
More companies fail than succeed at getting the best structure , Patin says . “ It sometimes takes years to set up the right tax structure , but it is often difficult for an owner to envision a company without him or her at the helm . I see companies sold all the time where excess taxes are paid because plans were not started soon enough . There is no time machine to turn back the clock to do it right .
“ Business owners are used to being masters of their own destinies , and this is a time when they have to rely on the right team of experts instead ,” he says .
These issues can be overwhelming or paralyzing to someone ready to leave a lifetime of work behind , says Anne Marie Stonich , chief wealth officer with Coldstream Wealth Management , an advisor-owned firm based in the Pacific Northwest .
“ This is the owner ’ s chance to translate a lifetime of built-up value ” into a legacy , Stonich says , “ but the owner has to decide what his ‘ number ’ is . The business owner is fortunate if someone in the family wants to take over , but it is more likely key employees will be ready . The other question that has to be decided is what role the original owner will play in the transition process . These decisions are the things that keep the owner up at night .”
That is why it is important to start thinking of the details years , and not months , ahead of time , Stonich says .
Parting Shot continued from page 60
current needs are met and a plan is in place for their long-term financial success .
What Women Want Versus What They Get
So , is the financial services industry fully meeting the needs of women today ? Research shows there is still room for improvement . A majority of women ( 64 %) surveyed by Boston Consulting Group in 2020 said they felt their wealth management firm needed to improve its value proposition . The two groups that expressed the most discomfort with the status quo were high-net-worth women and women professionals .
The research points to common issues , such as advisors who mainly focus their attention on the male in a client couple or advisors who misjudge a woman ’ s level of comprehension and oversimplify the information they share with her .
Within the predominantly male financial services industry , unconscious bias may cast a long shadow on the client experience for women . When financial professionals make assumptions about a female client ’ s needs or knowledge level , they do her a disservice . An examination of personal biases should be foundational for planners serving clients of any gender .
Serving Breadwinner Women Better
Focusing on improving the client experience for women is simply a smart business strategy . Here are three things advisors can do to make an impact .
• Ease women ’ s time conflicts . Financial professionals serving female breadwinners can help them juggle their professional and personal priorities . This might include using technology to aggregate assets for all-in-one convenience , or recording a video of a financial plan update so a woman can watch it and respond in her own time . It might mean educating clients about the value of their time and helping them identify responsibilities they can delegate or outsource . By encouraging women to share their challenges , advisors can develop person- alized strategies to overcome them .
• Create an intentional approach to counteracting unconscious gender bias through resources such as the CFP Board ’ s new book , The Psychology of Financial Planning . It provides an overview of client and planner attitudes , values and biases as the first order of business , with frank encouragement for financial planners to reflect on their own financial background and biases to build empathy for clients .
• Invest time in building client confidence . Advisors should try to understand the needs of women breadwinners , setting aside assumptions and providing a collaborative space that encourages financial engagement . ( eMoney Advisor has created a webinar , called “ Key Insights into Becoming a Trusted Advisor ,” for additional strategies .)
Women ’ s wealth is undoubtedly on the rise , and our industry has the great opportunity — and great responsibility — to help champion their financial futures .
EMILY KOOCHEL , PH . D ., is the manager of financial wellness at eMoney Advisor .
58 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER 2023 WWW . FA-MAG . COM