Bob J. Baker and his firm Asset Strategies, LLC has created a new Multi-Family Office (”MFO”) to serve the large portion of America’s 8 million millionaires that live in our region. Because more than 10% of these families have estates valued at more than $10 million, the MFO will focus on providing services for this market. The services will include advanced plan design, wealth counseling, wealth blueprinting, and other family office services not typically offered by financial planners, accountants, and lawyers. The MFO can empower a team of advisers who can coordinate the legal and financial tools need to help an affluent family realize its goals and mission.

The MFO will provide a broad array of advanced planning technologies to help transfer wealth tax efficiently from parents (Generation 1) to children or grandchildren (G2 or G3). These techniques can help families avoid the 45% estate tax while passing on their values before they pass on the value of what they own.

Bob has developed a successful wealth advisory business with literally hundreds of high net worth clients who come to him for both tax advice and help with clarifying the values that the clients want to encourage in the next generation. Although clients ask for a broad array of services, Bob has developed his business model around five common needs expressed by clients and staff of family offices:

• One-Stop Family Office Services. Most clients need help in choosing which of over 200 financial services will most help them achieve their goals. A family office should provide all necessary resources through a one-stop planning process. Bob’s Family Office Services firm, like many MFOs, operates as an Investment Adviser Representative while maintaining close affiliations with CPA and law firms. The investment adviser, CPA, and lawyer bring in appropriate insurance and investment professionals to fund trusts and business entities. Each client is served by an advisory team that appoints one adviser to act as a wealth counselor and wealth coach who coordinates all of the other advisory team members. The adviser in the coach role must work as a fee-based fiduciary to maximize client trust and help insure objectivity; however, insurance or investment professionals on the planning team may agree to pay some of the planning fees.
• Zero-Tax Planning. Family office staff members need expertise with zeroing-out unnecessary transfer taxes while reducing capital gains, income, and AMT taxes. Family offices should provide reports to show clients how to reduce taxes while increasing what is available for family needs, retirement security, and favorite charities.
• Vision Funding. Most people, especially those over age 55, are actively thinking about legacy and “casting a shadow beyond the grave.” These clients are looking for the most tax-efficient way to help their spouse, their children and their charities realize a compelling vision. A family office staff should be able to quantify wealth available to help others after clients have provided for their own retirement security. The family office should create and update simple bar charts illustrating how tax savings can fund a vision for providing more resources to family and charity.
• Wealth Counseling. Parents appreciate the wisdom of passing on their values to their heirs before they pass on the value of what they own. This requires that the family office unite the father and mother around a shared vision for passing ownership, management, and control responsibilities to heirs. Specifically, each of these stages needs to occur at the right time according to proven stewardship principles. Although studies show that 4 out of every 5 heirs of wealthy families will not manage their inheritance wisely, a family office should provide access to Wealth Counselors who can help heirs beat the odds. Wealth Counselors use proven techniques to help clients resolve conflicts and unite family members around a shared vision for using wealth to leave a lasting legacy. The best wealth counselors create “ethical wills” or “Family Wealth Statements” that guide family members when attending family meetings or making decisions about how to use inherited wealth.
• Wealth Blueprinting. A typical client wants to work with advisers who can integrate any of over 300 financial tools to achieve a broad array of personal goals. Funding and administering these tools requires millions of decisions. The 21st century adviser must know how to address all of these issues when developing an effective plan! Ideally, the solutions should be summarized on a one-page flow chart with all necessary supporting calculations and explanations. Advisers must have a way to update the flow chart in response to changing tax laws, goals, asset values, or cash flows. Planning techniques should be integrated into a “Blueprint” that provides clear solutions to financial planning, investment management, tax planning, tax preparation, insurance, estate planning, and charitable giving issues. The planning process should recommend the optimal mix of planning tools, identify the best assets to fund each planning tool, and summarize all planning recommendations on one flow chart, “the blueprint” supported by fully-integrated annual cash flow numbers and accurate projections of increased wealth available for funding a family’s vision.

According to respected industry consultant, Mark Hurley, firms that provide comprehensive financial solutions of the type listed above will be the “future dominant competitors.”[1] Although attorneys, CPAs, bankers, money managers, insurance agents, and traditional financial planners now compete to be the most respected adviser in the high net worth market, very few of these advisers have the tools, experience, and resources to provide clients with the convenient “one stop shopping” access to comprehensive planning resources most requested by high net worth clients.

Bob can be contacted at bob@assetstrategiesonline.com or via the firm’s website at www.assetstrategiesonline.com [1] Mark Hurley, “The Future of the Financial Advisory Business and the Delivery of Advice to the Semi-Affluent Investor” published at www.undiscoveredmanagers.com, September, 1999, page 36.

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© 2008 Asset Strategies, LLC