These stories describe our work on a variety of different engagements. The summaries focus on our findings and activities in the first few years of each engagement.
A common theme in the stories is that many of our clients had very experienced attorneys, accountants, investment advisors before engaging us. Yet, we were still able to find many untapped opportunities. Occasionally, we also found mistakes, and not because their specialty advisors had given poor advice, but because they were working in silos without the benefit of the whole picture or the visibility to analyze the interactions among the different planning areas (investments, tax, estate planning, family dynamics, etc.)
Prior to our becoming involved, the families lacked a comprehensive strategy for managing their wealth. The planning that was done was a series of individual decisions that lacked a cohesive strategy and direction. In many cases, the families’ prior investment advisors were subject to conflicts of interest that affected the quality of advice that the family received—for example, the investment portfolios were heavily invested in proprietary products that were not performing well but generating extra fees for the advisor.
Another recurring theme is our focus on the financial skills of the next generation.
CEO of a Public Company
This family has a large and complex balance sheet, and they had the benefit of excellent advisors for many years before bringing us in to lead the team.
We were able to add value in the following ways:
- Wealth management strategy – We worked with the CEO and his family to define a customized and comprehensive wealth management strategy for the family’s assets. We also showed them how to measure their progress and test recommendations.
- Investment strategy and risk management – The family had many investment managers, but no over-arching investment strategy and no investment risk management strategy. Now they have a comprehensive investment strategy and improved net returns from their investments.
- Tax optimization – The family had no system for collecting and analyzing tax information throughout the year. Consequently, tax planning was based on guesswork and was being done too late to be effective. We designed and implemented a comprehensive tax planning system that we now use throughout each year.
- Long-term planning – Based on our recommendations, the family has made many changes to their estate plan to better align the plan with the family’s long term wealth management goals.
- Private investments – The family has made more than 100 private investments in various companies and real estate ventures. Many lacked proper documentation. We created an electronic document library that the family office staff and all of the client’s advisors can access. All documentation is now up-to-date.
- Business agreements – The buy-sell agreements for many of the family’s private investments contained provisions that were no longer suitable. We recommended a completely different approach to deal with this problem, and we managed the implementation of new agreements.
- Family compound – The family vacation compound, which includes very valuable real estate, lacked an adequate long-term financial plan and governance structure. We recommended and implemented a strategy to address these needs.
- Charitable giving – We worked with members of the next generation and the staff of the family’s private foundation to involve the next generation in the foundation and develop their financial skills in the process.
- Family meetings – The family’s key advisors now meet regularly with the family to discuss strategy, and identify opportunities. The Ballentine Partners’ Client Advisor assigned to the family prepares the agendas, chairs the meetings, and manages the family’s team of advisors. Members of the next generation are starting to participate in these meetings as part of their education process.
To learn more about how we can work with you and your family, contact us.
Sale of a Privately-Owned Company
This client engaged us in anticipation that she would try to sell her privately-owned company within three years. She wanted to take advantage of financial planning opportunities before the sale, and prepare to live off portfolio income after the sale.
Prior to the sale of the privately-owned company we:
- Helped her to identify and engage an investment banker who later found a buyer who paid more for the company than our client ever expected;
- Worked with our client’s tax attorney and life insurance agent to completely overhaul the client’s estate plan and life insurance arrangements;
- Helped her to transfer a sizeable chunk of the privately-owned company’s value to a trust for the benefit of family members without incurring any gift tax;
- Worked with the investment banker to structure the sale so as to maximize our client’s after-tax wealth, and to maximize the portion of the sales price that would be paid in cash;
- Restructured our client’s investment portfolio by terminating managers who were not producing any value in excess of their fees, and improving the risk management process within the portfolio; and
- Helped our client to prepare for the transition from living on earned income to living on portfolio income.
Since the sale, we have:
- Overseen the management of our client’s total investment assets, including assets being managed by various investment firms;
- Helped our client to smoothly transition to living on portfolio income;
- Helped our client to evaluate a wide range of direct investment opportunities; and
- Worked with an attorney who specializes in negotiating executive employment agreements to negotiate a new employment agreement for our client.
To learn more about the services we offer to our client families, read more details about what we do.
The family is a member of the third generation in an inherited wealth situation. Most of the family’s wealth is now held by long-term trusts that were established by previous generations.
We have added value to this family with inherited wealth by:
- Redesigning the investment strategies of various trusts to make the trusts far more tax-efficient. When we began working on this inherited wealth situation, the tax-efficiency of the investment portfolios was quite poor.
- Helping the family design and implement a social impact investment program for a portion of their investment assets.
- Developing and implementing a cash flow planning system to help the family manage its cash flow.
- Assisting the head of the family with advice about his real estate business, business agreements, risk management, and dealing with his investors.
- Working with members of the next generation to develop their financial skills.
- Providing advice to members of the extended family about family meetings, and governance of the family’s business enterprises.
- Providing advice about the management and governance of the family’s vacation compound.
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These one-page snapshots – Ballentine Briefs – highlight ways in which we have been helpful in specific client engagements. Each of these is just a small piece of what we have done and continue to do for these families. You may find that you identify with one of the case studies, or with several. This is not unusual in our experience; families with significant resources often have very complicated financial situations and work with us across a range of issues.