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Move from Outsourced CFO to Wealth Management

Let’s talk about moving from CFO to wealth management. A couple of people are saying that it’s completely over their head and they want to know how much in net worth does this stuff actually start to matter? It’s interesting, obviously anyone who’s taxable is my starting answer. If someone is single and they have a business and they’re worth over $8 million. Absolutely. Someone’s married, you have a business and other assets, their total basis is over $23 million. Absolutely. That’s an easy starting point. 

By the way, find those people, get those people. I’ve got to tell you this planning approach, while he’s getting you to be the outsource CFO, it’s setting the stage for the VFO, the virtual family office, where they’re looking to me and you to be these key advisers around their world for global planning issues. If you can get into that position and be comfortable there, and start identifying strategies as the planner, your clientele will go upstream. It’s about moving from CFO to wealth management.

If you’re not already there, it’s just an automatic offshoot of this type of approach and mindset. So, as you do what Andrew is telling you to do, you will catapult up the net worth level of your clientele and you’ll get a couple. I can’t say it enough. That’s how this works. That’s the easy answer too, if you have the higher net worth clients. Absolutely. The exception though is I also have situations where my client today is worth $5 million, but they just started a tech company that we think if we model it out over the next five years, is going to be worth $25 million. 

If you’re getting into the world of people who are not taxable regularly, that is the right world because somewhere in there someone’s going to do well. Someone’s going to sell their business. He’s going to build a portfolio net worth as you help get to their goals. That’s the time to always be thinking about presale planning, planning for that growth over time. That’s what this whole presentation is about. So, if I have a client that has a business that we know is likely to grow over time, we want to include, the kids…have a gift. If in the end, let’s say I split the baby. I go 50% too. I keep 50% and then 2% to a gift trust. I still control the entire principle, so if it did go over the rates in the future, then good for us.

I want to remind everybody what I said earlier. These high rates, these very high exemption rates, these are scheduled to go away in 2026. Number one, number two, who knows what’s going to happen in the election coming up. If you happen to have a more progressive bent in the end and you have left, left, left..you’re going to have this law go back as fast as Trump put it up.

You know, the Democrats, if they control everything, to come right back down to a million dollars, and that’s going to be virtually all of your clients to be taxable. So, it was really just a matter of connecting with your clients and seeing what their situation is. You know, if somebody has a million dollar business, they’re just making money for themselves, they don’t have kids, they don’t have intention to transfer this. Isn’t for them. This isn’t for them. This is planning for clients who are looking at ultimately making a transfer. Where we see appreciation that we can explore it. That’s why moving beyond just a CFO to wealth management gives opportunity.

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