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Bridging the Gap: Why Planning Before Your Liquidity Event or Transfer Matters

February 16, 2018


You learn a lot in a decade.  For you (yes, you!), what Vance Barse learned over roughly a decade of consulting top-ranked private wealth and retail financial advisors may not only pique your interest, it may help you keep more of your hard-earned money.   


Mr. Barse’s clients were financial advisors at wirehouses such as Merrill Lynch, Morgan Stanley, & UBS; independent broker-dealers such as LPL, Ameriprise, & Raymond James; registered investment advisors; and, last, but certainly not least, family offices. 


Why is this important for you?  Because Vance is a wealth of knowledge (pun intended) on the services and strategies financial advisors offer – and, perhaps more importantly, the services and strategies they often don’t offer.  As Vance will tell you, not all financial advisors are the same: who you have serving you can potentially make a big difference, particularly when it comes to planning strategies for business owners like you.


Ask yourself the following questions:  Does my financial planner work alongside my estate planning attorney to develop my overall estate planning strategy?  Does my financial planner ask for my tax returns and specifically show me how my tax returns drive the development of my overall financial plan?  Does my financial planner work with my CPA to implement the tax alleviation strategies for which I am eligible and reduce my tax burden?  Am I one of the “lucky” business owners whose net worth is tied up in my business and real estate and I’m not sure how a financial planner can bring value to my situation because I don’t have liquid investments?  Or, given current valuations of stocks, real estate, and yes—even bonds—has my financial planner spoken with me about investment strategies that have historically helped to reduce downside risk in periods like the Credit Crisis of ‘08 or the Tech Wreck of ‘00 – ‘02 (assuming capital preservation is part of my objective)? 


Most executives like you have a financial person, but depending on your answers to the questions above, there may be planning and tax alleviation strategies that have not been implemented on your behalf. 


Vance has shared his four thought-provoking observations from his career of advising financial advisors, which are:

  • The financial services industry is rife with potential conflicts of interest.

  • Too many advisors care about one thing only: just gathering more assets.

  • Often times, a large gap exists between the tax world and investment world.

  • Many advisors don’t offer truly comprehensive planning for business owners and high-net-worth estates.

After years of service in his prior role, Mr. Barse decided to bring his expertise directly to select individuals and families and fill in the gaps that often exist due to inadequate planning.  We have invited Vance to host an invitation-only webinar on March 22nd titled “Tax Alleviation and Wealth Preservation Strategies for Business Owners: Planning Starts Well Before the Liquidity Event or Transfer.”  I know, boring stuff, but the impact can be exciting.  Vance will be introducing several of the strategies that may be impactful for business owners and executives like you.  To register, please use this link.


In the interim between now and the March 22nd webinar, Vance wanted to share the following article, “The 19 Questions to Ask Your Financial Advisor,” authored by Jason Zweig and published on August 25th, 2017.  In Vance’s opinion, this should be required reading for anyone who has a financial advisor, is considering retaining one, or who simply wants to get a second opinion. 


Getting all stockbrokers, financial planners and insurance agents to act in the best interests of their clients is a struggle that financial firms and their regulators still haven’t resolved. That should be their job — but for now, it’s yours.


The obligation of those who give investment advice to serve clients, not themselves, is called fiduciary duty. That obligation is far from universal and, in some ways, is in retreat.


The U.S. Department of Labor, which last year released a rule requiring brokers getting paid for investment advice on a retirement account to be fiduciaries, is reviewing the regulation. The rule is only partly in effect; the department has drafted a proposal to delay full implementation until 2019.


Meanwhile, the Certified Financial Planner Board of Standards, which sets competency requirements criteria and ethical rules for the nearly 78,000 certified financial planners in the U.S., is seeking to compel them to act in clients’ best interests “at all times” when “providing financial advice.”


The board’s proposed standards require its financial planners to “disclose and manage” such conflicts as gifts, bonuses or investment choices that can increase their compensation. Planners would also have to provide additional details about how — but not how much — they are paid.


Some brokerage firms warn that they may put their interests ahead of yours regardless of whether your adviser happens to be a CFP.

Until regulators and trade groups sort this out — and the next total solar eclipse may come first — the burden of finding someone who will act in your best interest is on you.


That means asking an adviser the right questions (and listening for the best answers). I encourage you to clip or print out this column and bring it to your next meeting with your financial adviser.


1. Are you always a fiduciary, and will you state that in writing? (Yes.)


2. Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services? (No.)


3. Do you participate in any sales contests or award programs creating incentives to favor particular vendors? (No.)


4. Will you itemize all your fees and expenses in writing? (Yes.)


5. Are your fees negotiable? (Yes.)


6. Will you consider charging by the hour or retainer instead of an annual fee based on my assets? (Yes.)


7. Can you tell me about your conflicts of interest, orally and in writing? (Yes, and no adviser should deny having any conflicts.)


8. Do you earn fees as adviser to a private fund or other investments that you may recommend to clients? (No.)


9. Do you pay referral fees to generate new clients? (No.)


10. Do you focus solely on investment management, or do you also advise on taxes, estates and retirement, budgeting and debt management, and insurance? (Here the best answer depends on your needs as a client.)


11. Do you earn fees for referring clients to specialists like estate attorneys or insurance agents? (No.)

12. What is your investment philosophy?


13. Do you believe in technical analysis or market timing? (No.)


14. Do you believe you can beat the market? (No.)


15. How often do you trade? (As seldom as possible, ideally once or twice a year at most.)

16. How do you report investment performance? (After all expenses, compared to an average of highly similar assets that includes dividends or interest income, over the short and long term.)


17. Which professional credentials do you have, and what are their requirements? (Among the best are CFA [Chartered Financial Analyst], CPA [Certified Public Accountant] and CFP, which all require rigorous study, continuing education and adherence to high ethical standards. Many other financial certifications are marketing tools masquerading as fancy diplomas on an adviser’s wall.)


18. After inflation, taxes and fees, what is a reasonable estimated return on my portfolio over the long term? (If I told you anything over 3% to 4% annually, I’d be either naive or deceptive.)


19. Who manages your money? (I do, and I invest in the same assets I recommend to clients.)


You can also register for Vance’s free Economic Insights newsletter by emailing him at  The newsletter is educational, easy to read, features notifications of his media appearances, and keeps readers in-the-know on relevant topics.  You can also email Vance prior to the webinar to submit specific planning-related questions that he can address during the call.


Here’s to a happy, healthy, and financially sound 2018 and beyond!



D. Vance Barse is a registered representative and investment adviser representative with and offers securities and advisory services through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.  Advisory services, fixed insurance products, and services offered by Manning Wealth Management are separate and unrelated to Commonwealth. 401 B Street, Suite 2300, San Diego, CA 92101. (619) 237-9977 x309.


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