Written by Douglas Velnoskey
A business is often an owners most valuable asset and is a significant consideration within the owners’ financial and retirement planning.
The first way a Financial Advisor can assist business owners is helping them understand how their business goals fit with their personal financial goals and objectives in the context of their other assets, typically investments, retirement plans, and real estate. Making sure estate planning is current and beneficiaries are correct, so they align with the estate plan is structured is critical.
A second benefit is a Financial Advisor, particularly one who is a Certified Exit Planning Advisor (CEPA), can help implement strategies which increase the value of the business such as succession planning, buy-sell agreements between owners, deferred compensation plans, and key person insurance. Coordination of legal and tax advisors to assure these areas are in the best possible order with consistent process and procedures in place can be facilitated by a Financial Advisor. These provide continuity and stability for the business and can increase its value. Associates appreciate knowing these plans are in place because it adds to their job security.
Third, a Financial Advisor can help a business retain employees by implementing and potentially upgrading retirement savings plans sponsored by the business. A SIMPLE IRA or 401(k) plan with an employer match can provide an important opportunity for everyone in the business to defer and invest some of their income for their own future. Sponsoring a retirement plan with an advisor who helps educate participants in the retirement plan sends a message to associates that the business cares about them and it helps the business reduce employee turnover.
Businesses that align an owners’ personal and financial goals with their business objectives while paying close attention to legal and tax matters build value for all involved.
The concepts illustrated here have legal, accounting and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your particular circumstances. For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and any potential conflicts of interest.
