The Lake Washington Group at Morgan Stanley

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1 The Lake Washington Group at Morgan Stanley

2 th Avenue NE Suite 1900, Bellevue, WA / Main / fax LWG@morganstanley.com

3 The Lake Washington Group at Morgan Stanley Personal wealth and business wealth need to be part of a strategy designed to increase the value of both. Creating such a strategy requires a clear understanding of your current needs and long term goals. Our approach: To develop a personal investment strategy that considers your business in the context of your life. To accomplish this, we follow a specific process called the Business Owner Standard. We use this process to analyze your complete wealth picture and then overlay our understanding of your overall objectives to develop a strategy tailored to your needs. Our goal: As your Financial Advisor, we seek to help turn the needs of your business and personal life into opportunities that help them grow together. The lake washington Group 3

4 Meet the Professionals Michael W. Napier, CIMA, CFP First Vice President Senior Investment Management Consultant Tom Napier Financial Advisor For almost 20 years, Michael has helped business owners and other wealthy clients meet the challenges that stand between them and financial comfort. He understands what s involved in selling a business and creating an exit strategy that seeks to maximize value and minimize tax consequences, while enabling clients to move to the next phase of their lives with greater confidence. Michael honed his problem-solving skills as a systems consultant with Price Waterhouse before joining Morgan Stanley in Since that time, he had helped numerous entrepreneurs determine how to exit their businesses, retire as anticipated and leave a legacy of which they can be proud. He founded the Lake Washington Group at Morgan Stanley in 2008 and has since developed a network of attorneys, accountants, investment bankers and other professionals with the specialized expertise necessary to help guide clients through the business exit process. A graduate of Notre Dame with a BBA in Finance, Michael has earned such prestigious industry designations as CERTIFIED FINANCIAL PLANNER TM (CFP ) and Certified Investment Management Analyst SM (CIMA ). He has served on the Finance Commission for North Cascade Institute and as a former President of the Notre Dame Alumni Club of Western Washington. He resides in Seattle with his wife and two teenaged sons. michael.napier@morganstanley.com If Michael Napier brings years of Wall Street experience to the service of our clients, his brother, Tom, brings years of main street experience. Tom joined the Lake Washington Group at Morgan Stanley in 2012 after a long, successful career as a corporate executive and business owner. He spent 10 years with Verizon Wireless where he served as director of Sales Operations in 14 western states. He then joined a wireless software startup where he developed a keen understanding of the challenges faced by entrepreneurs seeking funding from venture capitalists and outside investors. In 2006, Tom started his own business with the purchase of several Emerald City Smoothie locations and quickly learned that entrepreneurs must spend as much time working on their business as they do working in it. It is this extensive awareness of business owner concerns that makes Tom 4 Morgan Stanley

5 Justin B. vongortler Financial Advisor such a valuable source of advice and guidance to our clients. A graduate of Pacific Lutheran University with a B.A. in Business Administration, Tom coaches high school football at Eastside Catholic in Sammamish. He believes that his coaching background translates well to the business world and works tirelessly to help clients understand what they can do to improve their business and personal financial prospects. Tom is an active member of the Timberlake Christian Church and lives in the Sammamish area with his family. tom.napier@morganstanley.com A former CEO and owner of his own successful business, Justin brings handson, professional experience to the clients of the Lake Washington Group at Morgan Stanley. As the former president of The Justin Agency, Inc., an independent insurance brokerage, Justin catered to the needs of Western Washington businesses by providing comprehensive insurance solutions and small group retirement plans. In 2000, Justin sold the business and joined Pallino, an award-winning restaurant concept, headquartered in Seattle, Washington. For the next decade, Justin served first as VP of Business Development, then as president and CEO, leading Pallino through its early stages of growth as both a regional and international brand. Justin s extensive entrepreneurial background enables him to help anticipate issues our clients may often face when positioning their businesses for growth, as well as possible acquisition. His insurance experience serves our clients in good stead when they structure buy-sell agreements and estate planning strategies. A graduate of the University of Washington with a B.A. in English Literature, Justin takes pride in his communication skills. He is an active member in his alma mater s alumni association and the Bellevue Breakfast Rotary Club. A dedicated father of two young boys, he volunteers as a scout leader and has coached youth soccer and baseball for the past 10 years. Justin and his wife, Stephanie, reside in Kirkland with their sons, Trey and Henry. They are active members of Bellevue Club, Central Park Tennis Club and Seattle Yacht Club. justin.von.gortler@morganstanley.com The lake washington Group 5

6 The Needs of Your Company in the Context of Your Life Running a business requires an exceptional ability to see the big picture while also focusing carefully on details. The big picture encompasses your vision for the company, how it will prosper, who you should hire, where you want to expand and what your financing needs are. Behind each of these goals are a thousand details from what specialists you need to bring in to how to optimize the resources you have and each choice impacts the others. A Distinctive Approach If you are like many of our clients, your business accounts for the lion s share of your personal wealth. The Business Owner Standard program combines analytics with execution to help meet the financial needs of your business while also considering your personal wealth objectives. We can work with specialists and the professionals on your team your accountant or your attorney, for example to explore your company s need for capital, your management succession plan, the asset allocation in your personal portfolio and your most pressing family needs, as well as many other key items. We will then present you with actionable strategies to help you achieve your goals. 6 Morgan Stanley

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8 Looking at your business in the context of your life yields different results than when you look at the two separately. The Business Owner Standard is based on an integrated view of all of your resources. It represents a new way of looking at and meeting the needs of business owners like you. Initial discovery Business needs review Ownership Control and liquidity Key opportunities Key challenges 8 Morgan Stanley

9 Our Process Create family wealth plan & investment strategy Family wealth plan & investment strategy meeting Execute family wealth plan & investment strategy Follow-up meeting(s) Comprehensive wealth management plan including estate, retirement, education and philanthropic planning, as well as borrowing strategies and insurance Investment strategy including risk tolerance, asset allocation, analysis of current holdings and portfolio construction In-person meeting to present details of plan and strategy Begin ongoing execution of wealth management issues Execute investment strategy Periodic in-person meetings to review investment strategy and to continue moving forward on wealth management issues Ongoing monitoring & review Family wealth plan Investment strategy Plan for business Develop a plan for your business Business plan meeting Execute plan for business Follow-up meeting(s) Cash management / capital needs Benefits Risk management Business valuation Business succession In-person meeting to present comprehensive overview of plan and proposed business solutions Begin ongoing execution of business solutions Periodic in-person meetings to review business solutions and any changing dynamics within the business

10 The Business Owner Standard: Making the Connection We have developed a very specific approach to better understand your needs and the requirements of your business. Our approach is comprehensive but flexible. We ll start with whatever is keeping you up at night, then tackle other priorities until every piece of your financial life is connected and taken care of. A simple checklist is the starting point. Business Needs Review Everything starts by zeroing in on the factors that make a difference in your business from your perspective on ownership, control and liquidity, to the key challenges and opportunities you may face. Understanding these factors can play an important role in addressing your lifestyle and personal goals. Cash Management and Capital Needs Review The lifeblood of any business is cash, whether accessing capital or managing receivables and payables. We can help review the strategies you have in place and, if appropriate, share alternatives to consider. Retirement and Benefits Assessment Having the proper benefits plan is an important recruiting and retention tool. We can help you review the benefits your business offers including retirement, stock incentive plans, nonqualified deferred-compensation plans and employee-retention strategies from the perspective of both employer and employee. Risk Review It is important to understand and protect against unforeseen events that can jeopardize the value or even the continuity of your business. Identifying these risks is the first step in helping to protect against them. Succession or Exit Plan Assessment Planning ahead is vital as you look toward the next chapter of your business s history. Whether selling a business in whole or in part or passing one on, there are a number of different exit strategies that can be considered. Family Wealth Plan Your business is a critical element of your personal wealth plan. We can help ensure that decisions made for one complement the other, so that personal wealth and business wealth work together to increase the value of both. Key Documents Organization You want to be sure you, as well as your spouse and/or beneficiaries, can access all your critical documents (powers of attorneys, shareholder agreements, insurance policies, wills, etc.) when they are needed. 10 Morgan Stanley

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12 A Team Effort As a business owner, you may have your own team of advisors. We can work with that team to ensure that your strategy encompasses both your business and personal objectives. Each advisor has a specific expertise, with their partnership being relevant in different situations. 12 Morgan Stanley

13 Business Owner Financial advisor As your Financial Advisor, my role will be to see the big picture by working with you and your other advisors. I can help you understand the total context of your overall finances and the linkages between your personal objectives and business ambitions. For example, should you contribute to a retirement account or does it make more sense to invest those funds in the growth of your business? Is your business succession plan in line with your personal estate plan? Is it wiser to borrow leveraging a securities portfolio or should you seek a traditional commercial or equipment loan? Corporate attorney During the sale of your business, an attorney will help you structure, negotiate and document the terms of the company sale. Your corporate attorney s role includes reviewing relevant documents such as leases, vendor agreements, franchise agreements, employee agreements and Investment banker or business broker Once you have decided to explore the sale or transition of your business, an investment banker or business broker and/or third-party business appraiser will need to be added to your team. They will analyze your business and the competitive environment to help you arrive at a realistic valuation. material contracts to be transferred. The corporate attorneys will also work with each party to make sure that any necessary regulatory or third-party approvals are secured. Finally, your corporate attorneys will help get documents signed and ensure that money properly changes hands between buyer and seller. Attorney Your legal advisors will play an important role in your business. Whether it is working with you on contracts, addressing litigation issues or navigating local laws, they will be a trusted ally throughout the life of your business. When you decide to begin planning for the exit of your business, they will be integral in the process to ensure a smooth transition. Accountant Whether you are looking to grow your business through an acquisition or need to borrow to purchase additional equipment, your accountant can aid in the management of your business financials and help keep your company on stable financial ground.

14 Strategies for Business Owners If you re like many of our clients who own businesses, you share several of the following characteristics: Your personal wealth is linked inextricably to the financial health of your company You spend so much time running your business that you have little left over for anything else Your future financial security depends on more-thanacceptable investment returns The Lake Washington Group at Morgan Stanley concentrates on working with business owners to uncover risks and identify opportunities that might lead to a stronger balance sheet for both their companies and themselves. Collaborating with your attorney, accountant and other advisors, we conduct a systematic assessment of your business needs to provide you with strategies for: Accessing capital and managing cash flow Recruiting and retaining talented employees, while providing yourself with mechanisms for accumulating wealth Mitigating the risks that might jeopardize the future value or continuity of your business Transferring or selling your business and developing a succession plan that truly reflects your wishes The Lake Washington Group understands the interplay between decisions you make for your business and the impact they can have on your future financial security. Our assessment is available to you on a complimentary basis and can prove invaluable in helping you meet your corporate and personal objectives. 14 Morgan Stanley

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16 Exiting your Business You knew this day would come sooner or later, but now that it s actually in view, how will you prepare for it? Exiting the business you ve built and nurtured over the years is not a simple task, either financially or emotionally. The Lake Washington Group at Morgan Stanley can help introduce you to one of several partner investment banks, giving you the opportunity to work with the banker that is right for you and your business. We will then work closely with your entire advisory team your attorney, accountant, investment banker and/ or other advisors to help you address the challenges of: Pre-liquidity planning What do you and other stakeholders want to accomplish and what can you do to maximize the value of your business and pave the way for transfer or sale? Negotiations What strategies are available to implement your exit and what are the key issues of which you should be aware? What resources are available to help? Post-transaction reinvestment How can you integrate your succession strategy with your overall wealth management strategy? The Lake Washington Group can help you achieve the goals you set for yourself, your family and your business, whether you choose to transfer your business to family members or sell it to existing management or a third party. 16 Morgan Stanley

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18 Start the Conversation At the Lake Washington Group, we have the tools, resources and experience to help you address your business needs and achieve your personal financial goals. With access to Morgan Stanley s renowned global resources and investment opportunities, we can offer diverse recommendations for building and protecting your wealth. Call or visit us to discuss the Business Owner Standard and how it can enhance the opportunities available to promote growth in your business and your life. 18 Morgan Stanley

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20 Tax laws are complex and subject to change. This information is based on current federal tax laws in effect at the time this was written. Morgan Stanley Smith Barney ( MSSB ), Morgan Stanley & Co. Incorporated ( Morgan Stanley ) and MSSB s Financial Advisors do not provide tax or legal advice. This material was not intended nor written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged to consult their personal tax or legal advisors to understand the tax and related consequences of any actions or investments described herein. The services outlined are not financial planning (unless they are specifically called financial planning) and do not create an investment advisory or a fiduciary relationship (including under ERISA) between you and Morgan Stanley. Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, not a bank. Where appropriate, Morgan Stanley has entered into arrangements with banks and other third parties to assist in offering certain banking-related products and services. Banking and credit products and services are provided by Morgan Stanley Private Bank, National Association, Morgan Stanley Bank, N.A. or other affiliates. Investment services are offered through Morgan Stanley Smith Barney LLC, member SIPC. Unless specifically disclosed in writing, investments and services offered through Morgan Stanley are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, the Bank and involve investment risks, including possible loss of principal amount invested. All loans are subject to application and approval. These products may not be available in all jurisdictions/territories and are limited to U.S. citizens and permanent resident aliens only. If you have questions, please contact your Financial Advisor. For clients whose account is carried by MSSB, insurance products are offered in conjunction with Morgan Stanley Insurance Services, Inc. For clients whose account is carried by Citigroup Global Markets Inc., MSSB offers insurance products in conjunction with SBHU Life Agency, Inc. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP, CERTIFIED FINANCIAL PLANNER and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board s initial and ongoing certification requirements. Investment Management Consultants Association, Inc. owns the marks CIMA, Certified Investment Management Analyst SM (with graph element), and Certified Investment Management Analyst SM. Morgan Stanley Smith Barney LLC ( Morgan Stanley ), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. This material was not intended or written to be used, and it cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters Morgan Stanley Smith Barney LLC. Member SIPC PS-2588 PS-2502 PS-2486 PS-2551 CRC /13