Strategic wealth management for entrepreneurs and business owners

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1 Wealth and Investment Management Strategic wealth management f entrepreneurs and business owners A snapshot of Volume 2: Growing a business

2 Who should be on the growth phase advisy team and what specific roles do they play in assisting a business owner? Why is it imptant to codinate one s estate plan with the growth of one s business? How conducive is the current tax landscape toward estate and gift planning? What types of trust structures provide strategic benefits to an entrepreneur whose business is in the growth phase of its strategic life cycle? What are examples of typical business, personal and family and how can compartmentalized planning undermine an entrepreneur s ability to address them? The growth phase of a company s life cycle occurs immediately after its fmation phase and serves as the period of ganizational maturation and tactical alignment leading up to an eventual exit strategy. Generally speaking, there are three primary exit strategies: > > Transitioning the business to family members (e.g., children) > > Preparing f an initial public offering ( IPO ) > > Selling the business to a third party Although each company will ultimately fge its own strategic path, there are specific steps that each entrepreneur should take when growing his her business, including: > > Assembling a growth phase advisy team > > Reviewing trust and estate planning needs > > Aligning business, personal and family > > Developing an integrated wealth management plan > > Considering next steps Why should a business owner develop an integrated wealth management plan that takes into account business, personal and family? What are the key next steps that a business owner should consider regarding subsequent phases of his her consider as I fm VOLUME 1 Fmation phase consider as I grow VOLUME 2 Growth phase consider as I transition VOLUME 3 Transitioning to family members VOLUME 4 Pre-IPO planning consider after exiting VOLUME 6 Post-Exit considerations company s life cycle? VOLUME 5 Pre-Sale planning 2 Strategic wealth management f entrepreneurs and business owners

3 Assemble an advisy team A growth phase advisy team is a collection of professional adviss whose individual and collective expertise can serve to provide business owners with the guidance and insight necessary to develop a sound wealth management plan. The growth phase of an ganization s life cycle is nmally the longest phase in terms of duration. During this period, the composition of a business owner s advisy team is likely to vary depending upon the specific nature of the challenges and opptunities being addressed. Although the specific configuration of the team will vary depending upon the circumstances, the advisy team of an entrepreneur who is growing a business will nmally consist of some mixture of the following adviss: Accountant Cpate Attney Refine trust & estate structuring Trust & Estate Attney Trustee Wealth Advis The key to a strong advisy team rests not only upon the practical skills and expertise of its members but also in such members ability to wk in a codinated fashion (i.e., with the business owner and with one another). As Align business, personal and family Investment Representative Growth phase business owner Insurance Agent Map out an integrated wealth planning process such, business owners should strive to surround themselves with professionals who have the ability to wk together as a cohesive and responsive unit. Valuation Consultant Invest Investment Banker Identify an exit stragegy 3 Strategic wealth management f entrepreneurs and business owners

4 Align business, personal and family Business owners often undertake their wealth management planning in a compartmentalized fashion. Although there are many possible reasons f this, a recurring theme arises with those entrepreneurs who are so focused upon the maintenance and growth of their businesses that all other considerations (i.e., personal and familial) take on a diminished relevance. Even in those instances where personal family do receive equivalent attention, many entrepreneurs remain largely unaware of the potential benefits that can accrue when they embrace holistic wealth management methodologies. Entrepreneurs should align their Business Personal Holistic wealth management Some business : Family > > How can I make the business me successful? > > How can I retain my employees? Holistic wealth management considerations: > > Does my exit plan f the business involve family succession? If so, how will I effectuate that transfer? > > If my exit plan does not involve succession, will my transition plan adequately provide f my retirement and the security of my family? > > Have I aligned my exit plan with my estate plan in der to ensure that my family is protected and provided f? Some personal : > > Have I adequately prepared f my retirement? > > How much wealth should I exclude from Some family : > > Are my children adequately prepared to deal with inherited wealth? > > Have I drafted an estate plan? Ultimately, however, the goal of any sound wealth management plan should be to acknowledge the interrelationship between all aspects of a business owner s life. This can be achieved by adopting solutions that simultaneously address an entrepreneur s: > > Business > > Personal > > Family 4 Strategic wealth management f entrepreneurs and business owners

5 Develop an integrated plan After having identified the various drivers of their primary business, personal and family concerns, entrepreneurs should wk with their adviss to craft an integrated wealth management plan that addresses each of these considerations. This planning should take into account a company s near- and long-term strategic trajecty. An integrated wealth management plan encapsulates the strategic path of an entrepreneur s personal, business and family interests in a holistic fashion. It is designed to account f each inflection point in a company s strategic life cycle and provide a means to engage in opptunistic planning in anticipation of those milestones. Ideally, the integrated wealth management planning process also benefits from the input of the entrepreneur s key adviss and reflects the various strategic facets of the business owner s wealth management needs. A sample component of an integrated wealth management plan Wife Husband Consider the case of serial entrepreneurs Rob and Rachel who have two children: Jake (age 20) and Beth (age 18). They launched a new business: a manufacturing company. The growth phase plan Having reviewed the pertinent elements of the integrated plan as they relate to the company s fmation phase, Rob and Rachel s Wealth Advis discusses the challenges and opptunities nmally associated with the growth phase of an entrepreneurial endeav. Rob and Rachel noted that intrafamilial wealth transfer is a priity to them. In response to this, the Wealth Advis provides guidance on several planning alternatives that may help enable them to distribute the wealth that may potentially accrue from the anticipated IPO in a tax-efficient and structured manner, as shown in the figure below. Structure GRAT C-Cp C 1 C 2 Children s Trust Priities Business Engage in discussions with bankers Family Establish GRAT Establish trusts f children Personal Review personal wealth plan f errs and oversights Minimize taxes F illustrative purposes only. Note: C1/C2 represent each of the two children with a beneficial interest in the Children s Trust. Notwithstanding the potential advantages of GRATs, consideration should be given to other issues involved in establishing the trust. Meover, future changes in the law may affect planning. Neither Barclays in the US n its Wealth and Investment Management employees in the US render tax legal advice. Please consult with your accountant, tax advis, and/ attney f advice concerning your particular circumstances. 5 Strategic wealth management f entrepreneurs and business owners

6 What is the next step in the strategic life cycle of business ownership? In many cases, the growth phase of the strategic life cycle of business ownership is characterized by a convergence of commercial, personal and family challenges. Despite this, an entrepreneur can capitalize on the maturation of his her business endeav by adopting a structured approach to wealth management. Although the growth phase of an entity s life cycle can span years even decades, an entrepreneur must nonetheless use this time period to carefully lay out the foundation f the next phase: an eventual exit. Those business owners who proactively embrace this structuring methodology will find themselves well positioned to embark upon the subsequent stage of entrepreneurial planning transitioning the enterprise. In this regard, the three most common exit strategies, which are discussed in subsequent volumes of this series, include: > > Transitioning the business to family members > > Exiting via an Initial Public Offering ( IPO ) > > Selling the business Post-growth phase wealth planning consider as I fm VOLUME 1 Fmation phase consider as I grow VOLUME 2 Growth phase consider as I transition VOLUME 3 Transitioning to family members VOLUME 4 Pre-IPO planning consider after exiting VOLUME 6 Post-Exit considerations VOLUME 5 Pre-Sale planning i F me details, please refer to the publication: Strategic wealth management f entrepreneurs and business owners Volume 2 Growing a business To access all of the volumes, please follow the link below: wealth.barclays.com/us-entrepreneurs 6 Strategic wealth management f entrepreneurs and business owners

7 Imptant Disclosures Diversification does not guarantee a profit protect against a loss. Investing in securities involves a certain amount of risk. You are urged to review all prospectuses and other offering infmation pri to investing. Past perfmance is not a guarantee of future perfmance. This material is provided by Barclays f infmation purposes only, and does not constitute tax advice. Neither Barclays in the US n its Wealth and Investment Management employees in the US render tax legal advice. Please consult with your accountant, tax advis, and/ attney f advice concerning your particular circumstances. Barclays does not guarantee favable investment outcomes. N does it provide any guarantee against investment losses. Barclays refers to any company in the Barclays PLC group of companies. Barclays offers wealth management products and services to its clients through Barclays Bank PLC ( BBPLC ) and functions in the United States through Barclays Capital Inc. ( BCI ), an affiliate of BBPLC. BCI is a registered broker dealer and investment adviser, regulated by the U.S. Securities and Exchange Commission, with offices at 745 Seventh Avenue, New Yk, New Yk Member FINRA and SIPC. The wealth management products offered by Barclays in the United States clear through, and where applicable, assets are custodied by, Pershing LLC, a subsidiary of the Bank of New Yk Mellon Cpation. Pershing LLC is a member of FINRA, NYSE and SIPC. Barclays Bank PLC is registered in England and authized by the Prudential Regulation Authity and regulated by the Financial Conduct Authity and the Prudential Regulation Authity. Registered No Registered Office: 1 Churchill Place, London E14 5HP. Copyright 2015 Barclays. CSNY v12 July 2015

EXPERIENCE VERIFICATION FORM for waiver of undergraduate degree requirement

APPLICANT S NAME: EXPERIENCE VERIFICATION FORM f waiver of undergraduate degree requirement The CPA Western School of Business (CPAWSB) requires the infmation requested by this fm in der to assess the