Top Wealth Management, Advanced Planning Stories of 2015

Elite Advisor Report readers sought expert guidance about taxes, asset protection, risk mitigation, succession planning and family business ownership issues

By CEG’s Elite Advisor Report staff

Turn back the clock 12 months. The financial markets were near record highs. The domestic economy and job market were showing signs of life. But, plummeting oil prices, a slowing global economy, political gridlock, high marginal tax rates on the affluent and painfully low fixed-income returns for savers and retirees were keeping many advisors and their clients up at night. And then there was the specter of aging baby boomers outliving their retirement savings.

In many ways, not much has changed, except that that Fed’s decision to raise interest rates (finally) signals the economy is strong enough to wean itself from quantitative easing—at least statistically. But the stock markets have returned essentially zero to investors over the past 12 months. Fixed-income returns are also near zero, and robo advisors, rising interest rates, Social Security reform, the upcoming elections and terrorism (here at home, not just abroad) are weighing heavily on clients’ minds.

It could be a foggy financial forecast for many in 2016, but with tips like these from our expert contributors, wealth managers will find a way to make it shine for their clients and their firms.

Our Top 10 Expert Team Stories of 2015
  1. Improving Financial Awareness and Literacy—By Valentino Sabuco
  2. Eight Keys to Protecting Your Clients’ Wealth—By Jonathan Powell
  3. Helping HNW Clients Assess Personal Liability Risk Factors—By David Hubbard
  4. Family Office Risk Management—By Scott Justice
  5. Six Really Dumb Things That Business Owners Do at Year-End—By Josh Patrick
  6. Commonly Overlooked Tax Incentives for Business Owners—By Blake Christian
  7. What Advisors Need to Know About the 3.8% Net Investment Tax - Part One—By Janice Eiseman
  8. Financial and Tax-Related Identity Theft - Part Two—By Blake Christian
  9. Alcoholism’s “Stinking Thinking” - Part One: “Just Wine at Dinner”—By Tom Hubler
  10. When the Affluent Ask You: “Should I Do This?”—By Randy Fox

*** Don’t think much has changed in our industry over the past year? Think again. Compare this year’s Top 10 list with 2014 and 2013. Many of the expert names are familiar, but the topics that grabbed your attention have certainly changed.

Financial literacy (or lack thereof)

A record $60 trillion in wealth will be transferred between generations over the next three decades in the U.S. alone. Both donors and beneficiaries seemed woefully unprepared for the responsibilities that go along with that wealth. According to Valentino Sabuco, CFP®, AEP®, executive director and publisher of The Financial Awareness Foundation, it’s a huge opportunity for advisors. As Sabuco explains in his popular two-part series, Improving Financial Awareness and Literacy, “Estate planning is one of the most overlooked areas of personal financial management. It is estimated that over 120 million Americans (that’s half your family and friends, business associates and prospects) do not have up-to-date estate plans to protect themselves and their families in the event of sickness, accident or untimely death. This costs the affluent and middle classes many wasted dollars and hours of emotional hardship each year that can be minimized with proper planning and action.”

Risk management

David Hubbard, vice president, regional marketing manager at AIG Private Client Group and his colleague, Scott Justice, an assistant vice president and senior business development manager, really hit home with our readers this year.

In Helping HNW Clients Assess Personal Liability Risk Factors, Hubbard explains that affluent people tend to have dynamic, multifaceted lives (and possessions). “The more complex your lifestyle, the greater the chance of a curveball coming your way—a bitter former household employee who claims harassment or improper firing, a neighbor with an ax to grind, or even an underinsured motorist who hits your vehicle and can’t pay for the damage he or she has done.” Unfortunately, notes Hubbard, most affluent clients have glaring gaps in their coverage and excess liability insurance can help.

Meanwhile, Hubbard argues that insurance is “a critical part of the personal wealth management puzzle, yet it’s just one of the core disciplines that family offices depend upon to meet the ongoing demands of their employers and secure the future of each family member.” In his insightful piece, Family Office Risk Management, Hubbard explains that wealth advisors are in a highly advantageous position since their daily efforts put them in contact with a multitude of specialists in real estate, estate planning and other relevant industries. “By investing in your personal network, you inevitably invest in yourself as well,” notes Hubbard.

Identify theft is another increasingly common risk faced by all Americans, especially the wealthy and the elderly, according to Blake Christian, CPA/ MBT, a tax partner at HCVT. Identity theft is now the most common consumer complaint—with over ten million total identity theft cases per year. According to Christian, identity theft “not only has tarnished the reputations of Fortune 500 brands such as Anthem, Target and Home Depot, but it also has infiltrated security-conscious government agencies, including the Internal Revenue Service.” Taxpayers and their advisors should be especially wary of false returns that are often filed early in the tax season using the victim’s Social Security number and a revised address so that the thief can benefit from the fraudulent refund. See Christian’s Financial and Tax-Related Identity Theft (two-part series) for more.

Wealth protection and tax mitigation

As Jonathan Powell, a managing principal of CEG Worldwide, explains in Eight Keys to Protecting Your Clients’ Wealth, there are eight essential areas of concern that you should be discussing with affluent clients. That includes not only their financial assets and possessions, but sensitive information about the people they care about most. Meanwhile, Janice Eiseman, a tax partner at Cummings & Lockwood, takes time to deconstruct the complex rules pertaining to the Net Investment Tax for affluent individuals, trusts and estates in plain, simple English. See What Advisors Need to Know About the 3.8% Net Investment Tax for more high-income tax mitigation tips from Eiseman.

Helping your business-owner clients

As record numbers of baby boomers reach retirement age in the coming years, a tidal surge of family-owned businesses are likely to transfer ownership—often to those from outside their families. As Josh Patrick, CFP, head of Stage2Planning Partners, explains in Six Really Dumb Things That Business Owners Do at Year-End, business owners often rush to make hasty decisions this time of year—from ordering office supplies and capital equipment to outright sales of their businesses—just to beat arbitrary calendar deadlines that they’ll later regret. “Be smart and think about your year-end purchases just like you would for one in April,” advises Patrick. “If you need it and can afford the expenditure, go for it. Otherwise, wait. You’ll be glad you did.” However, HCVT’s Blake Christian says this IS a good time of year for advisors and their clients to keep their eyes out for Commonly Overlooked Tax Incentives for Business Owners at the local, state and federal levels.

Estate planning and family dynamics

No one enjoys talking about alcoholism and drug abuse during this festive time of year, but it’s an increasingly common destroyer of both families and family businesses, according to longtime Elite Advisor Report columnist Tom Hubler, president of Hubler for Business Families. And, now is the time of year when family emotions and dynamics are likely to be most volatile. If you haven’t already done so, we encourage you to read Hubler’s powerful two-part series, Alcoholism’s “Stinking Thinking”: “Just Wine at Dinner.” Now is also the time of year that you’re likely to get a surge of “second opinion” requests from clients and may have several ethical dilemmas on your hands. Take a few minutes out of your holiday “slow time” to read Randy Fox’s insightful piece, When the Affluent Ask You: “Should I Do This?”, which includes a real-life case study about charitable lead annuity trusts and clients who want to take RMDs when they don’t really need the money. Another of Elite Advisor Report’s longtime columnists, Fox is editor in chief of Planned Giving Design Center and co-founder of EzCharitable, LLC.


No one has a crystal ball to predict with certainty what the markets, the economy and client life events will throw at wealth advisors in 2016. But our experts maintain that if you stick to your discipline and choose your staff, clients and referral partners carefully, you will be well-positioned to ride out any bumps in the road in 2016 and beyond. Fasten your seatbelts. It should be an interesting ride.