In addition to the very important topic of asset protection, there is NO educational entity nationally that deals with what we at the WPI call “advanced” planning. It is important to define advanced planning and the following is a summary of the WPI definition of advanced planning:
Advanced planning is planning for high income/net worth clients that is derived from topics that few advisors in the country are aware of (or if they are aware of the topics, advisors know too little about the topics to incorporate them into a plan for clients). The topics are much more beneficial than the every day solutions traditional advisors use and therefore the topics are not known and not used except by a select few top level advisors around the country.
What are some examples of advanced planning techniques (besides asset protection)?
1) WealthBuilder® Annuity is a program that allows small to medium small size business owners (or individuals in some circumstances) to defer taxable income of between $50,000-$5,000,000 a year into a wealth building program where the money can grow deferred for up to 30 years (this is ideal for business owners looking for supplemental retirement benefits).
2) The QPIP™ is a plan that helps clients mitigate the worst tax problem they have in their estate plans, i.e., the 70-80% tax trap of money in IRA (that occurs upon death of a client with an estate tax problem).
3) Section 79 Insurance Plans are a good way for medium to small business owners to write off through the business a significant amount of cash value building life insurance premiums where the life policy is individually owned by the client. The cash value life policy can be used by the client for supplemental retirement benefits, if needed.
4) Accounts Receivable (A/R) Leveraging when done right (which is rare due to the many poorly constructed plans in the marketplace) is a nice tool to asset protect a business’s A/R while at the same time creating a potentially large supplemental retirement benefit.
5) Closely held Insurance Companies (CICs) are a nice tool for many clients to take large deductions for needed insurance coverages where the premiums are paid (and deducted from the client’s company) to the client’s own insurance company. A CIC is a terrific tool business tool for many medium to small businesses and can function as a nice wealth building tool (with good claims history) for the owners.
The main issue that makes “advanced” planning advanced is that the topics are not widely known to the general public or to the advisor to the general public. If someone does not know of a topic, it is either no good or simply too advanced for the average client and therefore not worth learning.
As stated in the proceeding paragraph, the main reason “advanced” planning topics are not known is because they mainly help the top 5-7% of the income earners in our country or the top 10-15% in built up wealth. Because topics do not apply to the masses, educational entities of all kind (bar and CPA/Accounting associations, insurance and financial planning educators) do not deal with the topics.
Additionally, because “advanced” topics are perceived to be technical and complicated, educational entities shy away from those topics because of the perception that the topics will be “over the head” of most of those they are educating.
We at the WPI believe there is nothing terribly complicated about the “advanced” plans available to help clients. What is lacking in the educational community (until now) is an educational entity that focuses on “advanced” planning and has taken the time to break down the supposed complicated topics into material that is easy to understand, learn and apply to our most important clients (the ones that have high income or wealth).