A growing area of expertise among CPAs is the addition of family office financial planning and management to their practices. Family office services may include the more familiar financial, tax, and estate planning issues, as well as asset oversight or management, cash management, and risk management. Since family office practices typically work with high-net-worth (HNW) individuals, comprehensive wealth transfer planning is also an important component.

An interesting positive trend in the financial and wealth-planning arenas is that a larger percentage of HNW heirs may be more inclined to stay with their parents’ wealth managers than in the past. A recent study by GlobalData (“28.3% of HNW Clients’ Children Move Their Assets to a New Provider When They Inherit,” Apr. 3, 2019, http://bit.ly/2L0Bekd) of over 350 wealth managers found that more than 70% of heirs were not changing advisors, in contrast to even a few years ago when most were moving their inherited assets to other firms. The survey revealed that the two most important factors in retaining the younger generation were involving them in the estate planning process and encouraging clients to engage them in financial decisions.

As CPAs work to grow and maintain their family office practices, this month’s column presents some helpful resources that may spark a few conversations with current and potential clients.

Asset Protection Society

The Asset Protection Society (APS) is a membership organization open to advisors, as well as the general public. Its website (https://assetprotectionsociety.org) provides educational information for advisors and clients, partially to offset a concern by the APS for a lack of regulation in the asset protection arena. Some of the resources are targeted to the APS certification programs, but there are several free materials that CPAs may find interesting and beneficial to their practices. Members have access to newsletters and webinars, but the public education area of the website collects most of the general information resources, such as articles and videos, and is a good place to start exploring the site (http://bit.ly/2Dv3V2A).

Asset Protection Society


Tax protection articles (http://bit.ly/2IUJCz4) cover a variety of topics, with a particular focus on retirement plans. As an example, “IRA Rescue Using Home Equity Management” by Roccy DeFrancesco (http://bit.ly/2UAUtAr) discusses the use of funds in an IRA or qualified plan that are not needed for living costs to create a deductible home mortgage payment without paying tax on the amounts removed from the retirement plan, and includes a sample scenario. The article also covers some options for investing the proceeds from selling the home.

A handy “50-State Asset Protection Chart” (http://bit.ly/2UB3xoL) summarizes state laws governing tenancy by the entirety, the homestead exemption, IRAs, life insurance cash value and proceeds, and annuity cash value and payments.

“Asset Protection Planning—Global” addresses a particular emphasis of the APS on offshore asset protection (http://bit.ly/2XAKOeM). The article covers three main tools: Offshore Asset Protection Trusts (OAPT), Offshore Limited Liability Companies (OLLC), and Captive Insurance Companies (CIC). The discussion explains that funds do not have to be moved offshore to be protected. In addition, going offshore does not necessarily reduce U.S. taxes.

Several educational videos are available from the Wealth Preservation Institute, a Michigan-based advisory firm (http://bit.ly/2vpWo0d). The selections are targeted to nonexperts (i.e., potential clients) and generally focus on insurance-related techniques; however, the “Asset Protection” video is fast paced and sufficiently detailed to provide CPAs with talking points and perhaps some new ideas. The 37-minute presentation explains that the advisor’s role in a “core asset protection plan” goes beyond financial and estate planning, and includes stock market risk mitigation, long-term care coverage, asset protection from coverage, and tax reduction. The video discusses asset protection tools, such as the homestead exemption and life insurance protection available in some states, as well as extensive review of entity structures such as family limited partnerships. The address concludes with several common asset protection tools that don’t really work.

Finally, the Investment Risk Quick Score App (http://bit.ly/2Pt5hiM) provides a risk score, a multiyear performance summary of average return and total return, and several risk metrics for specific stocks, funds, custom assets, or portfolios.

Marsh Private Client Services

Marsh Private Client Services, a member of Marsh & McClennan Companies, provides personal insurance consulting from more than two dozen offices around the United States. Its website (https://pcs.marsh.com/us/home.html) promotes access to its thought leadership resources, such as the 32-page “Family Office Benchmarking Study,” which is available for download after free registration (http://bit.ly/2ZvBbjw). The project surveyed the insurance programs used by almost 100 established family offices and wealthy individual families. The results included the lack of employment practice liability insurance by a sizable minority of families that employed domestic workers and a large majority not carrying directors’ and officers’ liability coverage. In addition to addressing several very specific areas of concern, the report also provides predictions of future trends.

“Wealth at Risk: How High Net Worth Families Overpay to be Underinsured” is a 2012 study by ACE Private Risk Services available on Marsh’s website (http://bit.ly/2DrpQrl). The 28-page report summarizes the results of a survey of 600 insurance agents and brokers; although it reflects topics covered in the Benchmarking Study, it is very thorough and raises several talking points for CPAs and their clients. HNW families may have substantial coverage on their homes and other tangible assets; however, the study found that more than half were underinsured on umbrella liability as protection from lawsuit risks, personal liability from lawsuits by household staff, and professional liability for serving as board members and officers. An exhibit provides a checklist of 10 questions to help determine if individuals are “over-paying to be underinsured.”

Marsh also presents an extremely useful “Severe Weather Center” (http://bit.ly/2PqZDxU). Although it is a little off topic for this column, readers are encouraged to take a look. The weather webpage includes a daily updated weather map and a collection of preparedness articles.

Blog Roundup

Camden Wealth Advisors Insights (https://www.camdenwealthadvisors.com/insights.html) is a portal for external-provider articles and newsletters from firms such as Fidelity, BNY Mellon, and JP Morgan Chase. The materials are grouped under the topic headings of markets, investing, and financial planning. The financial planning section includes the three-page “A Primer on Estate Management” from the Generational Wealth Transfer Series by BNY Mellon, covering important documents, reviewing beneficiaries, and making wise withdrawals from retirement and investment accounts (http://bit.ly/2L2nPIr). “Five Social Security Myths Debunked” by Fidelity offers a hypothetical example and a checklist for determining Social Security claims strategy (http://bit.ly/2vlGeFk).

OneBite: Eating the Financial Elephant (https://onebiteblog.com/), from Wipfli Advisors, presents weekly articles written by more than 70 regular contributors for financial advisors, accountants, estate planners, and other professionals. “Can Your Business Really Be Your Retirement’s Golden Goose Without the Right Planning?” discusses four action steps, including how to plan a business transition and build transferable value (http://bit.ly/2US0GwF). The hidden jewel on this blog is “Bite-Sized Stats” (located on the “About” page, https://onebiteblog.com/about/), which is a great collection of infographics. Examples: 60% of failed wealth transfers are due to poor family communication, and 50% of plan sponsors indicate that executive benefit programs are effective in retaining key personnel.

Family Office Exchange: FOX Blog (https://www.familyoffice.com/insights) offers timely posts of articles and pod-casts, such as “FOXCast: Adapting to Change in the Great Transfer of Wealth,” which is a 10-minute podcast about the forecasted great wealth transfer that the presenter indicates is already beginning to happen with private businesses. The webpage also includes a transcript (http://bit.ly/2UVcjDa). “Wealth Management as a Second Family Business” is an article that describes several characteristics for preserving wealth and includes links to other resources (http://bit.ly/2VlMXgX). In addition to the blog, the FOX website includes two helpful mini-guides with tools and other resources: “Understanding the Family Office” (http://bit.ly/2Vm7Clb) and “Starting a Family Office” (http://bit.ly/2KYR92n).

Susan B. Anders, PhD, CPA/CGMA is the Louis J. and Ramona Rodriguez Distinguished Professor of Accounting at Midwestern State University, Wichita Falls, Tex. She is a member of The CPA Journal Editorial Advisory Board.