Consolidating a New Client’s Financial Life and Setting the Stage for Efficient Wealth Management

The Big Picture: With a disparate team of advisors and a patchwork of assets, a retired investment manager had underestimated his net worth by half. TwinFocus created a unified balance sheet, saved him precious time and hassle, and laid the groundwork for a smooth transition to the next generation.

The Backdrop: Ultra-high-net-worth individuals with an entrepreneurial mindset may have originated their wealth from a single source, but the innate mentality of doing and building more motivates them to diversify income streams.

Over time, they pursue other endeavors like distinct businesses, investment funds, and real estate investments. In the process, they come to rely on a portfolio of providers for accounting, legal, investment, and other personal and professional services. As a result, their financial concerns become decentralized and more inefficient over time.

Our Approach: Our team of multi-disciplinary experts create a unique family office solution capable of providing the comprehensive visibility and advice needed to make complex and well-informed decisions.

Here’s how we helped one clients regain visibility into and control over his financial life.
The Situation: A retired investment manager, the patriarch of a successful family, approached TwinFocus to help gain a better handle on his financial life and plan for the future. Like many in this position, this family’s personal finances became decentralized over the years as their business undertakings and investments expanded.

As his family’s wealth evolved, our client hired the best attorneys, accountants, and investment sub-advisors. But he was just one more client among hundreds for each of these professionals, and the solutions they recommended were disjointed. The left hand didn’t know what the right hand was doing.

With each professional working in their distinct silo, it was impossible to institutionalize processes for risk management, macro investment positioning, record keeping, tax compliance, accounting, and wealth stewardship. No one was advising on the “big picture” and all the complex moving parts while making important financial decisions.

This client arrived to his first meeting with TwinFocus with a best guess for his net worth sketched on a simple notepad. His wife added some concerning insight: “He has everything in his head. If something happened to him, my children and I wouldn’t know what to do.”

The Solution: Although initially attracted to our macroeconomic views and investment insights, this client engaged TwinFocus for our “total balance sheet” approach. As a first step for getting this client’s financial house in order, TwinFocus initiated a discovery exercise to help us reconstruct a comprehensive family balance sheet and institutionalize a process to manage and update it in real time.

Onboarding and Uncovering

During the first 10 months of our engagement, we worked tirelessly to understand the financial account architecture for all of the family’s assets. This included:

  • Valuing liquid assets and getting appraisals and estimates on illiquid assets. In the process, we even discovered that the client was still paying real estate taxes and property insurance on property he no longer owned, which we were able to get refunded.
  • Identifying and mapping out all the family entities and vehicles—trusts, charitable and co-investment vehicles, and multi-generational structures.
  • Identifying all the various balance sheet assets, categorizing them by ownership and risk exposure, valuing liquid assets, and getting appraisals and estimates on illiquid assets.

Upon completing a comprehensive balance sheet, we determined the family’s net worth was more than 50% higher than the patriarch’s best estimate, and the current ownership architecture was suboptimal in terms of both tax efficiency and how he wanted assets to flow upon his passing.

Detailed Planning

The time and effort we put into building a balance sheet provided a critical foundation to begin more extensive planning. Underlying this process was legal naming and classification of assets that structured his wealth to advance planning goals.

In addition, we were able to determine what types of assets to place across various multi-generational vehicles to optimize income as well as estate/gift taxes, all in one exercise and in real-time – without the need to involve expensive estate planning counsel on an ongoing basis.

Saving Time and Headaches

Beyond the financial, this client also realized invaluable benefits to his time and peace of mind.Instead of fielding calls from his accountants looking for documents weeks before taxes are due, TwinFocus manages the entire process well ahead of deadlines.

Likewise, in place of visits to the family attorney every few years to refresh estate planning documents, TwinFocus is proactively making recommendations and adjustments consistent with the family’s objectives based on evolving family conditions as well as the changing regulatory environment. A family that once worried there was no place to go in the event of an emergency now rests easy knowing they have TwinFocus to rely on.

The Bottom Line: Investing should not be solely about maximizing return. What really matters is net gain after taxes while achieving other life- and wealth-structuring objectives across generations. With our experienced team and total balance sheet approach, we have the tools to constantly evaluate and act on these factors.

With strong foundations in place and TwinFocus proactively managing all aspects of this client’s balance sheet under one roof, he is ready to enjoy retirement with full confidence that the family’s wealth is secure for generations—and if something should happen to him, the transition process would be as smooth as turning on a light switch.

Disclosure: Case studies may not be representative of the experiences of other TwinFocus clients.