Among the benefits and challenges of owning a family business is the matter of financially protecting your family and your business, separately and equally. Wealth management for family business owners involves a layer of complexity because the financial needs for you and your family are different, yet intertwined with, those of the business. The choices you make for your family business affect personal finances, and often vice versa.
With almost 40 years of experience guiding our clients, Mercer Advisors helps family business owners create customized financial plans that align with your goals and concerns, such as tax planning, estate planning, investment management, retirement plans, and more.1 We understand that your personal finances and business finances are intertwined, so we take time to understand your situation so that we can help your family achieve its goals.
With Mercer Advisors family office offerings, we are qualified to advise family business owners on multi-generational estate planning, tax optimization, and investment advice. When it comes to advising family business owners, we make your family our business.
The Majority of Businesses Don’t Have a Succession Plan
Many business owners spend a great deal of time on the details of the day-to-day of their company. However, many don’t think about what happens when they leave. Seventy percent of business owners don’t have a succession plan.
Source: PWC’s 10th Global Family Business Survey and SCORE
Grow and Protect Your Business at the Same Time
Conversations with family business owners often start with understanding a pain point. Our experience is that this is often the catalyst for them to seek help from a professional wealth manager. Whether the pain point involves personal finances or business concerns, we can help you better understand the situation and provide a path to resolve it.
We understand that financial planning for family business owners involves increased complexity – with almost 40 years of experience working with family business owners, we can provide a unified and integrated financial plan for you and your family.
-
Mercer Advisors offers solutions to help family business owners and their businesses. Recognizing the intricate relationship between personal and professional finances, we develop separate yet integrated plans to address each facet comprehensively. Understanding the emotional dynamics inherent in family businesses, where financial decisions intersect with personal relationships, including those among family members who are also employees, we provide empathetic guidance to navigate these unique challenges.
Your personal and family needs are different than those of your business. When we think about unified and integrated financial planning for family business owners, we talk about these differences across a number of different parts of your financial plan.
Tax planning
Optimizing your personal tax strategy involves helping you keep more of what you earn. While that’s also true for a family business, how it is structured and how you file the business’ taxes will affect your personal taxes. For example, an S Corp is a pass-through entity that goes entirely to a personal return. However, a C Corp is taxed at the corporate level and therefore does not.
Estate and succession planning
A family business is often the largest asset in a personal portfolio. Personal financial planning involves creating a succession plan, the most effective way for a business to be passed to surviving members of the family. How families title the ownership of the business within the estate plan is an important consideration that we help families work through.
If you want to keep the business within the family for years to come, these are some of the steps to consider:
- Estate planning
- Succession planning
- Investing net profits in other investment vehicles
- Maximizing tax strategies
Investment management
Questions for the family and the business are often similar. For example, what is the risk tolerance? What are the short- and long-term goals? Are there large purchases that need to be funded? Are net profits being invested in other investment vehicles? While the questions may be the same, the answers will often vary dramatically for individuals and businesses.
We can also assist with business-specific considerations.
Corporate retirement plans
Retirement plan compliance is important for protecting your business. These are a few of the key components to consider for offering a retirement plan to employees:
- Profit sharing for key employees through a deferred profit-sharing plan (DPSP)
- Matching and non-matching options for Safe Harbor 401(k)
- Monitoring the investment options available to plan participants on a regular basis
We will work closely with you to create and implement the right retirement plan for your business and help ensure that it stays within compliance regulations. Moreover, we are continuously reviewing retirement plan regulations and advise you on any updates that require us to make necessary changes for your company to remain compliant.
Acquiring and retaining employees
Do you know what benefits can help retain your employees? There are many benefit options to consider that will help enhance your employees’ loyalty and wellbeing. Consider investing in your employees through different offerings, including:
- Retirement plan
- Health benefits
- Profit sharing
- Equity
- Paid life insurance
Our advisors will clearly and thoroughly explain the benefits and advise you on which ones are right for your business and your objectives. Once we align on the specific benefits that will drive the desired outcomes, we will help you implement them and review their effectiveness.
Partner with us
Mercer Advisors is ready to help you with your family business concerns and objectives. Our experience working with many family businesses allows us to look at all aspects of your personal situation and come up with a financial plan that’s right for you. In addition to protecting your family and your business, your comfort and happiness are important to us. We want you to succeed.
Source: The Society for Human Resource Management
1 Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning document preparation and other legal advice is provided through select third parties unrelated to Mercer Advisors.
