http://dynamicwealthmanagementtips.com/?p=10#comments
Over the past few columns, I have discussed issues related to selling the family business.
I’ve covered the importance of evaluating your life goals along with the dollars involved in a sale, the value of shaping up the management and financial statements, and the need to leverage expert advice. This final installment will convey a few techniques to optimizing the deal with the buyer.
It is key to understand that the buyer and the seller have divergent interests in the structure of the transaction, most of which revolve around stock and assets. The seller wants to sell stock, and the buyer wants to buy assets. There are a few reasons for this.
Imagine the business in question is a construction or drug company, and is sold. If years after the sale a bridge the company engineered and built collapsed, or a severe side effect was discovered with a drug or medical device the business provided, who is held liable? The answer is the owner of the stock. One of the main negotiation points in selling a business is will it be a sale of stock or assets.
The new owner, if they purchase the stock of a company, becomes liable for any claims against that company for all its previous work. As such, it is in the seller’s best interest to sell the shares of the business to shield it from any future responsibility.
There is another reason why the seller is interested in selling stock. If the value of the company had seen significant growth in the value of its stock over time, a sale of stock would be subject to a capital gains tax rate. With the current tax structure, the capital gains tax rate is lower than the income tax rate. This could translate into substantially greater net value from the sale.
On the flip side, the buyer would prefer not to purchase the stock of the company, but rather to acquire the assets. This enables the buyer not only to avoid any potential liabilities, but also to gain the depreciation and amortization benefits that come along with purchasing assets.
As an aside, assets that are not considered in direct line with the operations of the business should also be removed from the business. For example, having the land the business sits on residing in a separate LLC makes the business easier to buy if the buyer wanted to relocate.
In the classic book “Getting to Yes,” one of the main concepts is that many times there are components of the object in a negotiation that have little value to one party but a lot of value to the other. In negotiating over an orange, it might turn out that one party values only the pulp for the juice, while the other values only the peel for cooking.
Along these lines, there is a group of techniques that can be used to optimize the deal for one or both parties.
Terry Stanaland, a CPA and attorney in Greensboro and national lecturer on financial and tax topics, describes it this way: “Restructuring the deal from a simple cash transaction to correctly incorporating a noncompete clause, a consulting agreement, and/or an employment agreement can help achieve greater bottom line dollars for both parties involved in the sale.”
For that matter, the buyer is certainly going to want the current owner to stick around the business for a while anyhow.
Understanding and working with the elements important to the buyer that reduce current and long-term taxes, lower liability risk, and simplify the transaction can help the family business owner optimize the overall value of the sale and ultimately get the deal done.
In two weeks: The North Carolina Family Business of the Year
Columnist Henry Hutcheson is a nationally recognized family business speaker, author and consultant with ReGeneration Partners in Raleigh.
Freitag, 20. Mai 2011
Dynamic Wealth Management Headlines:How to structure sale of business
http://dynamicwealthmanagementtips.com/?p=10
Over the past few columns, I have discussed issues related to selling the family business.
I’ve covered the importance of evaluating your life goals along with the dollars involved in a sale, the value of shaping up the management and financial statements, and the need to leverage expert advice. This final installment will convey a few techniques to optimizing the deal with the buyer.
It is key to understand that the buyer and the seller have divergent interests in the structure of the transaction, most of which revolve around stock and assets. The seller wants to sell stock, and the buyer wants to buy assets. There are a few reasons for this.
Imagine the business in question is a construction or drug company, and is sold. If years after the sale a bridge the company engineered and built collapsed, or a severe side effect was discovered with a drug or medical device the business provided, who is held liable? The answer is the owner of the stock. One of the main negotiation points in selling a business is will it be a sale of stock or assets.
The new owner, if they purchase the stock of a company, becomes liable for any claims against that company for all its previous work. As such, it is in the seller’s best interest to sell the shares of the business to shield it from any future responsibility.
There is another reason why the seller is interested in selling stock. If the value of the company had seen significant growth in the value of its stock over time, a sale of stock would be subject to a capital gains tax rate. With the current tax structure, the capital gains tax rate is lower than the income tax rate. This could translate into substantially greater net value from the sale.
On the flip side, the buyer would prefer not to purchase the stock of the company, but rather to acquire the assets. This enables the buyer not only to avoid any potential liabilities, but also to gain the depreciation and amortization benefits that come along with purchasing assets.
As an aside, assets that are not considered in direct line with the operations of the business should also be removed from the business. For example, having the land the business sits on residing in a separate LLC makes the business easier to buy if the buyer wanted to relocate.
In the classic book “Getting to Yes,” one of the main concepts is that many times there are components of the object in a negotiation that have little value to one party but a lot of value to the other. In negotiating over an orange, it might turn out that one party values only the pulp for the juice, while the other values only the peel for cooking.
Along these lines, there is a group of techniques that can be used to optimize the deal for one or both parties.
Terry Stanaland, a CPA and attorney in Greensboro and national lecturer on financial and tax topics, describes it this way: “Restructuring the deal from a simple cash transaction to correctly incorporating a noncompete clause, a consulting agreement, and/or an employment agreement can help achieve greater bottom line dollars for both parties involved in the sale.”
For that matter, the buyer is certainly going to want the current owner to stick around the business for a while anyhow.
Understanding and working with the elements important to the buyer that reduce current and long-term taxes, lower liability risk, and simplify the transaction can help the family business owner optimize the overall value of the sale and ultimately get the deal done.
In two weeks: The North Carolina Family Business of the Year
Columnist Henry Hutcheson is a nationally recognized family business speaker, author and consultant with ReGeneration Partners in Raleigh.
Over the past few columns, I have discussed issues related to selling the family business.
I’ve covered the importance of evaluating your life goals along with the dollars involved in a sale, the value of shaping up the management and financial statements, and the need to leverage expert advice. This final installment will convey a few techniques to optimizing the deal with the buyer.
It is key to understand that the buyer and the seller have divergent interests in the structure of the transaction, most of which revolve around stock and assets. The seller wants to sell stock, and the buyer wants to buy assets. There are a few reasons for this.
Imagine the business in question is a construction or drug company, and is sold. If years after the sale a bridge the company engineered and built collapsed, or a severe side effect was discovered with a drug or medical device the business provided, who is held liable? The answer is the owner of the stock. One of the main negotiation points in selling a business is will it be a sale of stock or assets.
The new owner, if they purchase the stock of a company, becomes liable for any claims against that company for all its previous work. As such, it is in the seller’s best interest to sell the shares of the business to shield it from any future responsibility.
There is another reason why the seller is interested in selling stock. If the value of the company had seen significant growth in the value of its stock over time, a sale of stock would be subject to a capital gains tax rate. With the current tax structure, the capital gains tax rate is lower than the income tax rate. This could translate into substantially greater net value from the sale.
On the flip side, the buyer would prefer not to purchase the stock of the company, but rather to acquire the assets. This enables the buyer not only to avoid any potential liabilities, but also to gain the depreciation and amortization benefits that come along with purchasing assets.
As an aside, assets that are not considered in direct line with the operations of the business should also be removed from the business. For example, having the land the business sits on residing in a separate LLC makes the business easier to buy if the buyer wanted to relocate.
In the classic book “Getting to Yes,” one of the main concepts is that many times there are components of the object in a negotiation that have little value to one party but a lot of value to the other. In negotiating over an orange, it might turn out that one party values only the pulp for the juice, while the other values only the peel for cooking.
Along these lines, there is a group of techniques that can be used to optimize the deal for one or both parties.
Terry Stanaland, a CPA and attorney in Greensboro and national lecturer on financial and tax topics, describes it this way: “Restructuring the deal from a simple cash transaction to correctly incorporating a noncompete clause, a consulting agreement, and/or an employment agreement can help achieve greater bottom line dollars for both parties involved in the sale.”
For that matter, the buyer is certainly going to want the current owner to stick around the business for a while anyhow.
Understanding and working with the elements important to the buyer that reduce current and long-term taxes, lower liability risk, and simplify the transaction can help the family business owner optimize the overall value of the sale and ultimately get the deal done.
In two weeks: The North Carolina Family Business of the Year
Columnist Henry Hutcheson is a nationally recognized family business speaker, author and consultant with ReGeneration Partners in Raleigh.
Dynamic Wealth Management Headlines:Facing the future: Digital imaging could be next big thing in advice business
http://dynamicwealthmanagementtips.com/?p=1
A unique combination of psychology and technology might be just the ticket for getting investors to start taking their retirement savings more seriously.
Speaking last Monday at the InvestmentNews’ annual Retirement Income Summit in Chicago, Hal Ersner-Hershfield, a postdoctoral fellow and visiting assistant professor at Northwestern University’s Kellogg School of Management, illustrated how individuals generally take their future more seriously when they can imagine themselves as an older person.
Mr. Ersner-Hershfield used the example of a teenage boy smoking cigarettes because he is unable to imagine realistically the effects of long-term smoking on his body.
This is the same mindset, he explained, that helps justify why half the people in the country have just $25,000 saved for retirement and why a third of them have less than $1,000 saved.
To help remedy that gross shortfall in retirement savings, Mr. Ersner-Hershfield has developed a program that creates images of what people will look like in 30 or 40 years.
While the financial services industry for years has promoted savings calculators and estimates on retirement income needs, it turns out that seeing an image of yourself at an advanced age helps make imagining getting older a reality.
In his research, Mr. Ersner-Hershfield applied aging-avatar images of individuals to their perspectives on spending and saving money.
“The more similar people felt to their self in the future, the more assets they wanted to save,” he said. “And we found that the more the future self looks like a different person, the worse we are at saving behavior.”
Mr. Ersner-Hershfield even tweaked the research to alter the expression of the avatar so that poor-savings-habit responses would cause the avatar likeness to frown.
“The objective is to give people vivid examples of their future self,” he said.
Susan Carr-Templeton, founder of Stafford Wells Advisors Ltd., tested the technology on some of her clients.
“I think it would be great for 401(k) plan participants or some young people like athletes who are making a lot of money,” she said.
The technology is at least six months from being developed for practical use, according to Mr. Ersner-Hershfield.
“We envision it starting as more of an institutional thing that starts at a company like Fidelity [Investments] or something like that,” he said.
“The idea is to make financial education more engaging and more fun,” he said. “The research shows that whenever we see an image of ourselves, even as a reflection in the mirror, we behave better.”
While the technology might not be available yet, Ms. Carr-Templeton said there are techniques that can be used right now to help clients think more seriously about their retirement future.
“I ask clients to visualize where they will be when they retire,” she said. “I ask for specific details about where they will live and what it will actually cost to live there.”
Of course, she added, being able to show a client an avatar image of what old age will look like “could make an adviser unique.”
A unique combination of psychology and technology might be just the ticket for getting investors to start taking their retirement savings more seriously.
Speaking last Monday at the InvestmentNews’ annual Retirement Income Summit in Chicago, Hal Ersner-Hershfield, a postdoctoral fellow and visiting assistant professor at Northwestern University’s Kellogg School of Management, illustrated how individuals generally take their future more seriously when they can imagine themselves as an older person.
SELF AS A STRANGER
“People tend to make decisions for immediate gratification because they are treating their future self as a stranger,” he said.Mr. Ersner-Hershfield used the example of a teenage boy smoking cigarettes because he is unable to imagine realistically the effects of long-term smoking on his body.
This is the same mindset, he explained, that helps justify why half the people in the country have just $25,000 saved for retirement and why a third of them have less than $1,000 saved.
To help remedy that gross shortfall in retirement savings, Mr. Ersner-Hershfield has developed a program that creates images of what people will look like in 30 or 40 years.
While the financial services industry for years has promoted savings calculators and estimates on retirement income needs, it turns out that seeing an image of yourself at an advanced age helps make imagining getting older a reality.
In his research, Mr. Ersner-Hershfield applied aging-avatar images of individuals to their perspectives on spending and saving money.
“The more similar people felt to their self in the future, the more assets they wanted to save,” he said. “And we found that the more the future self looks like a different person, the worse we are at saving behavior.”
Mr. Ersner-Hershfield even tweaked the research to alter the expression of the avatar so that poor-savings-habit responses would cause the avatar likeness to frown.
“The objective is to give people vivid examples of their future self,” he said.
Susan Carr-Templeton, founder of Stafford Wells Advisors Ltd., tested the technology on some of her clients.
“I think it would be great for 401(k) plan participants or some young people like athletes who are making a lot of money,” she said.
The technology is at least six months from being developed for practical use, according to Mr. Ersner-Hershfield.
“We envision it starting as more of an institutional thing that starts at a company like Fidelity [Investments] or something like that,” he said.
NO COST ESTIMATE
Mr. Ersner-Hershfield added that it is too early to guess what it might cost for an adviser to gain access to the technology.“The idea is to make financial education more engaging and more fun,” he said. “The research shows that whenever we see an image of ourselves, even as a reflection in the mirror, we behave better.”
While the technology might not be available yet, Ms. Carr-Templeton said there are techniques that can be used right now to help clients think more seriously about their retirement future.
“I ask clients to visualize where they will be when they retire,” she said. “I ask for specific details about where they will live and what it will actually cost to live there.”
Of course, she added, being able to show a client an avatar image of what old age will look like “could make an adviser unique.”
Dynamic Wealth Management Headlines:Crisis Report on RBS Collapse to Undergo Scrutiny
http://dynamicwealthmanagementreports.com/?p=7
May 06, 2011 /The Treasury Select Committee (TSC) has called in two independent reviewers to look into the crisis report to be issued by the Financial Services Authority regarding the failure of Royal Bank of Scotland (RBS).
May 06, 2011 /The Treasury Select Committee (TSC) has called in two independent reviewers to look into the crisis report to be issued by the Financial Services Authority regarding the failure of Royal Bank of Scotland (RBS).
Similarly, a non-executive sub-group of the FSA Board chaired by Brian Pomeroy will conduct a separate review on the process and findings of the FSA’s report. The separate review is expected to “interface as appropriate with the independent reviewers.”
The report was prepared by accounting firm PricewaterhouseCoopers. In mid-December 2010, FSA chairperson Adair Turner conceded to different calls asking the financial regulator to reveal the full report on the collapse of Royal Bank of Scotland, with business secretary Vince Cable having met with Turner to urge him to disclose full details of it as much as possible. Turner gave in to the pressure and said the FSA would publicly disclose the crisis report by the end of May. Turner earlier refused to make the report public despite the approval of former RBS CEO Fred Goodwin to open the report. Last year, the FSA closed its investigation into the RBS collapse without taking to task the individuals liable for the incident, causing a public uproar. Now, with the independent review being slated to kick off soon, further delay on the disclosure of the report is expected as TSC chairperson Andrew Tyrie confirmed that the committee has appointed David Walker and Bill Knight to conduct an independent review on the report. Walker is currently the senior adviser to US bank Morgan Stanley while Knight is the solicitor and Chairman of the Financial Reporting Review Panel and director of the Financial Reporting Council. Their appointment came after the FSA and TSC discussed on how to ensure that the report “will be seen as a rigorous and transparent account of the different factors” that helped to bring RBS down. The FSA’s report includes analysis of how RBS came to its fall prompting a £45 billion taxpayer bailout , a summary of FSA’s findings about the matters relating to RBS’s decisions, risk controls and governance processes and an assessment of the FSA’s regulation and supervision of RBS identifying any deficiencies. Walker and Knight will look into the impartiality of FSA’s report reflecting the findings of the FSA’s investigation of RBS and the findings of its analysis of its own regulatory and supervisory activities. Turner said the FSA commits to produce a “clear account of the causes of RBS’ failure” following a “strong public interest” in the matter. Although the FSA recognizes the public clamor, it takes into consideration the time required to produce the report given that “the causes of RBS’ failure were complex and multi-faceted” and that there is a “need to respect due legal process and confidentiality constraints.” Turner said he is confident that ” the final report will be seen as an open, fair, and valuable contribution to public understanding” with the appointment of Walker and Knight. RBS failed in 2008 when it faced troubles securing short-term funding to survive the global financial crisis. It failed after acquiring ABN Amro shortly before the crisis. The company was, however, bailed by the taxpayer. At present, 83% of RBS stock is owned by the taxpayer.
All About Dynamic Wealth Management Zurich
http://www.free-press-release.com/news-all-about-dynamic-wealth-management-zurich-1302878626.html
FOR IMMEDIATE RELEASE
(Free-Press-Release.com) April 15, 2011 --
As a Dynamic Wealth Management client, your portfolio will be structured using the disciplines of asset allocation, risk tolerance, and thorough understanding of your goals and objectives.
We believe in the appropriate allocation of fixed income, equity, international stocks and bonds, hedge funds, and alternative investments.
Equities
(Free-Press-Release.com) April 15, 2011 --
As a Dynamic Wealth Management client, your portfolio will be structured using the disciplines of asset allocation, risk tolerance, and thorough understanding of your goals and objectives.
We believe in the appropriate allocation of fixed income, equity, international stocks and bonds, hedge funds, and alternative investments.
Equities
Dynamic Wealth Management offers a variety of tools that can help determine which individual stocks are appropriate for your equity portfolio objectives. Our equity disciplines are style specific and can be crafted to meet customized client objectives and fulfill a defined asset allocation strategy.
At the Dynamic Wealth Management Zurich, Switzerland, we realize that no two clients are the same. Every client has different financial needs, goals, and plans. For this reason, the DWM offers a wide array of investment options to suit every client. We tailor your investment strategy to be as individual as you are.
At the Dynamic Wealth Management Zurich, Switzerland, we realize that no two clients are the same. Every client has different financial needs, goals, and plans. For this reason, the DWM offers a wide array of investment options to suit every client. We tailor your investment strategy to be as individual as you are.
In all cases, a Dynamic Wealth Management Portfolio Manager will recommend a portfolio strategy that reflects your tax situation, other assets you may already own, risk tolerance, particular family needs and constraints, and preferences you specify. Several equity models are designed to assist investors in achieving the proper asset allocation when investing in equities. In addition, customized equity portfolio analysis is available for our private preferred clients.
Mutual Funds
Dynamic Wealth Management has selling arrangements with a large number of mutual fund companies. Many of these mutual fund companies are leaders in the industry and offer expertise in different investment categories.
Unit Investment Trusts www.dynamicwmanagement.com
We offer one of the widest selections of Unit Investment Trusts available, including equity, municipal and taxable fixed income trusts. Dynamic Wealth Management creates sector trusts of companies based on work of our global research analysts.
Managed Accounts
Mutual Funds
Dynamic Wealth Management has selling arrangements with a large number of mutual fund companies. Many of these mutual fund companies are leaders in the industry and offer expertise in different investment categories.
Unit Investment Trusts www.dynamicwmanagement.com
We offer one of the widest selections of Unit Investment Trusts available, including equity, municipal and taxable fixed income trusts. Dynamic Wealth Management creates sector trusts of companies based on work of our global research analysts.
Managed Accounts
If you are looking for the advantages that a professional money manager can offer, Dynamic Wealth Management provides a broad range of fee-based money management programs.
Fixed Income
Fixed Income
Looking to add a fixed income component to your portfolio? Dynamic Wealth Management can provide access to a broad selection of fixed income securities to choose from, including CDs, deposit notes, corporate bonds and preferred securities. The results in diversified investments that seek to maximize total return while generating income and safeguarding your assets. Securities in your portfolio are monitored closely and sold when they fall below the strict requirements that you've set or no longer meet your investment needs. The process is designed to increase total returns while managing overall risk.
Trust Planning
Whether you are concerned about paying for your children's education, planning for your own retirement or exercising employee stock, you need a financial plan that works for you. Working together with your Financial Advisor, we can help you structure a plan designed to meet your circumstances and help you choose which investments are best suited to you and your plan. It is of paramount importance to properly structure and regularly review your estate plan to be sure it addresses your family's needs.
Trust Planning
Whether you are concerned about paying for your children's education, planning for your own retirement or exercising employee stock, you need a financial plan that works for you. Working together with your Financial Advisor, we can help you structure a plan designed to meet your circumstances and help you choose which investments are best suited to you and your plan. It is of paramount importance to properly structure and regularly review your estate plan to be sure it addresses your family's needs.
Dynamic Wealth Management Zurich, Switzerland has the unique capability to fully master the heart of the international business and finance center, enabling us to deliver powerful solutions from our investment platform both to fulfill individual investment needs and to support the aspirations of our business partners. www.dynamicwmanagement.com
Dynamic Wealth Management: Retirement Planning
http://www.dynamicwmanagement.com/retirement.php
Nudged by the government and buffeted by the demographic reality of retirees often living into their 90's, corporations have been rapidly offloading the responsibility for retirement income to their employees. Fortunately, many different financial vehicles now exist to help investors meet their own retirement needs. New products seem to emerge each month; some are marketing gimmicks while others may be valuable financial tools.
At DWM, we have adopted a process that relies heavily on client input and participation in all phases of the retirement planning process. Although it is a systematic approach, it is also tailored to each client's requirements. Through a series of planned steps, we work with each client to define major life goals, prioritize them and test them under various market scenarios. We then build to a recommendation based upon ideal vs. acceptable goals and risk tolerance. Many retirement programs stop here. Ours continues to full implementation of the plan and periodic monitoring of its progress. Finally, we stay mindful of new goals or priorities that may cause alterations of the original program.
We believe that retirement planning must be an ongoing process, not a glossy report that sits on a bookshelf. Only in this way can we provide the best likelihood of providing a retirement that is as free as possible from needless financial concerns.
Nudged by the government and buffeted by the demographic reality of retirees often living into their 90's, corporations have been rapidly offloading the responsibility for retirement income to their employees. Fortunately, many different financial vehicles now exist to help investors meet their own retirement needs. New products seem to emerge each month; some are marketing gimmicks while others may be valuable financial tools.
At DWM, we have adopted a process that relies heavily on client input and participation in all phases of the retirement planning process. Although it is a systematic approach, it is also tailored to each client's requirements. Through a series of planned steps, we work with each client to define major life goals, prioritize them and test them under various market scenarios. We then build to a recommendation based upon ideal vs. acceptable goals and risk tolerance. Many retirement programs stop here. Ours continues to full implementation of the plan and periodic monitoring of its progress. Finally, we stay mindful of new goals or priorities that may cause alterations of the original program.
We believe that retirement planning must be an ongoing process, not a glossy report that sits on a bookshelf. Only in this way can we provide the best likelihood of providing a retirement that is as free as possible from needless financial concerns.
Dynamic Wealth Management: Research and Analysis
http://www.dynamicwmanagement.com/reaserch-analysis.phpAt the Dynamic Wealth Management, we realize that no two clients are the same. Every client has different financial needs, goals, and plans. For this reason, the DWM offers a wide array of investment options to suit every client. We tailor your investment strategy to be as individual as you are.
Company Profile
Donnerstag, 19. Mai 2011
Dynamic Wealth Management Headlines:Financial News: Brand Burglars Target Top Asset Management Firms
http://dynamicwealth-management.com/?p=1
Fraudsters have been stealing the identity of some of the UK’s best-known asset managers to stage an elaborate internet scam.
So far Aberdeen Asset Management, Schroders and Henderson Global Investors have discovered that bogus organisations claiming to be them have been soliciting for money.
Aberdeen has been moved to paste an announcement on its home page, warning
Fraudsters have been stealing the identity of some of the UK’s best-known asset managers to stage an elaborate internet scam.
So far Aberdeen Asset Management, Schroders and Henderson Global Investors have discovered that bogus organisations claiming to be them have been soliciting for money.
Aberdeen has been moved to paste an announcement on its home page, warning
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