small-business-case-studyFor the last three decades, our firm has worked with thousands of financial professionals… and in my ten years of tenure I have observed several trends that may help you help your clients.

The plans we design are for your high income, high net worth, affluent clientele who probably do not need to plan or save for retirement.

I sometimes think the name Pension, or Retirement Plan does more to dissuade clients and advisors from pursuing these plans than to attract them.

Although these plans are IRS qualified and approved retirement plans, your client’s biggest motivation to implement them is undoubtedly tax savings.

Perhaps a good way to identify your client as a potential candidate for these plans is to first ask this question: if my client does not need any more retirement planning would this plan still provide a personal benefit?

Here are the criteria to judge if these plans are worth exploring:

  • If your clients want to reduce their current income tax
  • If they want to keep the money working for them instead of sending it to the IRS
  • If they have current tax deductions, and tax-free growth
  • If they want to reduce their quarterly estimated taxes immediately and then invest it with their advisors as they choose

Please do not confuse these plans with 401k plans; those plans fall into the Employee Benefits World, along with health insurance, and other employee benefit plans.

Yes, they provide the owners with a benefit, but it is capped, limited, no matter how much they spend on the employees they don’t receive any more for themselves. They only get a small piece of the pie, which shrinks as they grow their business.

Business owners, professionals, sole proprietors, S-Corps, C-Corps, LLC’s, LLP’s, Self-Employed—all these corporate entities—were recently hit with large tax increases. Add to that, other government business costs, and loss of previously available offsets and the result is bigger bills with less take home pay.

You’re CPAs, and other professional advisors may be doing everything possible, within the sensible, available solutions. But there may be other ways.

One very valuable avenue has reopened with the longtime IRS-approved, Split-Funded Defined Benefit Plans. Current changes and improvements, design, and IRS rules have pushed them to the top of the list.

If your client already has a 401k plan this new, additional plan may be stacked on top just for business owners. It functions in concert with the 401k, and can provide extra credit for what the owner is already spending on the employees in the 401k Plan.

In other words, they do not have to spend twice the amount to meet IRS non-discrimination rules for their employees. The big difference is it may allow each owner, partner, stockholder/ employee, to put away an additional $100,000, $200,000, or more tax deductible, or with pre-tax dollars. Basically, this allows the owners to get equality. It’s a win/win for everyone because the extra benefits inspire owners to implement the plans.

Best Fit for these Plans:

  • Business Owners ages 40-75
  • Earned Income in excess of $400,000 – $1 million ++
  • Current lifestyle and debt needs only require half of what they earn each year to live off of.
  • Frustrated that all they can contribute personally into their current 401k or other retirement plan is about $40-50k.

Assessing and identifying these Four Key elements is the secret to identifying a good fit and new financial opportunities for your clients. Many Advisors take on a similar role since they manage money for a wide range of clients.

The next level of conversation between you, your client, the CPA, and one of our firm’s specialists, will go a long way. It will help the Business Owner realize exactly what the Split-Funded Defined Benefit Plans can accomplish for their bottom line tax exposure.

Instantly, the relationship between the Financial Advisor and the Owner takes on a completely different role. The client will feel a breath of fresh air in this tax-choked environment; that someone is finally bringing fresh ideas and solutions to the table. This new confidence in the Advisor is a value-added that will allow them to populate the plan with appropriate investments for the client.

Instantly, the Financial Advisor is separated from “the herd” and is now viewed as someone who does more than just manage the client’s money in the market. The relationship between Client and Advisor has been solidified because you now take on the role of problem solver in the client’s eyes. And honestly, isn’t that what a top-notch Financial Advisor should be doing in the first place?

by Sam Collard
Marketing, Sales, and Internship Program Director

About Us

We are pioneers in retirement planning, featuring tax-advantaged defined benefit pension plans as exit strategies for high net worth clients. We partner with top industry Advisers to bring their clients preferred solutions to achieve large income tax deductions.


Coral Gables, FL

Call Us

Phone: 1-800-717-4723

Working Hours

Monday-Friday: 9:00am – 5:00pm

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