To properly advise their clients, and maximize the value of their practice, investment professionals who deal with high net-worth clients need to be familiar with the basics of private foundations. While there are several charitable vehicles available for those wishing to create a charitable legacy, private foundations continue to be the “gold standard” against which all other vehicles are measured.
At Sterling, we want to familiarize you, the investment professional, with the basics of private foundations, how they can help your clients, and therefore how they can help you. In particular, focus is on how professionals can build the profitability of their business while at the same time helping their clients use private foundations to achieve a variety of important planning goals.
Benefits for Investment Professionals
There are thirteen important reasons that investment professionals should be able to help their clients gain the benefits of a private foundation. These include:
- An immediate increase in total client (i.e., personal and foundation) assets under management
- Significantly increased total client (i.e., personal and foundation) assets under management in the long run
- The potential to increase revenues by moving assets from the low end of the fee scale back up to the high end
- The establishment of a permanent money management fee stream from the foundation
- Excellent opportunities to take profits in highly appreciated stock positions, without incurring capital gains taxes
- Opportunity to increase total portfolio after-tax returns by holding taxable income producing assets in a tax-exempt foundation
- An additional tool to attract new clients
- An additional opportunity to cement lifetime relationships with client and their heirs
- The opportunity to keep under management retirement plan assets upon death of the client (without planning these may be taxed at 80%).
- An additional reason to request and receive referrals for new business
- The ability to preempt potential competitors from stealing your clients
- The opportunity to create goodwill in the community
- For advisors who provide life insurance, the private foundation offers important additional life insurance marketing opportunities.
In addition to these powerful benefits, for foundations which are referred to Sterling Foundation Management under an appropriate referral arrangement, you may receive significant referral fees.
How Sterling Foundation Management Can Help You
Sterling Foundation Management makes it extremely easy for you to provide your clients with a "turn-key" private foundation. Sterling provides comprehensive foundation administration and management services. In effect, we do everything except the investment management and custody functions.
By removing the paperwork and compliance burden from you and your client, Sterling enables your client to gain all the benefits of a foundation with none of the hassles. This makes it easy and convenient for you as a professional advisor to recommend a foundation for your qualified clients.
Sterling's services complement most advisor's services. Since we do not manage assets or provide investment advice, our services are not competitive with investment advisors, financial planners, wealth managers, insurance sales, etc. In fact, in the great majority of
cases, our services strongly complement those of investment professionals.
In addition, Sterling's generous referral fee program can help you put dollars directly in your pocket for each foundation you refer to us.