Demystifying HNW succession planning

There are few events in an advisor’s career to match the sale of a business by a client. These “sudden wealth” events can bring millions to the book, but are fraught with risks that require expertise beyond the realm of many advisors.

For clients, the stress is many times greater, as they family bids farewell to a company that they may have nurtured from its inception.

“They don’t even know what they’re looking for, and they don’t know who to speak to first,” says Susan Latremoille, wealth advisor, Richardson GMP. “They’ve got to start someplace, but there’s no set place to start.”

She says the primary issue is trust. Successful family businesses often outgrow their original advisory team, which usually consists of the local lawyer and accountant, who may not even realize they are out of their depth.

Developing a team of legal and accounting partners helped to broaden Latremoille’s own practice offering.

“We started to broaden our little network because we realized there were many other services that our clients needed,” says Latremoille. “Our group started to organically grow and we found that by taking a more collaborative approach, you can achieve far more than through the traditional siloed approach.”

She points out the clients don’t know what they don’t know, and require a panel of experts to guide them through the process.

And Latremoille has published a book that does just that, entitled On the Shoulders of Atlas, and its execution is a perfect example of the teamwork that business succession planning requires.

It was written by Latremoille and fellow Richardson GMP advisor, Peter Creaghan, along with by a team of 10 professionals, including financial planners, accountants and lawyers, including:

• Frank Archibald, partner, McMillan LLP; • Linda Betts, founder, The Heritage Wealth Strategy Group; • Arnie Cader, president, Delphi Corp.; • Sheila Crummey, partner, McMillan; • Tony Ianni, president, Ernst & Young Orenda Corporate Finance; • Stephen Landau, partner, transaction advisory services, at Ernst & Young; • Ron Prehogan, president, Equitas Consultants; and • Pearl Schusheim, partner, Couzin Taylor LLP.

The authors work together as a loosely knit team on business succession plans.

The book tells the story of the Banks family and the succession planning issues faced by the patriarch Victor, founder of Atlas Plastics.

“He still wanted to have a business that his family could continue to grow with, but he wanted to diversify some of the family’s wealth,” says Landau.

Each of the book’s chapters tackles a different aspect of the plan: from the decision to either hold onto the company or sell it; how to go about selling the company and making the sale tax-efficient.

“Like most business people, they look at what gets left in their jeans after the smoke clears, and so part of the exercise in maximizing the value of their business is to minimize the tax liability that gets triggered when you sell,” says Landau.

The book also goes beyond the business aspects of the transaction, dealing with the softer side of the family business, and how it defines the family that built it.

“A large part of my work is to integrate the advisors and help families understand the advice they are given, which these days is often complex, difficult and hard to integrate for most ultra high-net-worth individuals,” says Linda Betts.

The final chapters deal with investing the proceeds of the sale and estate planning issues.

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