Owners of closely held businesses demand a full skill set from their financial advisors. These clients have their personal and business lives uniquely intertwined. Add to that the high concentration of wealth in an illiquid asset, and the tax, legal, investment and personal issues become a challenge to unwind.The No. 1 driver of financial plans for this group of clients is succession planning. All the planning issues come into play in the decision of how and when to leave the company the client has built, and in whose hands to leave it. But the owner needs to consider both the personal side of the transition and the need to create income from the illiquid asset.
"The most problematic issue business owners spend time on or wish would go away is how to transition out of the company," said Mark Balasa, CPA, CFP, of Balasa Dinverno & Foltz LLC, in Itasca, Ill. "We start pushing and probing with even 40-year-old clients about what their goals are for leaving."
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