Monday, December 8, 2008

What Other Tax Changes Could Be In Our Future?

We are well aware of the potential income tax increases that may occur under President-elect Obama’s administration. The next question we should be asking ourselves is “What other tax changes are in our future?” Well, one can only speculate at this point, but there are several options for those looking to protect their assets from taxes that may be perceived as tax “loopholes”. These could certainly become the next target under the new administration. Options such as Grantor Retained Annuity Trusts (GRATs) as well as discounting for private company shares into Family Limited Partnerships (FLPs), in my opinion, would seem to have a bull’s eye on them.

A Grantor Retained Annuity Trust is one of the estate planning techniques based primarily on interest rate assumptions. The financial goal is to pass the appreciation of the assets to the beneficiaries of the trust free of gift and estate tax. Many are now guessing that GRATs may be abolished altogether or, at least, be modified from their current form. Most importantly, these changes could be made retroactive to January 1, 2009.

Family Limited Partnerships (FLPs) allow individuals to transfer personal or business assets into a partnership where limited ownership can then be granted to children or other family members. This not only lowers the estate's taxable value, it also ensures that certain assets remain in the family.

Why do you think the new administration would want to cause such a fuss over these loopholes? Well, the answer is pretty clear when you look at IRS statistics. The IRS found that U.S. companies paid federal income taxes on their reported U.S. profits at far less than the current 35% statutory rate. In the first presidential debate, Obama said: "There are so many loopholes that have been written into the tax code...that we actually see our businesses pay effectively one of the lowest tax rates in the world." In fact, newly released data from the IRS show companies paid federal and foreign income taxes on their U.S. book income, the amount reported to shareholders, at a rate of 25.3% during 2005, the most recent year for which data were made available by the IRS.1 The difference between this rate and the proposed tax increase will offer a substantial revenue source if these loopholes, as well as industry tax breaks, are contained.

The next big question is then, when will these changes take place? Here is where opinions seem to differ. Some tax experts call for tightening corporate loopholes and ending some industry tax breaks quickly, while others say such moves could be counterproductive and end up killing jobs in an economic downturn. Many economists say stimulating the economy, even if it means a record-level deficit, is simply more important right now. So, for many reasons, it looks like 2009 will be a “wait and see” year for estate planning.

No matter what happens with these potential changes, it is important to remember that you should be bringing these ideas to your clients and incorporating the potential for change into the exit planning for your business owners. Who knows, perhaps these potential changes will motivate your owners to take action on these important items, given that there is a bit of uncertainty as to where things are going to land.

So, as we continually encourage, be pro-active with promoting exit strategy planning to your business owners . . . who knows what is going to happen in Washington next year ??

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide exit strategy planning services to business owners as well as education and training programs for professional advisors. To learn more about John's Exit Strategy Services and his recently published book, "Exiting Your Business, Protecting Your Wealth", visit

Thursday, December 4, 2008

The High Road of Marketing

As a follow up to our continued focus on assisting advisors to get in front of business owners, I wanted to offer another insight into marketing your practice to get - and stay - in front of your business owner prospects.

Last week I talked about strategies for making a live presentation to business owners. That is going to be the topic of our hour-long marketing call next week.

To add to those thoughts, I wanted to offer some more insights. First and foremost, although my business grew at a very fast rate while I was making the prospecting calls and filling educational seminars, I found that my ideal clients eventually came from other sources . . . namely referrals.

Now, it is no great secret that most advisors work on presentations and networking to grow their businesses. Both take time and energy to produce results.

But what else can you be doing to generate consistent results with your marketing?

My friend Bill Losey will be sharing more than 54 different things that he does to market himself, make TV, print and radio appearances, all with the result of having a consistent stream of qualified prospects clients come to his practice with their business.

We will be encompassing these strategies within five major topics for our discussion.

  1. How to avoid the BIGGEST mistakes advisors make with their marketing.

  2. Why most advisors fail to consistently generate new leads.

  3. How to have ideal prospective clients raise their hands, pre-qualify themselves and contact you to do business.

  4. How any advisor can go from being relatively unknown to world renown in 24 months or less using the media and the internet.

  5. The ONE tool every advisor needs to build their platform and help more people.

Bill is a high-energy, brilliant advisor. What is most incredible is that Bill does all of this work - and manages his base of clients - from a home office with no other full-time assistants.

Whether or not you are a Member and will be on this call, I can tell you that the secret of my consistent results over the past 18 months has been the effective use of a combination of tools to consistently market my practice (not the least of which is this newsletter which is sent out [almost] every week). Most recently my marketing has expanded to national level media coverage to include TV, radio, podcasts, print and live presentations.

What is the absolute key to developing these strategies?

Simply making the decision to pursue multiple opportunities to market your business and committing time to do so consistently.

Establish a strategy. Organize your thoughts and actions. Stay with your program. And, most of all, be patient. Results take time.

The good news is that in this slowing economy, you can refocus your efforts towards increasing your communications with clients, centers of influence, and prospective new clients. The information that you share with any one of these groups can be leveraged to be shared with all of them. In this manner, your basic business practices can become a part of your overall marketing program to reach more prospects on a consistent basis.

So, along with live presentations to business owners, you should be focusing your business marketing efforts on many other channels as well. The live presentation gets you out from behind your desk and into the market where opportunities are created. The myriad other marketing techniques assist in driving the market of opportunities to your door. Together, you can build a campaign for 2009 that will fight back the slowing economy and drive more business to your practice.

When you couple these techniques with the powerful message that exit strategy planning holds in the marketplace, you have a combination to make 2009 a banner year for your practice.

Still thinking about getting involved with business owner in designing their exits and positioning your advisory practice to grow exponentially? Sign up for our risk-free Membership and join us for this afternoon's call.

This is one that you will not want to miss and could have the ideas that you were looking for to motivate you to build your practice stronger and better in 2009 than any time in the past.

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide exit strategy planning services to business owners as well as education and training programs for professional advisors. To learn more about John's Exit Strategy Services and his recently published book, "Exiting Your Business, Protecting Your Wealth", visit

Wednesday, December 3, 2008

It Works....Can't Thank You Enough

Is exit strategy planning working for your advisory business?

Well todays article illustrates a myriad of ways that it is working for other advisor's businesses.

We all know that there are millions of small business owners who need assistance with their businesses and business exits. Our Workshops reveal secrets about how to approach business owners with this topic (discussed in last week's newsletter). Advisors who follow the steps towards approaching business owners are getting results . . . and thanking us for sharing these secrets. In fact, it really comes down to confidence in the concept - that is the secret. And the key is getting started. When advisors challenge themselves to expand in this area, results are often-times immediate.

The advisors below agreed to have us share the successes that they have achieved with their marketing of this idea. I thank them once again and hope that this encourages more advisors to continue discussing this important topic with business owners.

Attendees at our latest 2-Day Exit Strategies Training Workshop report the following . . .

John, . . . A [marketing] mailing was sent out last Thursday [on the topic of exit strategy planning]. On Monday I received a telephone call from one of my clients who read my flyer. He wants me to assist him with obtaining some investment money for a company that he is involved with. His company provides alternative fuel sources through sun and wind. He has several potential contracts but needs some start up capital...He says he has about $40 million of work he can complete if he gets about $2-3 million.

Commentary: In this case, our Member will work with Pinnacle's network of transactional service providers (and cultivate his own relationships in his local market) to assist this 'stay and grow' / early stage business with achieving their capital raise. Along the way, he will be positioned in this relationship to provide guidance and support over the years that the company builds, and will assist with their personal planning for the potential future sale of this profitable business.

I was meeting with a new insurance agent for my business. We were discussing each others professions. I explained to her that beyond my accounting practice I have a new company that specializes in helping business owners exit their business. It just so happened that her father was the owner of the agency and she and her brother and sister were also in the agency. The father was working less and less, the kids were working more. She told me that she didn’t believe they had a plan and is very interested in meeting with me and her family to discuss options.

Commentary: These are the types of situations that we at Pinnacle see all of the time. Family businesses and small businesses that have succession planning issues surrounding the transfer of the business. Since 'gifting' the business is one of our 5 major exit options, this advisor is well versed in beginning a conversation about the merits of a gifting program - particularly as to the tax-efficient transfer of this wealth from one generation to the next. Again, it was just a matter of beginning the conversation. The advisor will charge a fee for the planning and position himself with two generations of owners in this business.


I sent out a press release to notify the community of the new company specializing in exit strategies. I received a call this morning from a 65 year old business owner who has a partner and wants to sell his business.

Commentary: Again, what more is there to be said. You spread the word that you can offer these services and the opportunities present themselves. If you have heard any of my Pinnacle coaching calls you come to see that the opportunities are always right in front of you . . . all you need to do is step up to meet them. This 65 year old will receive advice and guidance that he invariably needs to protect his wealth and - in all likelihood - step into a successful retirement.


I sent out a predictions story regarding the future of business transitions. It is going to be published by a “Family Business Magazine” and I have been asked to be interviewed by a franchise based publication regarding the topic.

Commentary: Yes, the media is becoming aware of the need for this service. Our Pinnacle office just launched a campaign to approach the New York / Financial media to spread this message nationwide. You can begin in your local markets and brand your practice around this valuable concept.


We held a seminar today entitled "Managing Family Wealth in Changing Markets". When I addressed the attendees (10 prospects with a minimum of $1 million of investable assets) I went off script and mentioned I help owners of privately held businesses exit their businesses. The only thing I said was that exiting does not mean selling, there are other options. One couple approached me and said they are trying to transfer their business to their children and weren't sure how to do that efficiently. We are going to talk next week.

Can't thank you enough.

Commentary: Again, it is simply a matter of letting the owners know that you can help. Once you open that door, you allow the business to come through it. The problem that we see most often is that advisors do not want to begin the conversation. This is unfortunate because the business owners in your local markets really need this help . . . and, because we are all paid for value of the services and advice that we provide, it is natural that we will make more money as advisors offering this unique service.

If you want to gain the confidence to have the exit strategy planning conversation, give our Silver Level Program a try.

Or order our Home Study Course

Either way, you will begin to make exit strategy planning a part of your practice. With a small effort, you may end up getting some rather dynamic results.

Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide exit strategy planning services to business owners as well as education and training programs for professional advisors. To learn more about John's Exit Strategy Services and his recently published book, "Exiting Your Business, Protecting Your Wealth", visit