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Preserving Wealth through Tax Alpha

by | Nov 23, 2016 | Blog | 0 comments

Every investor has two primary objectives: Wealth preservation and wealth creation. Of these two, wealth preservation is the cornerstone of a viable wealth plan.

Sources of Wealth Leakage

Wealth preservation focuses on minimizing the loss of dollars through leakage. Where are the leaks in your client’s wealth plan? The most visible is reduced wealth through market downturns, but, usually, these losses are only on paper, certain to be restored when the markets recover.

Far more insidious to your clients’ financial health are losses that are realized day after day:

    1. Taxes
    2. Overspending
    3. Excessive investment product fees

 

Taxes are the biggest financial expenditure your top, high-income clients face. And, while the other leak sources occur sporadically, taxes drain wealth constantly.

Preserving Wealth Drives Wealth Creation

A dollar lost in the wealth-planning context is not the dollar in your wallet. It’s actually a compounded dollar, with the expected wealth increase for that dollar eliminated the moment the loss occurs.

Therefore, for each dollar not lost, your client’s overall wealth compounds from a higher floor. This is wealth creation of the same caliber as an investment that grows at a fast rate.

Tax Alpha, Your High-Value Service

Your tax management services seek to minimize your high-income clients’ annual tax bill. Each investment-related tax dollar that you minimize through tax-management services increases your clients’ after-tax returns (i.e. it’s not what is earned, but what is kept). This result is your Tax Alpha.

If you’re like most advisors, you appreciate what Tax Alpha can do and want to deliver it, but the service costs and complexity are challenging. Tax Alpha shifts to a business issue: as service costs increase, your per-client profits decrease.

Advisor-Applied Variable Universal Life (AAVUL): Tax Alpha in One Step

VUL provides complete Tax Alpha through its basic structure:

  1. Tax-free portfolio income
  2. Tax-free gains
  3. No alternative minimum tax exposure
  4. Tax-free access to the policy’s wealth
  5. Tax-free death benefits

Insurance Like It Should Be: Benefits without Barriers

Advisor-Applied VUL is a vastly different – and more powerful – wealth-planning tool than your past experience may suggest. You and your clients gain VUL’s high-value benefits but the obstacles that may have prevented you from using it in the past are stripped away.

Insurance Like It Should Be

Benefits, without Barriers

You’re most familiar with retail VUL and its drawbacks:
loads; high costs; complex products; investment limitations; a difficult sales process.

Check out our PPVUL and Registered AAVUL partners’ solutions that keep VUL's benefits while removing the barriers.

Experience Advisor-Applied VUL in Action
Register for an upcoming Webinar to learn
the many uses and benefits that PPVUL and
Registered AAVUL provides
your wealth advisory practice

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