Sample Clients

The Business Owner

A single client engaged us to help him significantly reduce taxes on his mid-six figure annual income, invest for an early retirement, obtain the appropriate amounts and types of life and disability insurance, and coordinate an estate plan with his attorney. In the first three years of the engagement, we helped this client amass over $500,000 of pre-tax money in a retirement plan. After several years of advising him, a competitor offered $6,500,000 in cash and $35,000,000 in shares of their publicly traded stock to buy his company.

We brought in a tax attorney to help structure the sale, allowing our client to defer his capital gains taxes for over twenty years. Due to our client's philanthropic goals, we had also created a charitable vehicle to which he had donated his highly-appreciated company stock prior to the sale contract being executed. For this, he obtained a large tax deduction to offset other income and avoided capital gains tax when the sale occurred. Our planning allowed him to donate over $1,000,000 to the charitable causes he was most passionate about at a net 'cost' of less than $300,000.

Due to the publicly traded stock he received in the acquisition, he found himself with excessive exposure to a non-diversified asset that he had no control over. Working with his acquirer's general counsel, we helped to negotiate the ability to hedge this concentrated stock position, protecting a sizable portion of his net worth from a possible decline in the stock's price.

The Executive

A senior executive with a major Hollywood studio engaged us to help him decide when his optimal retirement date should be, and how to maximize the various assets he owned. These included a 401k, stock options, a deferred compensation plan, life insurance, a stock and bond portfolio, and several commercial real estate investments.

After doing a comprehensive financial plan, we found that there were two major issues: 1) there was too much exposure to the company's stock, and 2) his commercial real estate was not performing as well as it could be.

We worked with the client, his CPA, and a company benefits professional to reduce his exposure to the company's stock. Our strategies included exercising and selling stock options in a tax-intelligent manner, changing asset allocations within his 401k and deferred compensation plan, and hedging company stock that he had acquired in his own portfolio.

After analyzing the real estate operating statements, rent rolls, and similar properties, we assisted the client in refinancing two of his buildings and selling another (through a 1031 tax deferred exchange). These changes took his cash-on-cash yield from 4% to over 9% while not creating any additional tax liability.

The Philanthropist

A philanthropist with a substantial (mid eight figure) net worth retained us to oversee every aspect of her financial well-being, including portfolio management, philanthropic policy creation, grant structuring, real estate advice, estate planning, insurance review, business strategy, communication about money with children, and education planning. A primary question of hers was "How much can I afford to give away each year?"

Using all the relevant data on her income, expenses, assets, and goals, we created a lifetime cash flow projection. We then used Monte Carlo simulations to see how her plan would hold up through a wide variety of future economic scenarios. We even went so far as to see how she would fare if the Great Depression were to begin again tomorrow. The result of this analysis was that she could increase the amount of her annual charitable giving more than ten-fold without significantly risking running out of money.

We then worked with her and her estate planning attorney to set up the right types of philanthropic entities through which to effect her new giving program. We managed the assets within her new trusts and charitable foundation in our capacity as a fiduciary, and made sure that cash disbursements went out to her recipients in a timely fashion.

The Inheritor

After inheriting $3,500,000 from her late mother's trust, a middle-aged woman and her husband initially tried to make investment decisions for themselves. They worked with the attorneys to finalize the estate, and then placed the money with a well-known national brokerage firm. Their broker would call with suggested investments, and they would generally go along with the suggestions, not knowing how to evaluate them. At first, the investment markets were rising, so they felt good about the relationship. But then the stock market began a prolonged correction. After 18 months, they had been hearing so many bad things about stocks that they got out of the market and put the entire trust in a local bank money market fund.

After about six more months of lackluster stock market performance, the major indices began to rise, earning over 20% in the following nine months. It was at this time that their estate planning attorney referred the inheritors to Abacus, and they called us to develop a cohesive investment and financial plan.

After learning more about their goals, which included educating their three young children and taking care of an ailing parent, we helped them create an investment strategy that they would stick to through good and bad markets. One of the first recommended steps was to diversify out of most of the individual stocks that had been held by their parents for decades. We provided a detailed cash flow projection to help them understand how much they could afford to spend each year without risking running out of money prematurely, and then managed their assets in accordance with the agreed upon policy for years to come. Each month, we wired a set amount to their local bank, which they used to cover their living expenses. The Abacus process and investment philosophy had allowed them to stop worrying and second-guessing their investment decisions, and to focus on their kids and other life interests.