Today I wanted to talk about a concept called a “Fractional Family Office®,” which includes taxes, investments, insurance, and legal in interlocking circles. In the video above, you can see an example. This is a concept we’ve been working on since the beginning because it’s something I really wanted for my clients, and I think it’s needed.

So what is a family office? It’s basically a complete, all-encompassing service that the uber-wealthy ($30 million-plus in assets) use to connect and manage their wealth.

Say you went to an insurance agency and told them you wanted to buy a life insurance policy. In a family office, they’re going to make sure the insurance, the investments, and the taxes are all connected. They want them to all be part of one cohesive strategy. But at a regular insurance agency like State Farm, that’s not really their goal. Your agent won’t shop around for a policy; they will try to sell you on their agency’s product. They are what we in this business call a “captive agency.”

So we want to try and find the best policy for you, and not just the policy that pays the most or is captive. The problem is that as a consumer, you’re required to do all the shopping. Additionally, when it comes to the other portions like investments, there’s a disconnect. Maybe someone is selling you life insurance as an investment. Since life insurance is a low-risk investment and kind of like a bond, if you have a ton of bonds as investments, then it’s not a good idea to add insurance on top of that. Either that, or we need to take some of the bonds out since you’re offsetting it with a life insurance policy.

That doesn’t even account for the tax implications of everything we’re doing. What are the implications within an estate plan? See how this can get confusing?

It’s not all connected and it’s up to you to figure out how to connect it all. That’s why I’ve been trying for years to figure out how to solve internally. How can we use technology to solve internal problems and make sure everything is integrated? That’s what we’re working very aggressively toward. We want to bring this concept that’s available to the uber-rich down to the masses for people like you and me.

That’s our big 20-year goal that we hope to accomplish. If you have any questions about this topic or about wealth planning, give me a call or send me an email. I’d love to talk about it with you.

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