Managing the future of your business
Like many things, when it comes to family education you’ll be most successful if you begin with the end in mind. You own a business. You’ve worked hard to get it to where it is today. One day — whether in one year, 10 years, when you pass away, or at some other time — someone else will run this business. If you’d like to decide in advance who that “someone else” will be, you need a succession plan. If you don’t have such a plan, you’re not alone. Many business owners don’t adequately plan their succession, if at all. There are many reasons for this complacency — from their reluctance to “let go,” to fear of creating family disharmony.
Ironically, the best time to create a succession plan is when you’re too busy managing your growing business. Planning a business exit can be emotional — there are often personal and family dynamics that may conflict with a business’s wellbeing. For this and other practical reasons, planning an exit requires an owner to think strategically, preferably with a professional’s help. The purpose of this type of planning is to create a clear exit path that is simple yet effective in meeting personal and business goals while preserving family harmony during what is often an emotional and conflict triggering process.
…a very rich person should leave his kids enough to do anything but not enough to do nothing… Warren Buffet
There are certain steps a family can implement to achieve open and trustful communication:
Always keep the door open to unpopular opinions.
Bring an outside facilitator to initiate and lead the process. This leads to more efficient and objective discussions.
Create a commonly agreed upon code of conduct for family meetings that will help keep discussions on lower emotional grounds.
Family meetings are more effective when properly planned with agendas tailored to the family’s circumstances. The three common agendas that concern family succession are summarized as follows:
Succession and Ownership
- What is the prerequisite education and experience to joining the family business?
- When can family members join and is it a privilege or an entitlement?
- What are the roles and responsibilities of each family member in the business?
- How is compensation set for family members?
- How is performance evaluation performed?
- Can and how are family members terminated?
- Who will take over the leadership of the business?
- At what point are family members eligible for ownership participation?
- How will ownership transition to the successive generation?
- Is ownership transferred or sold?
- Can the business be divided amongst the next generation?
- What are the exit rules and how is price set?
- What are the family's guiding principles an dare they reflected in our family mission statement?
- Should we have a family participation agreement?
- How often are family meetings and who can call one?
- What should be included in a shareholders' agreement?
- How are conflicts and objections resolved?
- Should we have external members in the board of directors?
Your personal life is busy, and your professional life is demanding. Like so many other healthcare professionals, you likely find yourself consumed with growing your practice, ensuring the well-being of your patients, and spending time with your family. Most likely, you simply aren't able devote the time necessary to properly manage the details of your financial affairs. While you're spending time doing what's most important to you, we help to manage your wealth. Whether you are just graduating from medical school or nearing retirement, a career in health-care has unique challenges that requires specialized understanding. We work closely with other relevant professionals to create a personal wealth management team. As well, when needed, my clients are connected to a vast network of skilled lawyers, accountants, and other financial professionals so expert advice is never more than one phone call away. Through this focused, personalized service we provide many wealth management services that other advisors do not in order to create a holistic, comprehensive plan that integrates your family and your practice.
Taking care of your financial health
Acting as your ‘Family Doctor’ for your finances, we take a broad look at your total financial picture and maintain a strong relationship with you throughout your life. When needed, we will refer out to specialists to look at individual issues such as changing banking needs, loans and mortgages, business expansion and life milestones. You can rest assured knowing that we are there, day in and day out, monitoring the overall financial environment and tracking your fiscal health to make sure you can enjoy the lifestyle you deserve.
A team of dedicated specialists
We have a wide range of partners that we work with that also specialize in assisting professionals like yourself. From accountants to lawyers and consultants, we will make sure you have a team of experts available to you. It is important that your advisors have experience with your type of planning, and we work to ensure that all the professionals you deal with are working together to simplify and improve your life.
Respecting your time
We understand that you are incredibly busy balancing your health-care career and home life. Time is equally as valuable to you, we will work to fit into your schedule and make our communications and meetings as efficient as possible.
Helping you answer some common questions.
- How do I get funds out of the professional corporation tax effectively?
- What can I invest in with the surplus funds left inside my corporation?
- Can I hold real estate within my professional corporation?
- I'm close to retirement; does professional incorporation still make sense for me?
- Isn't a professional corporation just a simple corporate entity which either my accountant or a general lawyer can create for me?
- Does my professional corporation protect me from professional liabilities?
- Should I transfer all of my life insurance policies into my professional corporation?
- Should I update my estate plan once I have incorporated my practice?
- I'm too busy right now to incorporate my practice – can't I do this later and make it back?
Contact us today to see how we can improve your financial health.
Understanding Your Alternatives
Whether you are retiring, starting a new job or taking time off, leaving an employer can often be an emotional time. Financial concerns and the need to make some important decisions, such as what to do with your pension, may add to your stress level, at least in the short term. If you have been a member of a pension plan for many years, the benefits that you have earned in the plan could likely be the largest source of income you will receive in retirement. Deciding what to do with this income involves many variables and can be quite confusing. And, once you make a decision, it is often irreversible.
When You Terminate Your Employment
Prior to or shortly after you have terminated employment, your employer should send you a written summary outlining your company pension plan options. You will be required to select one of the options by a specific deadline. Sometimes you may not have very much time to make your decision. And if you don’t act before the deadline, your employer may consider that you have chosen one of the options by default, which may or may not be the best one for you. This is why it’s so important to get the guidance you need to help you make the best decision quickly.
Reviewing Your Options
Speaking with your pension and benefits representative is the best way to find out about the specific options available to you when you terminate employment. The choices will vary significantly from plan to plan.
You want to enjoy a comfortable retirement — who doesn’t? But between inflation, taxes, lower interest rates and the likelihood that you will live for many years after retirement, it can be difficult to earn sufficient income and still be confident that you have enough for the future.
But having enough retirement income to enjoy a meaningful lifestyle is still within your grasp. I write today because I believe that the retirement you’ve worked toward is still possible. As an Investment Advisor, I’d like to help make sure you’ve done everything you can to:
- Reduce market risk in your portfolio
- Generate income, even with today’s low interest rates
- Strategically reduce tax, and boost your after-tax income
- Draw on your investments in the right order — and reduce exposure to high tax rates
Our institutional investment solutions combine the needs of our institutional client with the expertise of our investment professionals and the innovation of our technology team. Our institutional clients are mostly organizations with large pools of capital that may be dedicated to long-term commitments such as pension plans, or may have short-term objectives like effective cash management. For institutional clients based in Canada, we provide tailored investment solutions that span a range of asset classes such as cash and fixed income instruments, as well as equities in developed economies and emerging markets around the world. Our clients include private organizations, foundations and other non-profit groups.
With our colleagues in RBC Global Asset Management and Capital Markets, we are able to deliver a broad array of institutional investment solutions. Our investment offerings are designed specifically for treasury managers and others responsible for managing corporate and institutional cash resources. We believe that taking a portfolio of funds approach to managing short-term cash resources can increase an organization’s effectiveness in meeting its short-term investment objectives, without compromising capital preservation and liquidity objectives.
We invite organizations to contact us to discuss their investment dilemma, scenario or aspirations.