Articles & Alerts

Successful people have busy lives. Days (and nights) of Entrepreneurs, C-Level and financial service executives are filled with making important business decisions and attending client, investor and board meetings. These individuals typically have a sophisticated and complicated financial picture.

However, spending weekends creating spreadsheets to track investments and personal financial obligations should not be the reward for creating multi-generational wealth.

For successful people, time is extremely valuable. A personal Chief Financial Officer (CFO) — a professional with extensive experience in tax, personal finance and business – can help keep everything on track, helping manage a family’s hectic and complex financial life. A personal CFO helps high-net-worth (HNW) individuals simplify their lives by providing sophisticated and hands-on guidance in overseeing personal finances. The HNW individual in turn becomes more efficient and effective, both professionally and personally. The CFO helps turn the reward for success into time – for family, pursuing a hobby, fulfilling a dream or just some time to do nothing at all (a particularly elusive goal for the highly successful).

The Big Picture:  A successful entrepreneur may have an investment advisor, trust and estate attorney, tax accountant, insurance agent and a banker.   Frequently, these experts operate unilaterally, or without a full view of the client’s balance sheet. The Personal CFO can oversee the entire financial picture for the individual, coordinating the various experts’ activities and ensuring that the individual’s personal and financial goals are met. When the financial advisor recommends a large investment in a private equity fund, for instance, the CFO analyzes the tax consequences, short and long term cash flows, and liquidity issues. The CFO can engage attorneys to review contracts or limited partnership agreements and determine how a new investment may impact an estate plan. The CFO can monitor capital calls and coordinate insurance coverage upon the purchase of art, jewelry or other insurable items. Having one person coordinating financial affairs can reduce risk and helps a family avoid costly mistakes.

The outsourced personal CFO provides a family with a high touch, service oriented expert team, without the need to manage or pay for full-time employees or incur the high office expenses that come along with them.

Purchasing a stake in a new business? The CFO can evaluate the transaction’s impact on the individual’s overall finances, including cash flow, leverage, and retirement and estate planning. In addition to monitoring how investment fluctuations impact a HNW family’s net worth, the CFO works with the family’s financial advisory team to ensure regular portfolio reviews take place.  When the individual travels, missing mail, bills or capital calls need not be a concern.  The CFO can monitor and process these items and also look out for significant changes in spending habits, as well as potential fraud.

Need a high-level view of changes in net worth and year-to-date spending? Scrambling for a year’s worth of documents during tax time becomes a thing of the past. Customized, easy to understand reporting provided by a personal CFO allows a HNW family to efficiently monitor their finances from multiple perspectives.

It’s a Matter of Trust:  Ultimately, the personal CFO is the individual’s key advisor.  Along with finances, they understand the individual’s personal goals, aspirations and fears. When the family is contemplating whether to establish a foundation to both create a legacy and to satisfy the dream of being a philanthropist, the CFO can advise on different structures and tax consequences, bring in experts, and also help implement specific philanthropic strategies. The personal CFO becomes a sounding board, proactively helping the individual evaluate ideas and plans for achieving his or her goals. The CFO coordinates, tracks, and monitors investments, bills, tax consequences, and retirement and estate planning, ensuring alignment with the client’s plans.

A unique skillset makes the personal CFO the ideal choice for overseeing the finances of the HNW individual.  The CFO has a deep and holistic understanding of finance and tax.  Every investment and financial transaction, regardless of complexity, is analyzed from the perspective of how it fits into the individual’s financial and personal goals.  Attention to detail prevents oversights.  Working with a skillful personal CFO, the HNW individual can reap the reward of success – time to pursue personal interests.

Jared Feldman is a Partner at Anchin, Block & Anchin LLP and Leader of Anchin Private Client, which has nearly a century of experience providing high-net-worth individuals and families with an array of services including Tax Planning and Compliance, Family Office Support and Business Management, Accounting, Trusts and Estates, Philanthropy, Art, and Matrimonial Advisory services.