ANTHONY M. SARDIS, JD, LLM

Transcription

1 YOUR WS+B TEAM ANTHONY M. SARDIS, JD, LLM PRESIDENT, IIAG PROFESSIONAL EXPERIENCE INDUSTRIES Insurance President of Insurance & Investment Advisory Group (IIAG). Consults with individuals and businesses on insurance services, including: Life insurance Health insurance Disability insurance Long-term care insurance Annuities Professional experience includes work for insurance companies, banks, law firms and accounting firms. Has lectured extensively throughout the country to advisors in the affluent and business markets and has been quoted in several major publications concerning deceptive sales practices. CERTIFICATIONS / EDUCATION BA degree in business management, Yale University Juris Doctor (JD), Rutgers, The State University Masters of Law (LLM) in taxation, New York University Insurance & Investment Advisory Group (IIAG) is an affiliated company of WS+B providing integrated access, sales and consulting experience to the affluent and business markets. IIAG works closely with clients and their advisors to provide comprehensive, needs-based solutions. IIAG does not have employment relationships with any vendor which ensures the independence necessary to provide unbiased advice. For more information about IIAG, please visit BE IN A POSITION OF STRENGTH 5

2 ANTHONY M. SARDIS, J.D., LL.M Smoke Rise Drive Warren NJ PROFESSIONAL EXPERIENCE Insurance & Investment Advisory Group, LLC 2004-Present Managing Member & Founder Proprietary Joint Venture. Built a joint venture with major accounting firm providing insurance platforms allowing CPAs to work with audit clients on a commission basis Sales. Generated multi-million dollar profits and recurring revenue streams to build equity. Relationship-Based Selling. Built competitive cross-sell capabilities with strategic alliances to enhance revenue and trusted advisor status Exemplary Client Retention. 100% client retention. Innovative Marketing. Differentiated offerings from competitors by developing innovative strategies to enhance sales opportunities. - Payroll Platforms (co-branded and white-labeled) to facilitate cross-selling in alternative distribution channels (e.g., banks, CPAs, P-C firms). - Non-traditional planning techniques such as captive insurance companies and asset protection which generate core revenue directly to referral sources. Prudential Financial Vice-President, National Accounts, Prudential Select Brokerage Sales. Increased sales growing market share to #5 from #16 on company s largest account. Third-Party Leadership Team. Responsible for reengineering brokerage into main driver of Enterprise growth by focusing on product and delivery enhancements. Strategic Management. Initiated development of Enterprise-wide management of strategic relationships coordinating life insurance, annuities, retirement plan services, long-term care, education, licensing and banking to improve cross-selling opportunities. Property & Casualty Divestiture. Member of merger & acquisition team responsible for selling Prudential s proprietary property & casualty division. Vice-President, Prudential General Agency Officer-in-Charge. Designed, sourced and implemented distribution strategy for all facets of start-up profit center. Products included life, annuities, disability, long-term care, retirement plans, property/casualty and health insurance. Producer Satisfaction. Increased producer satisfaction 27% resulting in less selling away. Sales. Increased overall annual sales 92% and per agent sales 111% without negatively impacting proprietary share. Profitability. Transformed business to profit center from cost center by improving profits 34%. Budget Management. Substantially cut budget through a combination of vendor management and standardization of procedures. Chairman, New Product Committee. Responsible for reviewing all products, proprietary and nonproprietary, proposed to be sold through agency distribution. MetLife Financial Vice-President, MetLife General Agency, Inc. Responsible for sales, marketing and distribution of nonproprietary products to retail channel. Generated a 49% increase in revenue and improved profitability. Officer-in-Charge, Advanced Marketing (Brokerage and Individual Business). Provided sophisticated estate, compensation and business succession planning. Greenbaum, Rowe, Smith, Ravin & Davis Attorney (Tax, Trusts & Estates) Coopers & Lybrand

3 Tax Consultant Chemical Bank Commercial Credit Analyst (Middle Market Division - $10 million to $1 billion in revenues) EDUCATION Yale University B.A. for double major in Economics and Psychology (1989) New York University School of Law Rutgers University School of Law Joint Degree Program: LL.M. in Taxation and J.D. (1993) GOVERNMENT & PUBLIC SERVICE Co-Founder, Camp Weahqua, a non-profit promoting Green Therapy for abused and specials needs children Member, Somerset County Educational Services Commission, 6/08-4/11 Member, Warren Township Board of Education, 4/08 to Present Treasurer, Warren Township Bicentennial Committee, 2006 Intern, Middlesex County Prosecutor s Office, 1992 Intern, Attorney General of New Jersey, Department of Environmental Protection, 1991 LICENSES Insurance. NJ (resident), multiple states (non-resident) FINRA. Series 7, 6, 24, 26, 63 & 65 Law. New Jersey, Pennsylvania & Federal Bars (retired status) SELECTED PUBLICATIONS Sell Financial Products Wisely, Journal of Accountancy, Jan-07 Measure Twice, Cut Once with Single Parent Captives, Construction Executive, Jan-08 Life Insurance Private Pension, Estate Planning, Feb (k) Look-Alike Plan, CLU/ChFC Journal, Nov-97 Simplified Cross-Purchase Buy-Sell, National Underwriter, Sep-99 PERSONAL Married with 4 Children, 1 st Generation American, Acoustic Guitar, Basketball

4 CAPTIVE INSURANCE COMPANIES RISK MANAGEMENT & WEALTH TRANSFER

5 WHAT IS A CAPTIVE? Limited Use Insurance Company Common Owner Issues Insurance Policies on Related Companies State Authorized & Regulated Operating Company Premiums Policies Captive Client Owned Asset 2

6 KEY BENEFITS Risk Management Wholesale Insurance Costs Improved Claims Processing Customized Coverage Terms Income Tax Planning Ordinary Deductions w/o Recapture Conversion to Capital Gain on Termination/Dividend Management of Excessive Compensation Wealth Planning Value of Captive Is Outside Taxable Estate Premium Payments to Captive w/o Gift Taxes Creditor Protection 3

7 ANTICIPATED GROWTH In General More than 10% of worldwide premium 400% increase in captives from 1980 to % of Fortune 500 companies have one Revenue Ruling Created Two Informal Safe Harbors Middle Market Application Professional Guidance Major CPA Firms Consulting Firms Trust Companies A Rated Ins. Co. Sponsors 4

8 TYPES OF CAPTIVES Pure Captives Common Parent Limited or No Unrelated Party Risk Group Captives (appendix) Aggregated Premium for Discounts Risk Shared Openly Among Group Rent-a-Captives (appendix) Aggregated Premium for Discounts Risk Shared, but Limited Among Group 5

9 PURE CAPTIVES Common Owner (Premium Driven) Access to wholesale premium (+/- 30%) $1,000,000+ existing premium Replaces all/portion existing insurance Common Owner (Planning Driven) Governed by IRC 831(b) $1,500,000+ net revenue $1.2 million deduction to operating co. $1.2 million tax free premium to captive Closely-Held Ins. Co (CHICs) Technically an 831(b) format Except... captive owned by family Captive assets pass w/o transfer tax Capital gain on liquidation/dividend Operating Company Parent Operating Company Common Owner Premiums Policies CHIC Premiums Policies Captive Family Trust Captive 6

10 BASIC ECONOMICS No Captive (000s) Income 1,200 1,200 1,200 1,200 1,200 1,200 Less: Deduction Tax Inc. 1,200 1,200 1,200 1,200 1,200 1,200 Less: Inc Retained Value 720 3, ,800 14,400 18,000 Less: Transfer 50% 360 1,800 3,600 5,400 7,200 9,000 Net to Heirs 360 1,800 3,600 5,400 7,200 9,000 Captive (000s) Income 1,200 1,200 1,200 1,200 1,200 1,200 Less: Deduction 1,200 1,200 1,200 1,200 1,200 1,200 Tax Inc Less: Inc Captive Value 1,200 6,000 12,000 18,000 24,000 30,000 Less: Transfer 50% Net to Heirs 1,200 6,000 12,000 18,000 24,000 30,000 Note: Costs of operating captive, claims paid and entity level taxes excluded. See appendix for details. 7

11 LEGAL FRAMEWORK Notice Captive must have the bona fides of an insurer Captive must be predominantly engaged in insurance business Captive must shift and distribute risk among a group of insureds Rev. Rul Unofficial safe harbors established 3 rd party risk must be more than 50%; or No bona fide subsidiary accounts for more than 15% of the risk No Change IRS Audits State Promotion. >50% of states of enabling legislation 8

12 3 rd PARTY RISK No Captive Income 40% Subject to Claims of Creditors Subsidiary Based Captive Risk Shared Among 7 or More Related Companies No 3 rd Party Insurance Risk Risk Based Captive 51% Aggregate 3 rd Party Risk Risk Segregated into Sub-accounts 9

13 RISK BASED CAPTIVE $1,200,000 49% 51% Investments Life Insurance 5.1% 5.1% 5.1% 5.1% 5.1% Tax Savings (40%) Aggregate Risk in the Pool (51%) Risk Is Spread Among Independent Cells Risk Per Cell (5.1%) 8 Failed Cells to Exceed Tax Savings Principal Returned at Year-End 5.1% 5.1% 5.1% 5.1% 5.1% 10

14 RISK EXAMPLE Annual Premium 3 rd Party Risk Inc. Tax Savings ,200,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200, , , , , , , , ,000 1,260,000 1,680,000 2,100,000 4,520,000 + Net Risk 192, rd Party Risk Is 51% of Annual Premium Needed for the Risk Pool 3 rd Party Risk Does Not Accumulate Because Principal Is Removed from Risk Pool at Year End If No Claims Income Tax Savings Assume a 40% Rate Net Risk Is 3 rd Party Risk Less Tax Savings. Without Captive, Taxes Are a Guaranteed Loss Net Risk Can Be Considered an Inexpensive Premium Because Client Obtains a Valid Insurance Policy Note: Costs of operating captive, claims paid and entity level taxes excluded. See appendix for details. 11

15 PLANNING OPPORTUNITIES Income Tax Reduction Estate & Gift Tax Reduction Asset Protection Executive Incentive Compensation Reinsurance Profits Split-Dollar Family Limited Partnerships Trusts 12

16 EXIT STRATEGIES Capital Gains Rates Conversion to S-Corporation Basis Swap 13

17 WORKFLOW Preliminary Feasibility Analysis Pre-Screening of Candidates No Cost Feasibility Analysis Formal Report for Go / No-Go Actuarial Study Financial Due Diligence Fee Based Formation Operations Annual Review 14

18 APPENDICES 15

19 GROUP CAPTIVES Coop formed to increase group buying power Independent companies with similar risks (e.g., contractors, physicians, hospitals) Control is ceded to the group Profit Co. 1 Co. 2 Captive Co. 3 Loss Each member shares in profits and losses of the group Co. 4 16

20 Risk RENT-A-CAPTIVES Member rents a cell and shares in profits/losses of that discrete cell Risk Cells may be segregated based on insureds or types of risks Sponsored a controlled by an independent insurer Used for smaller businesses Co. 1 Co. 2 Insurer Co. 4 Co. 3 Risk Key issue is sufficient risk sharing and distribution Risk 17