How an Ex-Goldman Advisor Serves Wealthy Clients in High-Stakes Transitions

Echoing the sentiment of other independent advisors focused on the ultra-wealthy client base, Hirschberg and Mason say the demands coming from clients are complex and growing, but so is the opportunity for firms that deeply understand the dynamics of this part of the advisory market place.

A Deeper Focus on Transition Planning

According to Hirschberg and Mason, there is nothing simple or straightforward about the liquidation of a closely held business.

As the pair point out, the stakes are surprisingly high when it comes to making the right decisions about deal structures and putting prior planning in place with respect to asset transfers and the possible utilization of trusts during the process.

For some clients, they warn, failing to efficiently enact a deal can result in literally tens of millions of dollars of effectively squandered wealth.

"We are an after-tax firm," Hirschberg says. "Everything we do is about after-tax returns, and this philosophy means we are considering all the potential estate planning techniques and weighing, for example, what types of stock you are going to buy, sell or give away at what time during the deal process."

As Mason emphasizes, a lot of these business owners are very sophisticated in their own world, having developed some amazing companies. But that doesn't mean they have the skill set needed to effectively establish and operate their own private family office.

"For example, the typical business owner isn't going to understand the ins and outs of grantor retained annuity trusts," Hirschberg says. "Yet, this can be such a powerful tool while you are doing a deal. That's why our clients need us to be involved from the very beginning of the ownership transition process."

The opportunity for added value is huge, Hirschberg says. "In one case, for example, we were literally able to help a client save $110 million in taxes during their transaction."

The Personal Side of UHNW Planning

In addition to critical choices about deal structures and tax mitigation strategies, Hirschberg and Mason agree, highly successful entrepreneurs must also think deeply about what their day-to-day life will look like post-sale. They also must be prepared (by their advisors) to face some stressful moments during the transaction process.

"It might sound dramatic, but the emotion of a deal like this often resembles what it is like for a parent to see their kid go off into the world," Hirschberg suggests. "This business is likely something they have built and seen grow over many, many years. Every now and again, you do get those 11 p.m. phone calls, and you just have to listen and coach people through their concerns."

While emotions generally do run high during the deal process, not all clients are alike, Mason points out.

"Some clients are just more transaction-focused, and they really look forward to getting the deal done and generating that liquidity," he explains. "Whatever the case is, you have to listen and be empathetic. Where we can provide the best support is by bringing an honest answer to every question they have, good or bad. Very much like a doctor — you have to be candid with your patient, or in our case, the client."

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