Registered Investment Advisor Podcast Episode 2 from Strategic Capital in Austin

Meet the Proven IAR’s and explore Business Planning concepts and working with the team at Strategic Capital – Registered Investment Advisors in Austin, Texas.

No content on this page or website should be taken as legal, financial, tax, planning, or other advise. Even in our endeavor to keep the conversation accurately transcribed, there may still be errors or inaccuracies. We apologize if some of the written transcription is not accurate relative to the spoken word. This content is provided ONLY for entertainment and is intended as general informational/conceptual content. A transcript is provided below.

Adam D'Acierno

Adam D'Acierno

Founding Partner - Financial Advisor

adam@strat-capital.com

I specialize in helping businesses and business owners identify their needs, define success, and implement strategies to accomplish those goals.

Bobby Russell

Bobby Russell

Founding Partner - Financial Advisor

bobby@strat-capital.com

My comprehensive process embraces investments and insurance as an asset so that your whole financial life is magnified.

Chris Hernandez

Chris Hernandez

Founding Partner - Financial Advisor

chris@strat-capital.com

I believe this combination of independence and teamwork is the best way to serve clients. It lets me provide you with the highest quality financial planning services, built for life long relationships with you.

Holistic Wealth Management

We are a Fiduciary – your financial well-being is our focal point. We integrate with your needs, and plan holistically so you get risk management built into realistic portfolio management and other important features that can enhance peace of mind and potential. You get more choice, better focus, stronger customer service and access to world class institutional-level resources with Strategic Capital

AI in Investing & Innovative Resources

Waterloo offers significant opportunity through innovative products and platforms that allow our clients better understanding of trends, better options for investing, and insights on a full-portfolio level. In addition to this exclusive offering we also have resources that some financial advisories don’t have access to. Call us and let’s see what’s possible.

Business Planning, Insurance, and access to Capital

Our practice was built for you. Traditional service offerings in the financial services sector leave a lot to be desired. We wanted to give our clients the best potential for growth in all ways, always. Our approach takes a new look at not just the usual suspects in financial planning, but also brings other resources to bear as well.

Meet our Team of Professional Registered Investment Advisor Representatives

This Team makes it possible to do what we do – Right here in Austin

Our partnership with Waterloo and our incredible team at our Registered Investment Advisory Firm in Austin allows you to continue what you do best and leverage our talents, our time and our resources to help grow, protect, and transfer wealth, no matter where you are in your investing journey. We have access to tooling and resources that opens up options and improves risk management, without giving up potential for growth or stopping you from doing the things you love to do. We should Talk!

Find the right fit with our Registered Investment Advisors today

We’d love to work with you on your planning for the future, because what’s possible shouldn’t be feared due to the unexpected – get a real plan in place and work with the right Registered Investment Advisor in Austin.

Below is a transcribed version of the podcast – it may contain errors, and may not be an exact replication of the audio of the above clip. Regardless of any inaccuracies between the audio and written variant of this episode/audio/video track, all discussion is for general informational purposes and entertainment only. None of this content should be misconstrued as investment, legal, financial or tax advice. We apologize for any inaccuracies in the written content. You may contact us to notify us of anything you believe to be inaccurate.  

Episode 2 Podcast/audio/video

Business Planning Concepts with Adam D’Acierno of Strategic Capital in Austin, Texas

About Adam D’Acierno – Business Planning Specialist – Strategic Capital

B:(Moderator): “All right we’re here again with the Strategic Capital guys out of Austin Texas we’re joined today by Adam D’Acierno, Bobby Russell, and Chris Hernandez and we’re going to talk a little bit about business planning today as we look through the suite of options and services that these guys offer in the Greater Austin area and Beyond and today I want to start with Adam here and we’ll talk a little bit about uh why don’t you go ahead and give us an intro to yourself talk a little bit about the general things you see as you’re working with clients on an initial meeting basis.” 

 

Adam D’Acierno: “Yeah thanks Ben um so typically what I I specialize and focus in on is business planning for business owners uh entrepreneurs um large companies and what that entails is from a broad perspective um helping them identify efficiencies with anything that it is inside of their organization that they are spending money on um whether that is something as it directly relates to finance and retirement or whether that is in relation to some other type of business aspect that an owner would need to be thinking of in order to make their business more efficient or insulate them from any liabilities that’s really what we look to identify with the business owners or any individuals that I meet with and then ultimately what we’re doing is we’re putting in to place these tools that their business can sponsor for the benefit of themselves to utilize personally so that’s how we tie all of our planning together from a holistic approach the business side and the personal side the tools we’re able to implement for the businesses on the business side we’re able to then put into the personal plans for the individuals when we’re doing the individual type planning so in a nutshell very broadly that is what I help with.” 

 

B:(Moderator): “Okay so I and and I’m gonna repeat something here and you tell me if you think that this closely aligns with what we’re talking about here because we’re going to get into some specifics here in a in a minute but um I think what you’re saying is you guys are using a model that’s fee based for your advisory services but in that because a lot of the people that would be coming to you anyway are deriving revenue or making income from businesses that they own or you know Equity uh positions that they hold in businesses you guys are able to utilize that umbrella of AUM you know assets under management to be able to uh Leverage key mechanisms and planning tools while also offering some of that advice that they wouldn’t normally get from an advisor just on the financial side is that correct?“

 

Adam D’Acierno: “Yeah so I would actually flip it around and say um the advice that we give on the uh retirement and business planning side from a let’s just call it retirement type plans for companies that’s obviously our bread and butter being registered investment advisor but with my background starting out in human resources and working with human resource information systems and the technology on the back end I have vast knowledge of all aspects of business and what business owners go through I’m lucky enough my wife works for a Fortune 500 company they process more payroll for Americans than any other company so I have access to that information but then utilizing them over the last 10 years as partners to learn about what business owners should be doing in addition with my schooling background of business management but but really it’s we can look at everything thing that you come to a registered investment advisory firm for on the retirement and finance planning side of things but then also we have the resources if we do not have them in-house to go partner and give you the uh ability to then insulate or Implement these other types of strategies that we don’t necessarily do in-house just this industry is kind of like medicine it’s just way too broad to specialize in the whole entire realm of what you can help a business owner with so we stick to our bread and butter and we know our limitations and when we’ve reached our limitations that’s why we’ve brought in very very good partners to come in and fill those gaps and provide those plans and that allows for us to do planning simultaneously versus having to do it in steps it just works for a more efficient process but yeah to answer your point again I’m usually business owners come to us for specific needs around retirement planning for the businesses and then they’re pleasantly surprised when we start having conversations about the business and we start bringing up points and asking them questions and then start directing them to help fill those needs in other areas other than what they specifically came to us for.” 

 

The Type of Business Services Client that fits well with Strategic Capital

 

B:(Moderator): for sure and I I can appreciate the the insights Factor right like having access to some of the insights that are you know trend lines and things that are coming from a big payroll processor or somebody who’s a large service provider in that area I myself came it up through the you know business planning aspect of thing or Arena as well and so I’m pretty familiar with some of the products and services that would be there but also like you said you know having such a broad you know depth and breadth of you know tooling that you can use and and really you know strategic planning that you can use it makes it very difficult for you guys to be specialists in everything and yet at the same time you know clearly you guys are very good at what you do uh you know according to all of the um feedback that you get and you know the different uh variety of people you guys work with so I want to talk a little bit about the the specific type of client before we get into some some of the planning strategies and ideas without going too deep you know what’s a typical client that’s working with you from a business perspective and I realize that business means something to just about everybody right I mean it might be somebody that’s working with you guys for a qualified plan and like a 401k or you know a defined benefit plan or something like that but it also might be someone who’s a small business owner that has a you know solopreneur kind of aspect where they’re doing like a solo 401k or or something like that can you talk about a general uh Target customer that you guys are normally working with or that’s looking to you for advice?”

 

Adam D’Acierno: eah um so I’d like to to look at that in two different aspects if you don’t mind so the first that we’ll look at is the single entrepreneur owner uh that you alluded to and then the second will be just let’s just call it a thousand employee um Fortune 500 company that we work with so when we’re working with single owner entrepreneurs um obviously we in the Austin Community want to grow the Austin Community so we’ll never turn an entrepreneur down who wants to come and learn about what they should be doing from a business perspective but we’re not always able to help every single entrepreneur where we’re able to start really really making an impact in the bottom line for an entrepreneur not only in the business but in their lives personally is when they start bringing in over uh let’s just say 150 200 000 in that profit um when we run into a situation like that that’s when we’re able to start implementing plans for those business owners that will allow for them to see uh similar benefits that a large company would Implement for themselves so looking at putting into place um disability income Insurance uh if if I had a money printer and I had the ability to insure my money printer to make sure that I never have that money printer stop working so that my income doesn’t go away I bet a lot of Americans would ensure that money printer well you working you are the money printer so if you’re going to insure that money printer why don’t you insure yourself um me prime example for that I got hit by a truck riding my bicycle I needed disability income Insurance um so the likelihood that someone is going to run into an issue sometime down the road where they’re going to become disabled highly likely um so not only putting into place that but looking at retirement plans for them now a lot of business owners think that okay I need to take care of my business before I need to start taking care of myself that’s the complete wrong mentality to have let’s start putting money away from our for ourselves and then continue worrying about the business because at the end of the day if we look at the history of the United States these retirement plans that were originally put into place were defined benefit plans the company was putting money in on your behalf and also making sure you were saving as well the transition happened and we went over to Define contributions 401K plans the onus is now all on the business owner or the employee to save so if you now have the responsibility to save but you had the mentality I need to take care of my business before me well that’s the whole reason why America is in the biggest deficit of retirement assets needed in order to actually make it through retirement um so those are the areas that we look um to two of the areas that we help business owners solar entrepreneurs look at and identify obviously there’s very very many more areas that we take a look into as well but then shifting over to the larger employee count businesses that we work with um so those are a little bit more tricky because of the rules that come into place with non-discrimination and testing and things like that so that’s where we go in and we help businesses identify exactly the type of benefit that they want to be providing to their employee base whether that is figuring out ways within the confines of the law to skew benefit towards highly compensated to highly compensated group or owners or whether it’s truly providing a benefit for all the employees and then going in and figuring out based on whatever it is that’s trying to be accomplished how we can accomplish that with the plan documents and within the confines of the law so not only looking at different types of retirement plans again for uh those large companies but then also looking at all the other aspects of finance and where a business spends their dollars so I’ve helped companies of that size evaluate payroll providers I’ve helped them evaluate different types of insurance policies that they have put into place or we’re thinking about putting into place for their business um I used to be the president of the the SHRM chapter uh here in Central Texas and Williamson County so really any questions that they have uh human resource related uh we have access in the knowledge between our our group inside internally at Strategic Capital but then also with all of the connections and Partnerships that we have created over the last 10 years of being in business.” 

 

What Types of Planning are potentially on the table for business owners in the Austin, Texas area

 

B:(Moderator): “For sure I I appreciate you going into some of those Concepts here because that gives us a good broad overview I think there’s a couple of points that were that really stuck out for me and specifically you know between the two concepts that you laid out being you know a solopreneur or somebody who’s you know sort of getting started but or maybe you know transitions from you know the the wage earner type to somebody who’s now running a business say as a consultant or as a you know a contractor or something to to Major you know other companies uh or you know and again as as somebody who runs a company for you know a thousand employees let’s say and those those two things that kind of stick out to me I’d love to get a little bit more in depth on some of those things are uh you know one that a lot of people who are maybe just starting their business or just starting to see some success in their business where they’re at that threshold of you know we’re bringing in you know 200 000 Plus or 250 000 300 000 in uh in in profit let’s say and uh you know we need to really start looking at you know how can we minimize some of the tax exposure and how can we maximize some of the value from a business tool perspective planning perspective to where we’re putting some more dollars off of our off of our bottom line and strategically you know allocating those towards retirement or whatever maybe one I don’t think uh and the point of this discussion here is I don’t think a lot of business owners understand that they can still access things like Define benefit plans or or you know non-lump sum uh benefit plans that uh you know sure you’ve heard of a you know Defined benefit plan where it’s like if you leave the employer you could take it as a lump sum and then you’ve got some tax consequences or some weird you know uh carryovers that happen there but a lot of businesses as you guys probably dealt with here at the the last quarter of the year I’m sure um most businesses look at like uh December 30th and December 31st as the the date to uh start their planning right and I think the the call to those that are listening to this would be you know it’s never a better time to start than January 1 or January 2 looking at especially Defined benefit plans or looking at you know allocating funds for you know tax mitigation and other uh you know strategic purposes that would normally happen at the end of the calendar year looking at them at the start of the year at least from the the smaller or medium business perspective and that’s one part that stuck out and I’ll I’ll talk a little bit about the second one and then maybe you can talk a little bit about some of those tools and things that you guys are using on a regular and the second being uh you talked about you know um really in the realm of a third party administrator you know some of the compliance things some of the Discrimination testing and stuff like that and and some of those that might listen to that first uh you know part where you’re talking about uh some of the planning on the the fine uh contribution plans and stuff like that might have thought well discrimination testing what does that have to do with anything right like that we don’t have any problems with that but really it talks it talks to the compliance aspects of having a sponsored plan or you know uh qualified retirement plan and when you when you mention the highly compensated employees I think a lot of the time when you get into especially if you experience high growth right and maybe not the Fortune 500 side or anything like that um but as you’re experiencing high growth uh and getting say 100 200 400 employees uh where you’re you’re really ramping up from medium-sized or small size business up into the larger Enterprise areas I think there’s some things that just happen so fast there’s such a high churn in income and revenue that you’re not focusing on some of the things that really matter if you’re trying to provide benefits to employees especially those that come into it with maybe not some of the holistic planning advice that you guys give whereas you guys are looking at it from the very onset as hey we really need to be careful how we allocate funds from a highly competent stated employee perspective versus you know the the standard employee so that we don’t run afoul of the compliance and the laws and the legislations that are in place but also I think a lot of people just things happen so fast in business sometimes that you might go two years with huge growth and then you’re kind of left looking back at the situation and saying oh now we’ve got to make sure we’re in compliance right which is the whole reason why we have third party administrators we’ve got you know specialty compliance consultants and Auditors and we’ve got people like you guys who hopefully can get it started right from the ground level so can you can you talk to those two kind of points that I brought up because I think sometimes you have a really um there’s no real gray area I think when people are looking at plans because they either are running into a problem or it’s because they’ve had a fair amount of success right because both of those things give you a catalyst to say oh wow I really need to take stock of what I have and and move forward with a strategic plan and neither of those times are the best times to be looking at that right so can you talk to that a little bit?” 

 

Adam D’Acierno: “Yeah great questions um so I’ll I’ll uh touch on your question about the entrepreneur transitioning from um maybe a W-2 over to receiving 1099 income um or just other types of Revenue and then I’ll parlay that into your question about the Discrimination testing and the planning that goes on from a more so TPA mindset um so I’ll give you a specific example um where most most entrepreneurs or business owners you would think when you’re working with a CPA or an accountant that they’re being very proactive versus just kind of taking orders in in you telling them hey here’s everything um so for example we had a business owner that we were working with and they were bringing in 700 plus thousand dollars of net income every single year they were filing their taxes as a sole proprietor I’m not a CPA or an accountant so I won’t go into all the inner workings of the election that can be made and how all of it works but if that individual would decide to file their taxes as an S corp so make the election to become an LLC and file taxes as an S corp versus file taxes as a sole proprietor they save themselves quite a bit in taxes and so that’s really one of the first areas that we advise entrepreneurs is hey if you haven’t asked your CPA or accountant what the most efficient tax classification for your business is that needs to be the first thing you do first and foremost because that’s the easiest way you’re going to increase your bottom line is just the paperwork that needs to be done at the end of the year or throughout the year excuse me um because when you’re a business you have to pay your own taxes everything like that on a quarterly basis um so so really what we’re looking at first is is are you the most efficient business that you can be from a classification standpoint and then we’re able to go in and start doing work so to your next point of the question is uh when is the best time to start implementing these plans well with recent legislative changes we’re able to do things now retroactively and get these plans in place a little easier uh let’s just say it’s 2023 we still have time to do things for 2022 in that tax year up until you’re tax filing for that tax year um so if you’re looking to do something for last year what better time to start evaluating what we’re going to do for the year upcoming right now um so so we do still have uh clients that are rushing in last minute trying to still do things for 2022 and when they come in they start asking us for help for 2022 that’s where we start looking ahead to 2023 and saying hey okay here’s what we can do for 2020 for 2022 we’re kind of limited with our options based on the timeline of this but if we start planning for 2023 now while we’re still in January of 2023 we open up a whole world of opportunity of uh of resources that we can Implement for your business that can then benefit you personally um then following right along talking about the TPA um I and we are not a TPA but um our work or my work specifically that I do in plan design aligns with a TPA closely so I’m also a qualified 401K administrator um that’s a designation you would see more tpas get even though I’m not a TPA I just like having the knowledge to be able to speak and have conversations with my clients and then be able to be an intermediary between the third party administrators that we utilize in administering our 401K plans and what that allows for me to do is I’m able to then take a forward look into the future and start designing plans today based on where we will be tomorrow so for example we talked about anti or non-discrimination testing um inside of a solo 401K there is no discrimination testing because you are the only participant in the plan but in having our conversations of where your business is today and where your business is going in the future if you identify to me that you are going to be hiring on employees down the road I’m going to design the plan differently based on if you want those employees to be able to enter into the plan immediately upon uh higher or if we want to set some restrictions based on the limits that we have set forth uh for us through the Department of Labor and the IRS so where I might meet with a business owner that says that they’re never going to hire another employee they’re just starting their business today I might get them set up with a retirement plan that has no eligibility requirements but if I’m working with a business owner who’s been in business for two years and they say they’re now at the part where they think that they’re going to start hiring employees in the next two or three years then what I’m going to do is I’m going to make that plan if that employee or that owner only wants to continue to try and benefit himself as long as possible I’m going to set an eligibility requirement of one year have to be 21 years old and have to work a thousand hours inside of that year in order to be eligible so that’s going to buy that business owner some time with having to actually make any contributions or have having that employee eligible for the plan until they’ve hit those eligibility requirements so not only are we looking at where the business owner is today but then where the business owner could be in the future because if we can build into the plan and immediately upon Inception that we want to have these changes or these Provisions in place knowing that we’re going to hire employees in the future well now I don’t have to go in and amend my plan to change eligibility requirements I’ve already thought about that on on the front end so that’s again helping the business owner one save time because they’re not going to have to spend the time that you need them to sign the documents to make the amendment and then two they’re not going to have to pay a fee to amend the plan document um so that that’s that’s kind of how we look at entrepreneurs coming in how we look at building plans for entrepreneurs or just businesses and General looking at today looking at tomorrow and three years down the road so that we can Implement these plans today with the idea and knowledge of where we’re probably going to be going in the future I think one of the other biggest areas that we’re receiving a lot of traction on right now from business owners are from business owners who realize that they are going to start having a large tax bill due for 2022 and they’re looking for strategies in ways that they can lower that tax bill one strategy that we’ve been implementing heavily is in utilizing types of retirement plans that afford you to save two three four five times higher than the limits of what your standard 401k will allow for you to save so um those plans are what we’re looking at implementing for those business owners that are looking for high amounts of money to stash away so that they can get those deductions that they’re looking for or just save a bunch of money in general especially right now while the market is down in the position that it is in currently.”

 

B:(Moderator): “Yeah for sure I think uh it’s really important too and I want to I want to re-highlight a couple of things that you just talked about uh there’s a little bit of repetition when we when we do these types of things because it’s important that somebody’s listening can understand you know really the holistic effort that’s that’s produced here um so you referred to SHRM earlier you know having some affiliation with SHRM  in the Texas or Austin area and uh the Society for Human Resource Management which is the the de facto standard when it comes to everything Human Resources um I think it’s important that when people look at some of the affiliations as well as some of the things like like you were talking about with uh you know being certified in in different uh you know DC plans and other things where you can go and look at it from a compliance perspective or as an auditor whether or not you use it on a daily basis in your workflow um is not necessarily super important it’s that you have the knowledge and understanding where to look so that you can look at it proactively instead of you know after the fact but you could also look at it forensically after the fact and say well here’s what went wrong or here’s how we can repair this situation because you know everybody these businesses come in all shapes and sizes in all different conditions but it’s important to understand just that kind of that having your your hand or or your level of knowledge in all these different areas you know including human resource management and understanding you know some of the things some of the legislation and some of the employee law and things that come along with um you know just in general with the human capital aspect of businesses because like you said some businesses come in and it’s just you know uh husband and wife team or it’s just a single individual solopreneur type and there are certain planning tools available and then you have you know 200 300 400 500 employee companies that would be looking to you guys as well having that knowledge not that you’re going to do all the tax planning and not that you’re going to do all the you know uh legal planning or you know worry about some of those legal implementations but that you guys will know where to start so if somebody doesn’t uh they can at least be introduced to the concepts and say you know what now it’s time to get my CPA who I already work with involved or now it’s time for me to get a recommendation on a scene.” 

 

Adam D’Acierno: “Exactly exactly and if I may interrupt that’s exactly what we’re trained to do is we’re not trained to be the expert in everything so that we can Implement Solutions uh we’re trained to be able to keep our ears turned on so that when we hear those areas where we know that we need to bring in or we know that there is help needed that’s where we’re able to go in and bring in the experts so we’re not not supposed to be experts in everything but we’re supposed to know which experts to bring in to make plans more efficient and fill in gaps.” 

 

Why finding the right Business Advisory is important – and avoiding those that cannot help you achieve goals

 

B:(Moderator): “For sure um let’s talk a little bit I’m going to step back just a little bit but let’s talk about something that I think is important for people to understand and that’s the the workflow of starting to work with an advisor like yourself or like Strategic Capital because sometimes people that I every every business owners pitched 50 times a day on something whether it be SEO for you website or you know uh I’m a consultant that does this or let us you run your PPC or your ads or whatever it is and including you know insurance and other things and you guys dabble in a lot of those Arenas just by default because so many things are connected with the finances of a business and the planning of a business when you’re meeting with someone in the first instance what are some of the things that you you commonly see that might be left on the table at that point or things that people aren’t necessarily aware of and as you start meeting with them once or twice you start identifying those things what what are some of those commonalities across most of the clients you work with as you go in what do you see that’s really a deficiency generally are there things that kind of stand out to you as well a lot of the people in the Austin area can benefit from XYZ or you know here’s something that that people in this threshold you know at the starting level of working with us might be looking at as business owners prior to even meeting with us so that we can be more efficacious when we meet.” 

 

Adam D’Acierno: “Uh I think the all-encompassing answer on that is taxes not only from a business perspective but also from a personal uh perspective I’ll just ask you a question if you had to kick something would you rather kick an empty can or would you rather kick a rock?” 

 

B:(Moderator): “All right for sure I definitely don’t want to break a toe…” 

 

Adam D’Acierno: “That’s that’s whatour our America is about to and is currently dealing with um whenever we meet with whether it’s a business owner a participant inside of a retirement plan that we help advise our goal is to help them well one of our goals is to help them have as much income as possible while having their taxable income as low as possible uh taxes everybody doesn’t really like taxes well it’s a necessary evil gotta pay taxes at one point in your life uh on money that you earn whether you pay what you owe or whether you pay more than what you owe uh that’s your decision but you have to pay that amount so everybody dislikes paying taxes uh taxes are very very low relatively to where they have been in history most of the times we see people trying to take advantage of these tax deductions in real time what they’re doing is they are instead of kicking the can they’re letting it roll down further down the road and that can is eventually going to turn into a rock and what happens is when people put their money into these plans on a pre-tax basis they’re very very surprised when they go to pull all their money out in retirement and they have significantly less money than they expected well it’s because all of the money inside of those accounts were taxable to them and they’re taxable at whatever tax rates are at that time and if we look at where we are as a country uh taxes probably are going to have to go up in the future you’re in order for us to bridge this deficit that we’re in so a lot of the times what we’re doing is we’re looking at what people are currently doing their current path and we’re plugging into our software to see okay well what if we decided that we were going to instead of taking this tax deduction today foregoing that tax deduction put our money into the Roth account and then pulling those Roth dollars out in the future does that give us a higher likelihood of success in retirement okay if the answer is yes well then let’s look to implement these changes so a lot of the coaching that we’re doing is inside of a business if a business has a match associated with it well if you put your money into the 401K most plans have the ability for you to decide if you want to put your dollars in on a Roth or a pre-tax traditional basis if that company has a match well regardless of where you put your money Roth or traditional pre-tax the company is going to match their dollars into that pre-tax traditional bucket for you so a lot of times we see people putting money into the pre-tax bucket and then being matched additionally on those dollars in the pre-tax bucket and what we’re coaching them is hey let’s if it makes sense identify and start putting our contributions into the Roth bucket and having the employer contributions still go into the pre-tax bucket now we have both buckets of money working at our disposal pre and Roth dollars just said earlier taxes ebb and flow they go up and down throughout history if taxes go up in the future and we have all of our money or some money inside of a Roth 401k option that we’ve already paid taxes on well when I go to pull my money out in the future and create income for me it’s all tax-free income as long as my dollars have been in the the 401K plan uh for for the amount that they need to be in to satisfy those Provisions but I have then increased my income without increasing my taxable income by having those dollars in the Roth bucket now if taxes go down in the future well instead of pulling from my Roth bucket I’m going to start pulling from my pre-tax bucket and pay taxes at a lower rate so as we sit right now uh with with America’s legislation that match that gets put in can only go into the pre-tax bucket hopefully in the future uh the participants will be able to direct if that match goes into either the pre-tax or the Roth bucket um but really what we’re showing them is if you’re putting all your money inside of this traditional 401k and we know that taxes are probably going to go up in the future you’re just pushing this problem of taxes down the road and it’s just going to keep accumulating accumulating kind of like an avalanche eventually you’re going to get to the point where you’re paying so much in taxes uh that that it’s just eroded all of your savings and so that’s really where we’re able to come in a lot of the times and make the biggest impact and then on a business owner perspective when we’re doing the planning for them obviously business owners are always trying to find deductions but again you’re kicking that can down the road and that can is eventually going to turn into a rock so the planning that we do for our solopreneurs and putting in those solo 401ks the coaching we give them is okay you have the ability to put your dollars into the plan as an employee of your company and you also have the ability to match and put in dollars on behalf of yourself as an employee by your company so the dollars that you yourself as an employee I call that my ee hat versus the ER ee is employee ER is the employer when I put on my ee hat and I’m contributing dollars out of my own paycheck let’s put those in on the Roth basis so that we can unfortunately have to pay taxes once or depending on your view of that you have to pay taxes once let’s pay taxes but now in the future we get everything out tax free now we don’t want to forgive all forgo all the business deductions that we could get so that’s where we then utilize and put on our ER hat and now we’re able to put in additional dollars from the company on behalf of the employee and those are the dollars that we utilize to get the tax deductions so for our business owners that do have the ability to set the their plans because the the Discrimination rules that go out the window when you’re the only person in the plan um that’s what we’re coaching them to do is put your money in on into the plan as an employee on a Roth basis so that you can pull those dollars out in the future on a certain tax preferred basis and then match yourself or put in additional contributions by the business those as we sit today have to go into the traditional bucket that gets your business the tax deduction and now everybody’s getting the best of the Both Worlds the business owners getting the deductions in real time and the employee you yourself inside your business are now starting to accumulate Roth dollars that again if they’ve been in for the certain time length thresholds you’ll be able to access those in the future tax-free yeah so really it all it boils down to taxes that’s that’s where we we um see America having one of the biggest issues in the future.” 

 

Defined Benefit Plans, Strategic business Planning, and leveraging tax advantages to ensure multi-purpose planning benefits you in the short, intermediate and long-term time horizons

 

B:(Moderator): “Yeah I appreciate you going into some of that uh you know conceptual stuff in depth because I think a lot of business owners they think you know I have to do it from one perspective you know because I need to solve this problem now when in reality you really ought to look at dollars from an income perspective as dollars not necessarily I need a deduction for my business today because I made x amount of dollars or I need to worry about my own personal planning because I haven’t done that yet and instead you’re looking at it holistically and saying there are dollars coming in I need to do the most efficient thing with those dollars and I may not even need all the income that I’m using today so there might be some strategic advantage to doing something this year versus next year or right now versus the future or using this tool versus using the traditional tool or whatever I think sometimes people look at that and they say oh no I’ve got to solve x problem when there are lots of things that can be utilized to solve problems both here and now and in the future and like for instance the example you gave um and this is why it’s so important that we talk conceptually rather than look at it from the the esoteric perspective of well if you make 100 000 and you need to do X Y and Z it’s every single case is different and as you look at those things those inputs are and that’s why you you alluded to you know software we we plug things into software in this industry because it gives us a range of tools based on the inputs right and as those inputs change it helps us to identify other areas where we might utilize planning Etc like for instance you talked about you know going into um you know a solopreneur might use uh might have X amount of income and therefore they’re eligible to uh hit the the top threshold for uh income into a solo 401K well that’s a very strategic thing to look at right you have to make a certain amount of dollars to be able to put in 56 000 or whatever it is you know as far as the IRS uh code whereas you might be able to utilize something as an individual plan right I’m going to take some of this money and put it in into a Roth IRA instead because I have an adjusted gross income of X and I meet these requirements that might make a lot more sense than trying to max out something on a DC plan from the business perspective and yet we have a lot of things being pitched to to the typical clientele that you work with as oh this is going to give you this solution this year as a tax deduction or whatever that’s the main reason why DC plans as you alluded to earlier are in place right we put the onus on the employee so that we can get the tax deduction as the employer right and it doesn’t necessarily take care of all the needs that the individual employee has which is why we see a lot of employers or smaller companies going back to looking at uh you know streams of income in retirement like DB plans and some of the other things that are available to people who make a certain threshold of income or a certain amount of Revenue in their businesses um can you talk a little bit about some of the tooling you’re normally doing when it comes to just broader businesses you know not necessarily small businesses versus large businesses but when you go into a meeting with someone are you are you talking about uh Insurance products pretty early on are you talking about things like uh legal agreements like Buy sell agreements because it’s not necessarily just about strategic planning from the financial aspect now it’s also about risk management and hedging some of that risk going forward not only from the tax side but also from a pure risk perspective how early on are you talking with some of the clients that you guys are working with about mechanisms or tooling to avert risk in the future.” 

 

Adam D’Acierno: “Yeah that’s a great question and and risk uh management and mitigation is something that we focus on heavily because uh if you look at it from a reactive standpoint if something goes wrong and you have to fix it a lot of the times you have to fix it with either capital from a dollar perspective or capital from a time uh perspective that you are going to have to be spending to correct that issue which ultimately at the end of the day uh your time can be an opportunity cost now you are not able to go generate other revenues because you’re having to deal with this issue and what that does is that throws a wrench into the planning that we do for you personally and for your business so if we know that certain situations statistically um are going to Arise at some point in your business this uh career then we want to identify those immediately and provide Solutions so that you can mitigate those risks so that they don’t turn into issues in the future and create inefficiencies inside of the planning that we’re doing now whether the business owners decide to actually act on implementing those risk mitigation strategies that’s up to them and we hope that we do a good enough job in explaining and showing them the benefit of having certain risk mitigation Tools in place but at the end of the day if if they don’t want to utilize some of those strategies really our job in total is to be as comprehensive from a planning perspective as possible so we’re going to sit down and ask questions that Encompass all aspects of business so that we can get an idea about your entire business and point out shortfalls or ways that you could possibly make that business more efficient we like to take a CFO CEO approach we are the CFO we deal in this just like a CFO would deal in their dealings on a day-to-day basis the CEO does not have enough time to be an expert in those fields so what we do as the CFO is we bring those recommendations to the table and at the end of the day it’s the CEO who has the decision on if they want to implement those or not.” 

 

B:(Moderator): “For sure and what I like to do I think this is a really good jumping uh jumping off point for a future discussion and so I do want to kind of wrap it up a little bit here make sure um that we don’t put too much out into one segment that would confuse anybody I think there’s this is a good point to kind of wrap up so if you if you wanted to add any last thoughts you had about kind of the breadth of what we’ve talked about today and and maybe just explain you know the best way to work with with you in the Austin area and Beyond uh I think that’d be helpful for those that are listening because there’s a lot to take in when you talk about business planning especially when you start to look at it from the perspective of dollars or dollars and risk is risk in taxes or taxes so in future discussions we’re going to get a little bit more to the point but is there anything you want to wrap up with from this broad overview” 

 

Adam D’Acierno: “Um, I’ll wrap up with why I think that that our clients like working with us and then also kind of what our process looks like um from the beginning to um an actual relationship so I never like to uh think that we receive any business just because people like us but more so because of our knowledge that we’re able to bring but the feedback that we’ve been given as a firm is that people want to work with us and continue to work with us because they truly can feel that we care about them as individuals or business owners and truly have a vested interest in wanting to see them succeed we have a saying at Strategic Capital um that we learn from another close close friend of ours who was on the National Championship uh team for the University of Texas when they won that football uh title back you know was that 0506 but anyway he said he liked working with us because we were plus and he said what’s a PLU he said People Like Us uh he said he likes working with us because he’s like him and he cares about people so that’s the feedback that we’ve been given from all of the clients or not all the clients but clients that have decided to give us feedback is that they can truly feel that we care and that this is not just a business relationship and typically how we start this relationship is we have an introductory meeting where really we’re learning about their business how they bring in revenue and just some goals that they have and then we share the same on our end um and what we’re looking to do in that introductory portion of the meeting is figure out if we are a good fit figure out if we are plus um that would be a good fit to work together and if at that time they decide that they would like to work with us and we would also like to work with them and I will caveat this and say we have had conversations with business owners where we just don’t mesh and they don’t necessarily want to take care of their employees well or they view their employees in a negative light and we are the ones who politely part ways but after we’ve identified that we are a great fit and work together the next step is to start gathering information about their company and the easiest way for us to have the most efficient planning meetings possible is and this doesn’t have to be brought to the first meeting but certainly can is information about the company so prior tax returns company census information that will really allow for us to go in and identify exactly how the company is working and what strategies can be put in place in order to find Solutions based on whatever that company bases is is working with from there usually that process takes about a week or two the fact-finding and then once we get to an implementation stage depending on the complexities of planning that needed to be implemented that implementation process can range anywhere from one to six weeks but after everything’s implemented we like to have a follow-up meeting to make sure that everyone understands what all has been put in place how everything is going to be working moving forward and then ultimately moving forward on a year-to-year standpoint we prefer and would love to meet with our clients on a semi-annual or quarterly basis but um Bare Bones minimum we have to meet with them at least once a year in order to review what happened the previous year and what we want to evaluate for the next year moving forward.” 

 

B:(Moderator): “For sure and I’ll just uh in wrapping up I wanted to kind of give a metaphorical concept here because I think uh as we as we get off of this uh call this segment um and if Bobby and Chris want to chime in here at the end to give some parting words of wisdom um I I think as we’re cruising along in in the business uh landscape or in the ocean of the things that we’re doing on a regular basis um we see this beautiful Glacier in you know uh iceberg in the in the foreground and as we approach we’re like wow that’s really beautiful we really want to get up close and look at it and I think when you’re looking at business planning sometimes um that is what helps you realize that there’s we’re just scratching the surface when we talk about Concepts and that everything really needs to be taken into account when you’re looking at fact finding and you talked about census Gathering and other things that that happen on the Strategic level prior to even be able to implement anything because the iceberg really is mostly underwater right and there are risks that are there that we don’t see until we get too close sometimes and so I can appreciate the holistic perspective that you guys are taking uh when it comes to strategic planning and obviously that has something to do with the name of the firm but generally speaking you know from a risk management perspective a tax planning perspective and just an understanding of the things that lay ahead uh in the waters of business it’s important to be working with a strategic advisor that can really help you to put those things together and so uh Bobby Chris Adam we appreciate you guys time today I know that we didn’t include Bobby or Chris as much today so if they want to give me parting words before we go I’d love to hear that” 

 

Chris Hernandez: “I think the only thing I want to say is on the business side entrepreneurs and business owners are focusing on it focusing on what they’re good at what is generating them revenue and then they kind of put this type of planning to the side because they need to go out and run their business and that’s where I’ve seen Adam be extremely helpful to make sure things are compliant working as they should be and that just gives the business owner more confidence to go and do their job and make a more successful business for themselves and their family.” 

 

Bobby Russell: “Definitely yeah I would have to I would have to agree with that I think um you know if you are a business owner and you’re looking to um do some Advanced business planning working with someone that specializes in business planning versus a um person that has some scratch the surface knowledge in business planning I think would put you off in a way better position in the long run so that’s why we’ve decided to structure our business at Strategic Capital that way where Chris and I work with individuals on personal planning and Adam has dedicated his 10 years in the business to only business planning so he is a very knowledgeable person in that area and we’re super thankful to have him.” 

B:(Moderator): “Right uh Bobby Russell, Chris Hernandez, Adam D’Acierno, we appreciate your time today we’re looking forward to Future conversations about business planning and uh other things that lie below the surface when it comes to you uh strategic planning in general and we’ll we’ll close with that”