 |
|
 |
|
End of Year Tax Savings
As your clients and prospects begin thinking about how to save taxes at the end of year, now is a good time to speak with some of them about the significant tax savings the Small Business Pension Program defined benefit (db) plan may allow. Unlike defined contribution plans such as 401(k)s and profit sharing plans where the annual contribution is limited to $41,000 for 2004, db plans allow clients to contribute to a goal that they set in advance. Annual contribution may be as much as $100,000 or more.* |
|
|
For Small Business Owners
This program is designed for high income self-employed professionals and small business owners who are 45 or older. They can build retirement wealth faster by taking a tax deduction, growing it tax-deferred for the life of the plan and then rolling it into an IRA. This program must be funded with earned income and clients must expect contributions to be made for at least three consecutive years. A full range of investments are available through UBS Financial Services, Inc. For more information, visit our website at www.smallbizpension.com. The TPA for the program is Metavante Retirement Plan Services. |
|
|
Getting the Word Out
First, look for clients who might benefit from this plan in your own book of business. Next, consider reaching out into your community. The Chamber of Commerce, Rotary and other clubs appreciate information of use to their members. Give a short presentation at a meeting. You can use available databases of qualified plans and wealthy individuals to search by profile and geographic area. The cost for this service varies by vendor. |
|
|
* Average contribution of all new defined benefit plans established by small business clients of Metavante Retirement Plan Services in 2003 was $121,000. Average includes Small Business Pension Program clients as well as clients of similar plans. |
|
 |
|
|
Self-employed individuals have an average net worth of about $1,258,0001. These people use CPAs. If you want to reach out to the affluent self-employed, connecting with CPAs is a smart route. |
|
|
Financial Advisors often talk about networking with CPAs, but doing it effectively is something else. What do you have to offer them? Why should a CPA make a referral to you? |
|
| |
Use the Small Business Pension Program as a door opener to CPAs. By positioning yourself as knowledgeable about setting up a very-small business defined benefit plan, you achieve two major goals: |
|
| |
1. Help CPAs' Clients
CPAs want to help their clients pay less tax. If you can show them how to implement a Small Business Pension Program efficiently and easily, they have every reason to work with you. You help CPAs build their own business and you manage the client's investments. |
|
| |
2. Help the CPAs
In many cases, you may be providing CPAs with information they don't have. Many CPAs are not knowledgeable about defined benefit plans and how they apply to small businesses and the self-employed. This gives CPAs a concrete reason to introduce you to those clients who currently need the plan. |
|
| |
How to Find CPAs in Your Area
There are 350,000 CPAs in the US and every state has a CPA association. To find your state CPA society information and a link to their website, click here. You may be able to get on the agenda for a monthly meeting, provide an article for your state society's publications or put an insert into a conference packet. Lists of members may be available for purchase if you want to do a direct mail communication.
|
|
| |
E-mail a Brochure
Connecting with CPAs using the Small Business Pension Program as your leverage is easy. Click for a brochure. (pdf) |
|
| |
- Send the CPA Prospecting letter. (word)
- Call to set up a meeting.
- Describe the program. Read the material on our website and call Metavante Retirement Plan Services at 1 (866) 269-2573 to speak to an advisor about any questions. It doesn't take long to learn the essentials.
- E-mail or give the CPA a copy of the client brochure
- Ask to meet with the CPA and clients they think need to consider the plan.
|
|
| |
Build CPA Relationships
Yes, you can build relationships with CPAs in your area who'll value working with you and help clients take advantage of a defined benefit plan designed for small businesses. |
|
| |
1 Federal Reserve Board, Survey of Consumer Finances, 2001. |
|
| |
|
|
Questions? |
|
|
For more information call Retirement Consulting Services at:
1 (888) 738-1546, option 1. |
|
|
|
*UBS Financial Services, Inc. does not provide legal or tax advice. Clients should be advised to consult with their legal/tax advisor when making decisions about a retirement plan.
**Not for public use.
|
| |
|
|
|
|
|
| Learn More Live! |
|
| Join us on the |
| UBS Wealth Management Network |
| Friday Sept. 17, 2:15-2:30 EST |
| In The Retirement Plan Spotlight |
|
|
|
|
|
Success Story |
|
|
How a Prospect Saved $25,000 in Taxes Using the Small Business Pension Program |
|
|
Advisors often find clients by identifying needs and then contacting prospects with potential solutions. Laura Pierce, of our San Antonio office, had a very different experience. |
|
|
Working as 'Broker of the Day' in May, the two-year FA picked up the phone to answer a call-in and discovered a whole new world of prospects, needs and solutions. On the other end was a 50-year old emergency medicine doctor. He was calling UBS Financial Services Inc. because it was the only firm with a local office mentioned in the May 18 Wall Street Journal article about a new type of retirement plan - the small business defined benefit plan. |
|
|
An emergency room (ER) specialist, he worked at several hospitals on contract, making him self-employed. With an annual income over $300,000, he was looking to pay as little as possible in taxes and save as much as possible for retirement. He said he thought the small business defined benefit plan might help do that. |
|
Ms. Pierce knew about the program and quickly learned more. She e-mailed a copy of the plan's brochure to the doctor. A few days later, meeting with him to go over the plan's required questionnaire, she discovered he did his own taxes. She introduced him to a CPA because of the increasing complexity of his financial situation and to validate the legitimacy of the plan. |
|
|
Using the plan's website calculator, the CPA determined how much the client could contribute and then calculated the tax savings. Because of higher than usual business expenses in the current year, the client probably will be able to contribute more in the future. She sent all the information to Metavante, the program's TPA, who approved the questionnaire and determined that the contribution amount was correct. Some phone calls between Ms. Pierce, the CPA, the client and Metavante took care of the rest of the details. |
|
|
The client sent a check to Metavante for the one time set-up fee of $1,250 and the annual administration fee of $1,600. With the program set up, Ms. Pierce and the client are now discussing suitable investments to fund it. |
|
|
|
| The Results in this Case |
|
| • |
|
Time from first contact to sale:
a few weeks |
|
|
| • |
|
First year contribution: $122,000 |
|
|
| • |
|
Expected number of years contributions will be made: 5 or 6 |
|
|
| • |
|
First year tax savings: $25,000 |
|
|
|
|
"Texas ER Doctors and CPAs Need to Know about the Plan" |
|
|
Laura Pierce discovered that all ER doctors in Texas are self-employed and are in need of the tax savings available from a qualified plan. She also discovered that CPAs generally are not familiar with small business defined benefit plans and how they can help self-employed clients. |
|
|
Now she intends to use that knowledge to find more potential clients, including ER doctors, and contacts with CPAs. With her knowledge of the program, she knows that now is the time because it must be in place by Friday, December 31. |
|
|
|
|
|
Home
