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WEALTH ADVISORY SERVICES
FOR BUSINESSES
 
Legend Financial Advisors, Inc.® (Legend), with its headquarters located in Pittsburgh, Pennsylvania, provides a number of Wealth Advisory Services to businesses.  Some of the areas that we focus on include:
 
  • Business Entity and Structure Analysis
  • Banking Arrangements
  • Board of Directors or Advisory Board Membership
  • Business Continuity/Succession Planning
  • Legal Documentation and Requirements
  • Insurance Analysis
  • Employee Benefits Analysis
  • Executive and/or Key Person Compensation Benefit Arrangement Reviews
  • Personal Financial Planning Services for Owners and Key Employees
  • Financial Planning Workshops for the Business Entity's Staff Employees
In addition, we offer Retirement Plan Services to businesses.  These services include:
 
  • Plan Establishment Consulting
  • Investment Policy Statement Development and/or Review
  • Investment Management
  • Investment Consulting
  • Investment Education Workshops
  • Plan Audits and Plan Administration

Our Wealth Advisory Services for businesses strive not only to provide quality solutions to common business needs, but we also help to implement and seamlessly integrate these solutions into each individual business.  Moreover, after the strategic plan is implemented, we monitor the progress and measure the results.  Ultimately, our mission is to maximize the value of the business by allowing the owners to focus on their core competencies while we focus on ours! 
 

TABLE OF CONTENTS
   
  1. BUSINESS CONSULTING
  2. KEY EMPLOYEE SERVICES
  3. RETIREMENT PLANNING
  4. INVESTMENT MANAGEMENT
  5. EDUCATIONAL SERVICES
 

BUSINESS CONSULTING

 
Legend consults businesses in several different areas.  A Legend advisor may also confer with outside experts or subcontract certain aspects of our service to deliver the highest quality advice to our clients.  Our consulting services include, but are not limited to, the following:


Analysis of Forms of Business Entity:

This service includes an analysis of which form of business entity best fits the business being consulted.  The different forms include:

 
  • Sole Proprietorship
  • General Partnership
  • Limited Partnership
  • C Corporation
  • S Corporation
  • Limited Liability Company

Analysis of Banking Arrangements:

An extensive analysis of loan arrangements, borrowing rates, cash management and service costs for deposit accounts, including checking, escrow accounts and certificates of deposit is conducted.  Also included is the determination whether or not to provide personal guarantees on loans, especially joint and several liability.

 

Legend assists businesses with their commercial financing needs, including lines of credit, term loans, commercial real estate loans, equipment loans and leasing.  Legend seeks out the best financing arrangements among multiple lenders and reviews all loan documents.

 

Board of Directors or Advisory Board Membership:

Legend can provide an advisor to sit on a business entity’s Board of Directors or Advisory Board.  We can add significant value to almost any business, due to our extensive knowledge of issues that affect the operation of a business.

 

Business Continuity/Succession Planning:

Legend advises businesses on continuity issues involving the transition of ownership interests among partners, shareholders and/or next generation owners.  Reviews of buy-sell agreements, funding arrangements and valuation issues, including insurance analysis are conducted.  Furthermore, recommendations and assistance with implementation are provided.

 

Legal Documents and Requirements:

Legend provides a complete review of legal documents, such as articles of incorporation, shareholder agreements, partnership agreements, employment contracts, non-compete and non-solicitation agreements and corporate by-laws.  Board meeting minutes are reviewed to determine if they are in good form, up-to-date and appropriate for the company’s needs.  Should changes need made and/or documents added, Legend arranges and coordinates their creation and implementation.

 

Insurance Analysis:

Legend identifies all areas where insurance coverage is needed, evaluates existing policies for appropriateness of coverages and cost competitiveness, makes recommendations for additional coverages or alternative solutions, if needed, and assists in the selection of the policies.  Legend does not sell insurance of any type, but rather works with an extensive network of insurance providers.  Insurance coverages reviewed include, but are not limited to, the following:

 
  • Commercial Property and Casualty
  • Worker’s Compensation
  • Healthcare Programs
  • Executive Life
  • Split-Dollar Life
  • Key Person Life
  • Group Life
  • Disability
  • Disability Buy-Sell
  • Disability Overhead
  • Group Long-Term Care
  • Employment Practices
  • Professional Liability
  • Officers and Directors Liability

Employee Benefits:

Extensive evaluations are made of all employee benefits.  Each evaluation attempts to achieve cost reductions and/or other improvements.  If suitable, new benefits will be recommended.  Benefits considered include:

 
  • Group Life Insurance
  • Group or Individual Disability Insurance
  • Medical Insurance
  • Dental Insurance
  • Wellness Programs
  • Prescription Drugs
  • Vision Insurance
  • Group Long-Term Care Insurance
  • Pre-tax Dependent Care and Medical Reimbursement Plans (Flexible Spending Accounts)
  • Cafeteria Plans
  • Day Care Assistance
  • Education Assistance
  • Qualified Retirement Plans
  • Legal Aid Plans
  • Employee Stock Purchase Plan

Executive and/or Key Person Compensation Benefit Arrangements:

A review is provided for all executive compensation benefit arrangements.  These arrangements are reviewed for compliance with federal and state laws, appropriateness and cost effectiveness.  Additionally, new benefits are proposed, if suitable.  Legend coordinates the implementation, which includes the following:

 
  • Stock Appreciation Rights
  • Qualified Stock Options
  • Non-Qualified Stock Options
  • Phantom Stock Agreements
  • Non-Qualified Deferred Compensation Agreements
  • Personally-Owned Disability and Life Insurance
  • Split-Dollar and Reverse Split-Dollar Life Insurance
  • Restricted Stock

Business Acquisitions:

Legend assists companies by providing an evaluation of a business acquisition.  This includes financial statement interpretation, valuation analysis and the evaluation of non-compete and purchase agreements, the corresponding purchase price, deal structure, income tax issues and financial liabilities.  Also, Legend assists the buyer in the arrangement of debt financing for an acquisition.

 

Business Divestitures:

Legend assists business owners in preparing for their business entity's divestiture, including improving the profitability of the business, the corresponding sale price and developing a plan to divest the business.  In addition, Legend assists in the selection and coordination of outside expertise.  Legend counsels the client on tax ramifications resulting from the sale and the appropriateness of the purchase price and financing terms.

 

Business Valuation:

Legend provides business valuations for certain types of businesses.  Legend utilizes certified business valuation experts to help conduct the valuation analysis.

Back to Table of Contents

 
 
Legend provides a number of Wealth Advisory Services to business owners and employees who are key to the success of the organization.  These services are provided to key individuals in their entirety or on a selective basis.  When necessary, we will consult with outside experts or subcontract certain aspects of our service to deliver the highest quality advice to our clients.  The services are as follows:
 

Legend develops a personal financial plan for each of the employees that a company designates.  The process begins with each key employee completing an extensive data questionnaire and delivering all relevant financial documents for Legend to analyze.  The areas addressed in the service are as follows:

 
  • Preparation of financial statements, including federal and state income tax projections
  • We can coordinate any tax information with the client's accountant
  • Basic finance issues such as debt structure, liquidity and cash flow issues
  • Development of Investment Strategies, including hedging and tax-sensitive strategies
  • Income tax strategy optimization, including providing alternative financial and legal structures
  • Education funding
  • Retirement planning as well as accumulation and distribution strategization
  • Estate tax reduction analysis and philanthropic decision-making
  • Trust Services through one of the independent partner trust companies with which we have developed strategic alliances, if applicable
  • Survivor needs analysis
  • Risk Management/Asset Protection, including analysis of all insurance coverages
  • Employee benefit analysis as it pertains to the key employee and their family
  • Exercise strategies for stock options, if applicable

 

 

As part of the financial planning process, Legend develops specific recommendations addressing each of the above-listed areas.  During the first part of the process, the key employee will meet with a Legend advisor approximately four to seven times, typically within the first six months of the client relationship.  Each meeting will vary between two and four hours, depending upon the complexity of the key employee’s situation.  Once the recommendations are made, Legend will assist in the implementation of the recommendations where possible.  A few examples include:
 
  • Arranging loans, including mortgages and personal loans with private banking departments of banks and, when necessary, introducing a key employee with commercial loan needs to an appropriate banking officer
  • Providing a banker with the appropriate financial information to arrange or renew a loan for the key employee
  • Sending financial information to attorneys so they can prepare the necessary estate documents, including wills, trusts, powers of attorney, healthcare proxies and living wills
  • Sending income tax information to accountants, such as bonus payments and gain and loss information on the sale of securities, etc., and to make appropriate estimated income tax payments
  • Requesting information on the policy status of life insurance and annuity policies, as well as all other insurance coverage, on behalf of the key employee and their family. (This information includes such items as death benefits, cash values, surrender charges, beneficiaries, tax basis, investment return, etc.)
  • Calculating the tax basis of securities on behalf of key employees and their family
  • Requesting insurance quotes on behalf of key employees and their family

 

 

Our objective is not necessarily to reduce the complexity of the client’s financial situation, because sometimes it does make sense to utilize trusts and other strategies to reduce taxes and achieve family friendly objectives.  Rather, our goal is to save our clients the time and energy that it takes to manage his/her complex situation in order to focus more closely on matters that mean the most to them.  During the first twelve months of service, as well as all ensuing years that Legend is retained, the key employee is entitled to unlimited phone calls, meetings, and advice for their retainer fee.  For the second and all subsequent years, retainer fees will be mutually agreed upon each year by the employer and Legend.
 

Investment Management:

As an employee benefit to key individuals, employers can provide Investment Management Services offered by Legend.  Fees paid by the employer can be negotiated on a group basis, subject to minimums.  The employee can select one or more investment strategies from Legend's Investment Management Service offerings.  See the Investment Management section on this page for further details.

 

Investment Consulting:

An employer can contract with Legend to consult each key individual on a one-time basis or an ongoing basis about their personal investments.  Under this service, Legend does not manage any investments.  The key employee or their designee will make all final decisions relating to the purchase or sale of a particular security.  It will also be the key individual or his designee’s responsibility to implement investment decisions.  This service can be contracted on a group basis, or an allowance can be provided for each key individual.

 

Estate Planning Document Preparation:

If the employer contracts with Legend for its personal financial planning services, key individuals, as a group, can also be provided with estate planning document preparation services.  Legend has negotiated arrangements with various regional law firms on behalf of their clients.  Alternatively, the employer may want to provide individual allowances for each of its employees to take advantage of this arrangement.  Estate documents that could possibly be included in this arrangement are as follows:

 
  • Wills
  • A/B Trust Arrangements
  • Residual Trusts
  • Irrevocable Life Insurance Trusts
  • Revocable (Living) Trusts
  • General Powers of Attorney
  • Healthcare Powers of Attorney
  • Living Wills

 

 

Additionally, more advanced documents can be provided for special fees depending on the individual’s needs.

Back to Table of Contents

 


RETIREMENT PLANNING

 
Legend offers a host of services to businesses concerning retirement plan issues.  A Legend advisor will consult with outside experts or subcontract certain aspects of its service to deliver the highest quality advice to its clients.  The areas include, but are not limited, to the following:
 

Investment Management:

Legend provides Investment Management Services on a No Commission, Fee-Only basis to all types of retirement plans.  These include self-directed type accounts such as 401(k), 403(b), SEP, SIMPLE, defined contribution profit-sharing and money purchase pension plans and pooled asset plans, which can also be 401(k) plans as well as defined benefit plans.  To view Legend's investment capabilities please see the Investment Management Services section of this booklet.

 

Investment Consulting:

Legend consults retirement plans in three primary areas, which are:

 
    • Selecting individual mutual funds and/or the creation of individually-designed investment pools for 401(k) and other self-directed plans
    • Conducting manager searches to replace existing portfolio manager(s) in the retirement plan’s overall allocation
    • Conducting extensive reviews of existing portfolio managers within a retirement plan to determine if their performance is competitive and within the guidelines set by the Investment Policy Statement
 

Investment Policy Statement Review and/or Development:

Legend reviews a retirement plan’s existing Investment Policy Statement for its compliance with the Employment and Retirement Income and Security Act of 1974 (ERISA) and appropriateness given the trustee’s current desires.  If the existing Investment Policy Statement needs rewritten or is non-existent, Legend develops a new Investment Policy Statement that is current with regard to the retirement plan’s investment practices and is also compliant with ERISA.

 

Retirement Plan Investment Education Workshops:

Companies can contract with Legend to provide investment education to their retirement plan participants.  Covered in the workshops is a historical overview of the investment markets, completion of a risk tolerance questionnaire by each participant, a thorough overview of the retirement plan’s investment options and instruction as to how each participant can build an investment portfolio that meets their financial goals.  Under this service, Legend does not provide specific investment advice to plan participants to avoid violation of the U.S. Securities and Exchange Commission and Department of Labor laws.

 

Retirement Plan Establishment Consulting:

Businesses can contract with Legend to combine all facets of establishing a retirement plan for their company.  This service includes determination of what type of plan is most appropriate for the company, selection of an actuarial firm, completion of plan documents, bonding, and selection of investment options and an outside vendor.  If necessary, Legend provides consulting services relating to custodial issues, selection of plan trustees, creation of an Investment Policy Statement and compliance with ERISA.  Furthermore, Legend advisors will conduct on-site meetings to explain the plan to the participants.

 

Administration of Retirement Plans:

Legend can assist businesses in selecting an actuarial firm for retirement plan administration.  This service includes all filings for the plan, the annual report, 5500 tax reporting forms, participant statements, actuarial reports and any retirement plan amendments.

 

Retirement Plan Audits:

Periodically, a company may want its retirement plan to undergo a full-scale audit.  Legend has the capabilities to provide this new service.  Key components of the audit include compliance verification of the plan with the Internal Revenue Service, and the Department of Labor and ERISA laws and rulings.  The audit, which can take one to two weeks to complete, also examines numerous aspects of the performance of each portfolio manager within preset guidelines.  The final audit book contains a complete overview of every facet of the audit and an opinion letter.

 

The audit reviews nine major areas:

 
  1. Documents that define investment management authority
  2. Investment professionals that currently assist with the implementation of investment decisions
  3. Investment Policy Statements
  4. Procedures that were followed in developing the asset allocation strategies used in participant education material
  5. Reviewing Investment Options
    (a) Due diligence procedures that are followed in selecting investment options
    (b) A review of the performance of each investment option
  6. Investment expenses associated with the plan
  7. Procedures for monitoring the investment options and service providers
  8. Overall investment activities for possible conflicts of interest or prohibited transactions
  9. Socially responsive investment objectives

Back to Table of Contents

 

INVESTMENT MANAGEMENT

 

Legend offers personalized Investment Management Services to businesses in regards to their company's retirement planning.  Each type of investment portfolio is managed to achieve both the short- and long-term investment objectives of the plan participants.  

INVESTMENT PROCESS  

Investment Portfolios:

For a description of our investment portfolios, please see our Risk Spectrum chart.

Investment Research:

Legend performs extensive research as to how to structure investment portfolios.  Emphasis is placed on developing portfolios that have historically achieved high returns, but with lower-than-normal risk.  

Sources of Current and Historic Worldwide Financial Market and Economic Data include:
  • Investment newsletters, newspapers, periodicals, research publications, and professional journals
  • Portfolio Managers (Legend interviews in excess of 75 portfolio managers per year)

Client Education:

Education is very important to us.  Legend is dedicated to educating each client about the different investment portfolio types and how they relate to market volatility, time horizons, and investment returns.  It is our goal to ensure that the client understands and agrees with our investment philosophy.  Furthermore, we assist each client in selecting a risk tolerance level with which they are comfortable.  Ultimately, an investment portfolio is designed to meet the client’s objectives.  

PERFORMANCE REPORTS  

Investment Management clients receive quarterly performance reports.  The report details the portfolio performance during the client’s fiscal quarter and provides a comparison against a number of indices.  While providing detailed information, these performance reports are easy to read and understand.    

FEES
 
A separate fee schedule for retirement planning services is available to sponsors of 401(k) plans who use the third party administration services of Iron Corporate Retirement Services, a pension administration firm not affiliated with Legend.

Iron Corporate Retirement Services will assess its own fee schedule.  Legend’s fee schedule for these plans is:

   a. 0.90% of the first $1 million;

   b. 0.65% of the next $2 million;

   c. 0.50% of the next $2 million;

   d. 0.25% of assets over $5 million.

Our fee is for 365 days of service.  However, to get a better idea of what the actual cost will be, it is best to discuss the fee structure in a meeting with one of the firm’s Advisors.

Back to Table of Contents

 


EDUCATIONAL SERVICES

 
Legend provides a number of different financial education workshops to employees of companies.  These workshops vary in length and content. Most can be tailored to the group being addressed.  Legend also offers Financial Planning Newsletters that are available on a quarterly basis.  E-mail newsletters for financial planning as well as investing are available monthly.  The workshops available are as follows:


Retirement Plan Investment Education:

Please refer to Investment Consulting in the Retirement Plan Services section of this booklet.

 

Basic Investing:

This workshop provides an historical overview of the investment markets, completion of a risk tolerance questionnaire by each individual and instruction as to how each individual can build an investment portfolio that meets their financial goals.  Legend does not provide specific investment advice to individuals under this service.

 

Financial Planning:

Legend's financial planning workshop covers most, if not all, of an individual’s financial planning needs. The subject areas covered are as follows:

 
  • Basic finance issues – saving, emergency reserve funds, debt management
  • Insurance – homeowners, automobile, personal umbrella liability, disability, medical, health, long-term care, life insurance
  • Income tax planning
  • Education funding
  • Retirement planning
  • Estate planning
  • Investing
 

Retirement Planning:

This workshop is designed to ensure the financial security of those individuals who desire to plan for retirement.  The workshop addresses the client’s need to accumulate funds for retirement, the tax laws associated with saving for retirement, how much they need, the potential sources of retirement income, the expenses they will incur, the taxation of retirement benefits when they are distributed from retirement plans, pre-59½ and post-70½ distribution penalty taxes and how to avoid them.  Additionally, the workshop covers the need for insurance, such as long-term care and Medicare supplement policies during retirement.  Finally, the workshop addresses investing issues during retirement.

 

Retirement Plan Distribution:

This workshop is designed for individuals who are retired or are within ten years of retirement.  It discusses the rules for distributions from IRAs, Roth IRAs and other retirement plans.  The workshop reviews income taxation, penalties and how to avoid them.  A discussion of IRA rollovers, IRA transfers and Roth IRA conversions, in-service distributions and plan borrowing laws will also be presented.  The workshop will cover beneficiary issues as to how to minimize income taxation to heirs and how to set up heirs for their own retirements.

 

Stock Option Exercise:

This workshop is designed for employees of publicly-traded companies or those in the pre-IPO stage.  Stock options come in two varieties – Non-qualified and Qualified.  Qualified stock options are more commonly know as Incentive Stock Options or ISOs.  The rules differ dramatically for both.  This workshop covers the rules for the type of stock options employees have and the strategies to maximize their value to employees.

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