Insights on Legacy Preservation & Wealth Transfer Strategies with Mark Richards

Episode Description:

In this episode, host Elizabeth Ledoux is joined by Mark Richards, Principal of the Winged Keel Group. 

Mark shares his insights on legacy preservation and wealth transfer strategies. He also shares his personal experience with succession planning, including the importance of having an advisory board to hold him accountable. Tap or click the play button below to listen to: Insights on Legacy Preservation & Wealth Transfer Strategies with Mark Richards.

Elizabeth and Mark also discuss how life insurance can play a crucial role in legacy preservation for ultra-affluent individuals and business owners. They also discuss the challenge of selecting a trustee for a multigenerational trust, as it requires identifying someone who can make decisions that align with the grantor’s intent while also maintaining strong relationships with beneficiaries.

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Insights on Legacy Preservation & Wealth Transfer Strategies with Mark Richards Transcript

Mark Richards: Well, there’s, there’s really two, I would say there’s two parts to every legacy. One is the human capital, the wisdom that gets transferred. And the other is the financial capital. We all know what that is, as advisors, our businesses based on the transfer of financial capital, but our sensitivity is very focused on the issues that tend to be the most important, and that is the human capital.

Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at the transition strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everyone, and welcome back to the business transition roadmap. Today, we are, I am so grateful to have MARK RICHARDS with us. You I think you’re gonna have the opportunity to learn so much from his story. And some of the experience that he’s had. He currently is the principal of winged keel group, and he leads the Denver office here in Colorado. What they do is they offer creative wealth transfer strategies for legacy preservation. And it’s pretty wonderful the services that they provide, Marc has an incredible background, he not only is a business owner and has gone through a terrific merger with winged keel, but he also has just over 30 years of background and experience working with ultra high net worth people and business owners, helping them to navigate their future with regard to wealth transfer, and also legacy preservation. So Mark, I’d like to welcome you and just, again, appreciated that you’re here. So can you tell us a little bit about you?

Mark Richards: Thank you. Yeah, unfortunately, it’s a check of 44 years now of experience. And that’s, that’s just probably a, what happens when you’re not employable. The, the career that I’ve ended up in, has really evolved over the years. And it’s been very exciting to be a part of that. And I think that the next decade, which I plan on participating in, is going to actually be the most exciting decade of, of what my career has been thus far. So I’m really looking forward to seeing this all the way through. And what I mean by that is, when I started, it was with a firm by F capital analyst, and I didn’t have an understanding of what I was doing, I left New York, and Wall Street came out to Colorado, and worked through a Plymouth agency to find a position. And this firm was in a nascent area known at the time of financial planning in 1980. Now, that term is trite, but 1980, that terminology is brand new, nobody knew what that meant. And you know, it’s one of those terms, that’s fungible can mean many different things. But it did mean by Shell planning, continuity planning, estate planning, key, you know, key person benefit planning, broad base qualified plans, and, and at the time, 1980 tax shelters, and so it really was a very holistic approach to planning and, and it was working with small businesses, businesses of 20 million or more in revenue, which in 1980, were fairly large businesses. And and then over the ensuing 44 years, that same theme really held true throughout what became the MJ Richards company, and then the Madison group, and now winged keel. So there were three platform migrations, that were all legacy evolutions, and, and those all stayed true to that original theme. However, over the course of that the core competency from the very beginning was in the life insurance era. Yeah, and now it’s an has been for decades, pure life insurance based planning. So when keel is a, it’s the largest independent agency that I’m aware of, in the United States, focused on the ultra affluent as defined by mainly sent to millionaires and billionaires and the needs of that market and business owners, which life insurance is really about. Cash for future delivery. And cash is oftentimes the missing component in a legacy plan.

Elizabeth Ledoux: Right, so yeah, so that, so yeah, your your, your bio definitely has for over 30 years. So definitely need to update that. To go to 44. That’s incredible.

Mark Richards: Incredible part is the plan or another decade or less? That’s the part that I’m and to have that be the part that I’m most excited about. And that’s really, that’s probably pretty unique.

Elizabeth Ledoux: Oh, yeah. Well, and, you know, you know, it’s slated to be the largest wealth transfer time in our world’s history. And so it’s pretty incredible to think about that, and, and through that, the life insurance and some of the work that you do is just crucial, in that, you know, baby boomers getting a little bit older business owners starting to transition at probably a higher rate out of their companies and then doing the planning on, you know, what does that legacy preservation look like? So, when you think about just for our listeners, when you think about legacy preservation, what does that mean, so that they understand that?

Mark Richards: Well, there’s really two, I would say, there’s two parts to every legacy. One is the human capital, the wisdom that gets transfer, and the other is to financial capital. We all know what that is. So as advisors, our business is based on the transfer of financial capital, but our sensitivity is very focused on the issues that tend to be the most important and that is the human capital, preparing errors, transferring values, having good communication and governance, so that future generations have a strong sense of a connection to what came before and a shared mission for what the family is planning on doing in the going forward next generation or generations. So a successful wealth transfer and legacy plan is often referred to as one that perpetuates a family’s common identity and perpetuates family resources for 500 years. So, talking about very, very long timeframes in defining success. And most people have heard that expression of shirt sleeves to shirt sleeves in three generations. What they may not be aware of, is that every culture has a form of that expression. Italian culture is something stables the horse stables, the horse stables, and the Dutch is clogs to clogs, and the Asian is rice paddies to rice paddies. And so, the every generation has observed that the natural atrophy of a family wealth is three generations the creation generation, the preservation generation, and the dissipation generation. And and that cycle can be changed. And the reason I believe the reason that you would try to change that is because it is so devastating to be part of that generation. That is the dissipation generation, the generation that you meet at a cocktail party and says, Yeah, my family used to have well

Elizabeth Ledoux: yeah, we used to have that. And just to put kind of to paint the picture, because I think our listeners know that I think in timelines, and the timeline, many people right now business owners, wealth creators, some of them have companies, some of them have created wealth outside of their business as well. But some of them are, you know, they say that 80% of a normal entrepreneurs, wealth is held inside of their company typically. And so as businesses transition, if you kind of fast forward, if you have a business and you transition, and then potentially you’ve got a liquidity event, you have wealth, invest all of that, in, in my mind that’s creating, in a way a business that is a family business, that then can continue on into the next generation. So even if you’re in a business today, and you’re thinking about leaving, fast forward and start to think about, what, where does this wealth go? What do you want to do with it? And how is it going to benefit future generations? If that’s what you’re choosing to do? Yeah. Yeah, and

Mark Richards: I would add on to what you said, Elizabeth, that, I think it is important to view business, not in the traditional terms of being a manufacturing or service company that has, you know, multigenerational family ownership. Because more and more, especially with ultra low interest rates, and the formation of all these private equity investors, there’s been many long standing multi generational businesses, which have gotten offers that are just too good to turn down. And they’ve seen it as a generational opportunity to monetize the business. So there has been a real in the monetization of businesses, leading to oftentimes, as you point out, these family office kind of configurations, where families with large wealth can have a centralized place to manage some of the complexity to coordinate among the different branches of the family, the the shared planning, like the multigenerational trust, and to hopefully, start to think, like a business, even though it may be like a hedge fund or a private equity fund, instead of the traditional you know, operating business. Right,

Elizabeth Ledoux: right. And that’s a that’s a shift in some people’s thinking, because we do have that traditional vision. And so again, you know, what do you do when you transition? And how does that work? And that’s why I like the overarching thought of actually understanding what your next adventure really looks like, and what do you want to do with it? And how to your relationships fit into that, especially with the family side? Right? So good. So gosh, I am dying to ask you, actually. So you just recently went through the process of taking the firm that you had, and merging it into a larger firm. And I’d like to just ask you, you know, what are some of the highlights of that? If you feel share those. And then what about that really worked for you?

Mark Richards: Thank you. Thank you, Elizabeth. Yeah, it was very interesting for me, because I had been. I had been at the Madison group, the former firm before the merger, proud of the fact that we were a 55 year old firm. But one of the phenomenons that we were experiencing as a 55 year old firm, and in the business of distributing life insurance, was that we were delivering on average $50 million of death benefit a year, for the last seven years before the merge. And, you know, seeing all that money going into family sometimes in some years, it was largely all one policy. Others it was the several policies. Obviously, since 50, knows an average some years are bigger, some are smaller. But what I recognized is that many of those benefits would have never gotten to the outcome they wanted and to the trust or whatever the ownership and beneficiary structure was, if it hadn’t been for the Madison group, having been there all along the way in making the adjustments because they sold the bishop we’re going to continue the insurance. They would call time and had to To mitigate the premium payments, so they had to, or I had a change in how they wanted to structure the insurance and didn’t like being in a fixed income type, investment driver, whatever it was, or they trust changed, or the family, family configuration changed, or, you know, all of these things require, oftentimes, revisiting the original structure, and, and solving for whatever was the need at the time. And if it hadn’t been for that active conversation, and knowing how to loop in the advisory team and get everybody on the same page, and make sure that the, that there was a theme that the resonated with the with the client, a theme of what this was, what this was going to do, what purpose it was going to serve, many of those benefits would have never been delivered. So as we got to where we, you know, as I was a sole owner, the Madison group after our first succession. So you know, succession for me was being the sole owner of the empty Richards company, then being a shareholder in a management group and being the sole owner of the Madison group, and now being principal who in Kiel group. And so I’ve seen, you know, personally this this succession. And when I record, I also had an advisory board, which we call the wisdom Council, and the wisdom council met quarterly, and we report it to them. And it was helpful for me, because as a sole owner, I want an accountability. And so by reporting to this very wise group before a quarterly basis, I was always nervous about those, and I wanted to make sure the information was in good shape. And that would be my chance to check on where we were what our progress was. And in one of those meetings, they, they said, Mark, we would like you to come up with a plan B. Plan, which was a succession plan. And it was going actually quite well. But their concern was that we could run out of time. And so I was fortunate to have a firm that we had worked with for 20 years Wingfield group in a joint venture basis in one of their specialty areas known as private placement, life insurance, which was a very unique area of life insurance. And they were the undisputed experts in that area. So whenever we had that need for a client, we would team up with wink heel and joint venture on the work. So we’d had that experience of working together, we knew each other, we had built trust with that relationship. And so when they asked for the plan B, I knew who to go to. And I went right to them and, and as fortune would have it, we sat down. And at that time, wink keel was already on a path towards expanding from our New York centered office into Boston, and Richmond, and Dallas, and Houston, and San Francisco. And, and so when we’re having dinner, I said, you know, have you ever thought that you need something in the middle of the country? And the principal, the managing partner said, Absolutely, that’s what I was hoping dinner would be about. So being an attractive market made that pretty attractive to wink, teal. And, and I know that that I think will continue, I think the vision of the Winkfield group is to become the first independent open architecture. National firm distributing life insurance and annuities to the the ultra affluent, let’s just buy it. But by the way, a term I don’t really like very much to point across, but the really the folks that we work with, I think the better way of saying, you know, no more worry is where families have assets in excess of their needs and watch.

Elizabeth Ledoux: Yeah. Which is great. That’s great. I like that definition a lot better. Because a lot of people now have that opportunity. So and they wouldn’t label themselves as ultra high net works either. Right? But they have that ability. Right, right. Damn. Well, that’s a great story. So as you just to share with our audience is you traveled through all of the succession opportunities, right in transition opportunities. If you look back what might be one or two things that you look back and go wow, that did not work. very well that you wouldn’t want to do that, again, anything that pops to mind.

Mark Richards: Yeah, I think both the Winkfield group and myself at the Madison group, I would say having a partner that did not have same, you were spending as much time with internal disputes as you were focusing on the firm, is something that I would really avoid at all, I’d be very conscious of that, and very careful, and would recommend anybody being about their partners you have, because it’s just like, your friends, they’re either lifting you up and making you better, or they are taking you down and distracting you from you know, your, your most, your better self and your and your most productive self. So I think that, you know, having having the wrong partners, is one of the huge risks in that. And that could be for a life partner in a marriage, or for a business partner. And you probably deal with that a lot, Elizabeth, where that’s, you know, one of the hang ups in the succession planning, is a partner who is contentious and doesn’t have a shared vision and is an obstacle to what you see as, as a consultant as being, you know, what would be best for the business and the stakeholders? Yeah, absolutely.

Elizabeth Ledoux: In an in an in our transition compass, we have the the big six, you know, the why the who the what the when the how, and the how much. Those are the big six questions that don’t have to be answered in the beginning. But they do need to be or will be answered in the end, at the time of transition. And I would, in my career, the one that people struggle most with is who that’s, you know, who do we bring in? How do we know they’re going to be a great successor? How do we know they’re going to make it? How do we know that they’re going to be the right one, that they’re going to make it that they’re going to lead? Well, that, you know, it’s going to be good for them and good for the business. So we, the who is really interesting, and lots of heartache sometimes over that, especially if you’re a have to include an exclude people. And the other one, the shared vision, you know, we see this all the time where people will start a company together, they’re both focused on the same thing. So we’ll have a party of two, right to two partners, they’re focused on the same thing, they’re building, growing, building, growing. And even if they’re the same age, they might be at a different place in life, have, you know, different aged kids or have different circumstances, of course, that go on. And what happens is what their one focus was, even if they were shared in the beginning, that vision and then those values, at some point in time, sometimes they separate, because they have different things that they want to do in their lives after the business. And that can be quite challenging as well. So who you’re dealing with, I think is so important. So thank you for sharing that.

Mark Richards: We, you know, you mentioned a great with driving a very large demographic bulk, right of baby. That, that is if you look at the Mac, macro picture, every organization part of every volunteer position, every every affiliated firm that we work with, pretty much everybody is going through a transition at the same time, because of that large demographic shift.

Elizabeth Ledoux: You very interesting observation on that gather. And the thing is, is it creates a lot of opportunity for people who are entrepreneurial, are willing to take a risk. And it’s hard to find those people. So, by the way, if you’re listening and you’re one of them, take a look and see if you can find a business or somebody that you might want to trust and go talk to because there are definitely opportunities out there and finding the who is really not the easiest thing to do. So

Mark Richards: yeah, you know, estate planning is often viewed as complex. We’ve done it for so long that you know doesn’t have the complexity to us anymore. But the to the One who’s entering and about all the different tax. It can be, they get through all that where they get stuck is who’s going to be the trustee. That becomes the most difficult decision in the transferring of wealth is, who do I trust? To make the right family and with my wealth, that will honor the intent that I had. And that, just as the name implies, it’s a very sacred fiduciary response. That oftentimes, to identify and you think about it, somebody who’s been out there with big networks throughout a lifetime of achievement, and has a difficult time identifying one person who they can trust to do the right thing.

Elizabeth Ledoux: Yeah, yeah, and in many cases, done it, I don’t think in all cases, but in many cases, trustees are required, right, in order to create some of the tax opportunities that get passed on to the generations, because without the trustee, that doesn’t work. 

Mark Richards: So you own it. And if you can’t own it, then that means that usually an irrevocable trust the owner, and that irrevocable trust is going to have a manager which is a trustee. And so it can’t be you, that can’t be your spouse, typically, you are going to have it be it mean, it probably don’t want it to be one of the beneficiaries. So now you’re, you know, you’ve taken no close with people and disqualify them. And now at Institut OLS. And, and so it’s just to your point, it’s always a real challenge. The more you can have strong relationships in your life. And the more you can have your story be known. So we do something called a financial family financial philosophy statement, where we capture the narrative of the individual, and how that wealth was created. And that that narrative, which is how we go into the world, right with our identity, is in a story in a form of story, we all have our story. And if you capture that story, it’s so much. In a multigenerational trust situation, there are going to be beneficiaries who never meet the grantor, the creator of that trust. So having that story documented, is really helpful in both informing the trustee as to what the individual might want. Find the beneficiaries of what the intent was, and connecting them to the source of the good fortune.

Elizabeth Ledoux: Yeah. And that’s a great point. Great point. So. So I always, we’re just about in our time, Mark, and it goes so fast. This has been such a great conversation. And I always like to ask just kind of one final question and have one last little conversation about what one thing would you like to leave with our listeners about business transition or wealth transition that you think would be most beneficial to them?

Mark Richards: I just finished reading David Brooks book, How to know a person. And at one point in the book, he talks about his view on what makes a great marriage. And he says that a great marriage is one where both partners do for the other without any expectation of return for themselves. And I think that that is also what makes a great partnership in business, whether your true partners and shared ownership or just playing different roles in the business. And I think that as hard as that might be for some people, I think if you are doing what you feel is right, and you’re doing it for pure reasons that you’re going to have good outcomes. And maybe more importantly, you’re going to preserve the integrity to become successful, even if not in that current configuration.

Elizabeth Ledoux: Right. Well, that’s incredible. Yeah. So great reference to that book. And I think it’s difficult at times to do things for others without any expectation of return, that can be a practice that probably most if not all of us can pay attention to and see if we can work that into our lives at an even higher level than we’re already doing that. Because, yeah, I think wanting something for someone else instead of yourself in a business transition really helps to give a gift to them, of allowing them to be themselves and to do what they need to to be whole. And that’s, I think putting people first is so important.

Mark Richards: Yeah, I think, you know, George Washington, set that example when he chose not to be a king, and not to run for a second term. And that was a gift to our country and an example for all others to, you know, learn from. And I think that I think that with that kind of a legacy we can didn’t turn out too bad for George Washington, at least in a historic context, context.

Elizabeth Ledoux: That’s right. That’s right. Well, Mark, we’re at our time. So thank you, again, for joining us today. And just some wonderful nuggets of knowledge that I hope our listeners will take to heart as they listen and yeah, just appreciate you. So thank you.

Mark Richards: Thank you, Elizabeth, a fan. Appreciate you have a good rest of the day.

Elizabeth Ledoux: I will I will. And if anybody wants to get in touch with Mark, his information is going to be following this podcast. He he is a person that if you have questions and things like that you can trust him to reach out and he will definitely give you what he has, with no expectations. So yeah, thanks, Mark. Take care. Thank you for listening to this episode of the business transition roadmap. If you’re listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy. I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business, head over to To schedule a call. Thank you again for listening, and I’ll see you on the next episode of the business transition roadmap.

The Business Transition Roadmap with Elizabeth Ledoux

How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.

If you’ve enjoyed this podcast, you can check out other episodes here: Podcasts – The Transition Strategists
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