Ken Van Leeuwen On Financial Planners Becoming The Family CFO

Ken Van Leeuwen, CFP, CEO, founded Van Leeuwen & Company in 1997 and is responsible for the firm’s overall strategic direction with expertise in areas including stock options, restricted stock planning, and how executives can maximize the benefits they receive from their corporations.

Prince: Tell me about Van Leeuwen & Company, how you view the role of a financial planner and your approach to holistic financial planning.

Van Leeuwen: Van Leeuwen & Company is a boutique wealth management firm located in Princeton, NJ, specializing in executive compensation, investment management, and holistic financial planning, serving high-net-worth individuals, corporate executives, young professionals, retirees and non-profit organizations.

As a financial planner in today’s world, we find ourselves asking if the term “holistic” has become diluted to where it has lost its meaning. A financial planner’s role spans far beyond investments, and one must also work in highly specialized areas such as taxes, benefits, business and estate planning to adopt a holistic approach. 

Holistic financial planning is about being all-encompassing with clients’ goals and maintaining expertise in every area of the financial planning world. This allows a planner to deliver impactful advice across all areas of a family’s life. While all clients could benefit from planning, high net worth families tend to have more complex financial lives, which would require professional advice. They may want to introduce trusts, allow their wealth to skip a generation, or have different needs in terms of active and passive income. Planners must work in all areas for the family.

In working with corporate executives, we equate the role of a financial planner to that of the family Chief Financial Officer (CFO) and each client is the Chief Executive Officer (CEO). Our objective is to consistently provide strong recommendations, which meet their short-, intermediate- and long-terms goals to execute based off the CEO’s response and their financial life vision.

Prince: You mentioned your work with corporate executives—what strategies does your firm leverage to serve this group?

Van Leeuwen: The corporate executive area of clients has so much potential. Often, financial planners look past this group because they typically do not have substantial assets to manage as their wealth is in the future, not the present. We have been successful in this market because we are willing to invest in them for the long-term.

As a fiduciary planner, the real benefit of working with corporate executives is that there are several avenues available to plan financially. At a fundamental level you must know about their 401k plan, if they have an employee stock purchase plan and whether they can utilize it, their belief in the company’s stock and if they get it at a discount. These basic tools allow any participant to build wealth and serve as the starting point in the planning process.

Working with corporate executives who receive equity compensation is a bit more nuanced. The planning strategy may include incentive stock options, non-qualified stock options, restricted stock grants, and how to pay the taxes, performance shares and the use of deferred compensation plans. Corporate executives build wealth when they realize the value of concentration in owning their company’s stock. If the company is strong, this strategy can work to their advantage in achieving their longer-term retirement goals. Think about the “Microsoft Millionaires” in the Seattle area. More than likely these executives worked for great companies, held onto the stock and witnessed their wealth compound.

Advisors must educate clients about the cost and benefits of various planning strategies for their equity compensation. Many strategies have specific tax implications and must be considered carefully. At Van Leeuwen & Company, we run multiple scenarios that paint a clear risk/reward picture. For example, there is considerable risk for a client who has a high concentration of their portfolio in company stock so we must constantly balance risk in conjunction with their overall goals. 

Prince: Does Van Leeuwen & Company offer different levels of planning services for executives and high net worth clients?

Van Leeuwen: Absolutely. Holistic financial planning means recognizing there is no one-size-fits all approach to helping clients achieve their unique personal aspirations and family dreams. As such, they should have options when it comes to identifying the level of service that best meets their needs. Through individualized, goals-based financial planning, we offer an advanced wealth management membership known as the Rembrandt Society™ that presents three tiers tailored to varying financial lifestyles. Each member obtains the same services overseen by me, but tier determination revolves around the client’s needs. Complex scenarios usually warrant a more senior advisor to help them day-to-day.

The Rembrandt Society was designed to be customized for each member. For example, high net worth individuals typically have more complex financial situations, so it likely makes sense to choose the top tier ‘Private’ collection wherein you get access to the most senior advisor with over 30 years of experience. However, the young corporate executive just starting out may benefit from the entry level ‘Gallery’ or intermediate ‘Museum’ collections by working with an associate advisor who will deliver the same Van Leeuwen & Company philosophy but at a lower cost.

Our service levels also benefit the clients for whom we do not manage money. We have never mandated that we manage a client’s assets to work with them, simply because many have deep-rooted relationships with strong asset managers that we do not want to disrupt. As discussed earlier, a planner’s repertoire must exceed money management to be most effective. While managing assets may be easier for the advisor, it is likely not as good for the client.

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