Financial Planning for Strategy

In many markets banks represent 30-60% of life insurance sales and banca fees can be 20-30% of total bank fee income. Given the materiality and long-term tenor the structuring of bancassurance agreements is an important factor for success. Which gets us to access fees. Philosophically an insurer pays for access to the bank’s customer base because the customer relationship with that bank should make selling easier. In other words, the marginal acquisition cost per customer should be lower than non-captive channels. This notion has been compromised over time as clever sell-side advisors and competitive pressure to get in the game have pushed up access fee levels to sometimes extraordinary levels. This creates two issues: 1)       Risk of misalignment. Take ACB Vietnam for example. Each year the bank recognises VND 560b in the P&L as access fee amortisation. So if sales drop like they did in recent years the bank’s revenues are relatively protected meaning they have less skin in the game to fix the situation 2)       Customer ends up paying the price. In this example the compensation to the bank consistently exceeds first year premium. Given insurers are not charities it is likely this will translate into lower value for the customer   DBS CEO Piyush Gupta recently went on record saying they did not go for the highest access fee and that he wants their partnership to be win-win. That can be practically translated into the following for new deals / renewals: 1)       Replacement (or lowering) of access fees with richer earn-out structures. In this way the bank is incentivised to make the partnership work as they would get a (larger) proportion of the value as it arises rather than extract it statically up-front. 2)       Bank’s compensation aligned with value-add of the products. One way to do this is to apply a recognition factor by type of product that broadly correlates with VNB margin. So SP endowments would get a haircut whereas protection sales would get a multiplier. The best partnerships already incorporate these elements. It is incumbent on advisors to advise banks on long-term alignment and maximising overall value rather than just focus on pumping up access fees with the risk of disruption and conflicts down the road. But ultimately bank management needs to be fair to their insurance partners in the way that Piyush articulates. Bancassurance partnerships are long-term relationships, not transactional procurement contracts. Setting them up appropriately will drive more value and also ensure customers are getting a fair deal.

How Private Placement Life Insurance (PPLI) lets the ultra-wealthy shift control of millions without selling, wiring, or triggering taxes and who’s enabling it behind the scenes. Most people think of life insurance as something you buy to protect your family. The ultra-wealthy, however, use a special form of it to protect their wealth. It’s called Private Placement Life Insurance (PPLI) and it’s one of the most powerful, discreet wealth structuring tools in existence. What Is PPLI? PPLI is a customized life insurance policy where the cash value is invested in assets like: • Equities • Hedge funds • Private equity • Real estate • Credit strategies These assets are held inside the policy, giving the owner tax deferral, asset protection, and the ability to shift control with a simple legal signature. Why Use PPLI 1. Tax Deferral: Gains compound inside the policy tax-free 2. Asset Protection: Creditors can’t access assets held in the policy 3. Privacy: Assets are owned by the policy, not the individual 4. Succession Planning: Control is passed on via beneficiary forms — no probate 5. Cross-Border Efficiency: Simplifies global estate planning and avoids inheritance delays How It Works 1. Structure: The client sets up a PPLI policy in an offshore jurisdiction like Bermuda, Luxembourg, or Singapore. 2. Fund: They transfer eligible assets (e.g., $20M of tech stocks) into the policy. 3. Control: The insurance company legally owns the assets, but the client controls investment decisions via a managed account. 4. Transfer: When the time comes, the policyholder assigns the policy or changes beneficiaries—no sale, no wire, no tax trigger. Who Offers This? Top PPLI Insurance Providers: • Lombard International Assurance • Crown Global Insurance (Bermuda) • Swiss Life Global Solutions • Sun Life Financial International • Transamerica Life (Bermuda) • Valorlife / Zurich International Life Private Banks That Facilitate PPLI: • UBS Global Wealth Management • Citi Private Bank • HSBC Private Banking • J.P. Morgan Private Bank • Julius Baer • BNP Paribas Wealth • Pictet They often act as: • Investment manager of the policy assets • Custodian of the investment accounts • Strategic advisor on the wrapper structure A Southeast Asian family office wraps $30M of global stocks into a PPLI held in Singapore. When the founder retires, they change the policy beneficiary to their children’s trust. The assets never leave the structure. No capital gains triggered. Control shifts with a single form. Private Placement Life Insurance - Not just to protect money, but to move it legally, quietly, and globally. #PPLI #WealthStructuring #PrivateBanking #FamilyOffice #TaxPlanning #OffshoreFinance #UHNW #EstatePlanning #AssetProtection #GlobalWealth

Let me tell you a story that might resonate with many of us, especially if you're part of a business family or an ultra-high-net-worth individual (UHNWI). There’s a successful family business, let’s call the patriarch Mr. Edward (not the real name), who had built an empire from the ground up—real estate, manufacturing, investments—you name it. But like many business owners, his estate plan hadn’t kept pace with his growing wealth. He had a will, a trust, and a basic succession plan, but it was clear something was missing: liquidity. When Mr. Edward passed on, his family faced hefty estate taxes, probate issues, and business ownership complexities. His assets were tied up, and there was no immediate cash to cover taxes or provide a cushion for his family. But, thanks to the smart decision to include life insurance in his estate plan, his family had immediate access to tax-free cash to handle these challenges without selling off assets or scrambling for liquidity. Life insurance was the bridge that protected their wealth and kept the business intact. Here’s why life insurance is such a powerful estate planning tool: ✅ Immediate liquidity: While your assets may be tied up in businesses or properties, life insurance provides a fast, tax-free payout that ensures your family can cover taxes, debts, and other costs without rushing to sell assets. ✅ Minimize estate taxes: In many cases, life insurance proceeds can help offset hefty estate taxes, so your loved ones aren’t forced to sell off the family business or key assets just to cover the bill. ✅ Equalizing inheritance: If you’re passing on a business to one child but want to leave equal value to another who’s not involved, life insurance can provide the balance without dividing the company. ✅ Bypass probate: Life insurance policies can transfer directly to your beneficiaries, avoiding the lengthy and expensive probate process, and giving your loved ones quicker access to funds. Estate planning isn’t just about writing a will—it's about ensuring that your legacy is protected for the next generation. Life insurance can play a crucial role in making that happen. Let’s talk about how you can integrate life insurance into your estate plan for smoother wealth transfer and to protect the future of your family. These and many more were discussed at our last Genea FO Webinar Series. Get in touch if you'd like to get access to the replay. Let’s engage to discuss how we can set this up for your family. #EstatePlanning #WealthTransfer #FamilyBusiness #LifeInsurance #FamilyOffice

𝐂𝐚𝐬𝐞 𝐒𝐭𝐮𝐝𝐲: 𝐂𝐨𝐨𝐫𝐝𝐢𝐧𝐚𝐭𝐢𝐧𝐠 𝐚𝐧 $18𝐌 𝐄𝐬𝐭𝐚𝐭𝐞 𝐅𝐫𝐞𝐞𝐳𝐞 𝐰𝐢𝐭𝐡 𝐚 𝐖𝐚𝐬𝐭𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐚𝐧𝐝 𝐋𝐢𝐟𝐞 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞👇🏽 We recently worked with a client in their early 60s who had just completed an estate freeze - the result: they held $18 million in preferred shares in their holding company. The freeze was a crucial part of their estate planning. However, without further planning, the frozen value would trigger a significant tax liability at death, and the preferred shares would pass to the estate - with minimal tax sheltering. That’s where our team stepped in - collaborating with the client’s accountant to design a post-freeze strategy that aligned with the client’s long-term needs. Our Approach ✅ 1. Wasting Freeze Strategy We began by creating a comprehensive retirement income plan. Using actual spending data, portfolio projections, and corporate cash flow, we gave the accountant precise withdrawal targets to implement a wasting freeze. This allowed the client to slowly redeem their preferred shares during their lifetime, reducing: • Future tax liabilities • Probate exposure • Complexity for the estate This also ensured that corporate distributions could be managed tax efficiently, aligned with the client’s marginal tax brackets. ✅ 2. Life Insurance to Cover Remaining Tax Even with an efficient wasting strategy, a large portion of the preferred shares would remain at death, resulting in a deemed disposition under ITA 70(5). We modeled the expected tax liability on death and helped the client implement a corporate-owned permanent life insurance policy to: • Fund the tax bill using CDA credits • Preserve the operating capital and legacy for heirs • Avoid forced liquidation of other assets Why It Worked ✔️ The retirement plan grounded the strategy in real data, not assumptions ✔️ The wasting freeze was structured collaboratively with the tax team ✔️ The life insurance policy ensured liquidity without disruption Final Thought An estate freeze is a great starting point - but not the finish line. Without a coordinated plan, it can leave the estate vulnerable to liquidity issues and unnecessary tax. 📢 When accountants, insurance advisors, and financial planners work together it leads to better outcomes for our clients. #LifeInsurance #TaxPlanning #BusinessSuccession #WealthPreservation #CDA #Collaboration #CorporatePlanning #EstateLiquidity #PrivateCorporations #cpa #cpacanada #cpaontario #cpabc #cpaalberta

Ten years after the liberalization of the insurance sector in the Democratic Republic of Congo (DRC), the strategic interplay between insurance and banking continues to shape the national economy. Yet the full potential of this synergy remains largely untapped. In the life insurance segment, collaboration between insurers and banks is often limited to credit insurance, which covers outstanding loan balances in the event of a client’s death or disability. Beyond this, many promising avenues remain unexplored, at the expense of both individual and corporate clients operating in DRC. One such opportunity lies in the collateralization of final settlements, which could be outsourced to a life insurance company. Why consider this approach? Under IFRS 17, companies are now required to provision for final settlements annually. When handled internally, these provisions trigger significant tax liabilities in the DRC. However, when entrusted to a life insurer, no such tax burden applies, as insurance premiums are exempt from taxation. This solution offers several strategic advantages: • Robust and compliant valuation of final settlements • Tax efficiency for the company • Capital optimization, with the insurer acting solely as a fund manager. The following note explores this solution in depth and calls on insurers and bankers to combine their expertise with creativity to better serve their clients and support sustainable business growth.

There’s still 1 problem with mutual funds. Let me explain. Say you start a SIP of ₹10,000 for your daughter’s higher education. In 10 years, it should grow to about ₹20 lakh. Sounds perfect, right? But here’s the problem → What if something happens to you in the middle? And you’re the only earning member? The SIP corpus will stop midway. And your daughter’s goal could be left incomplete. This is the risk most investors don’t account for. So what’s the solution? 👉 Term insurance laddering. Here’s how it works: →Take 10 small term policies of ₹2 lakh each (covering your ₹20 lakh target). →Every year that passes, close one policy. →Lets say if something happens to you In year 7 → your SIP corpus is ~₹12–14 lakh + 3 active policies pay ~₹6 lakh. Even if you aren’t around, your daughter’s education is still fully funded. The beauty? You can apply this laddering strategy for any goal. Because financial planning isn’t just about creating wealth. It’s about protecting the journey too. ♻️ Repost to spread this term+sip strategy! Gaurav mundhra

I’m working with a couple right now—she’s 78, he’s 76 and disabled. For 20 years, they’ve carried a term life insurance policy. That policy expires next year. Here was their concern: “We’ve paid into this for two decades. We’re on a fixed income. But we still want to leave a legacy for our three children. Once this ends, it feels like all of that money disappears.” → This isn’t a post about term insurance being bad and permanent being good. It’s about what people really want from life insurance in the first place. They don’t buy it because they might die. They buy it because they will die. And when that day comes, they want certainty—a benefit that goes to the people they love. → Here’s where planning matters. As we talked, it was clear they had raised three successful children—something they’re incredibly proud of. But their fixed income made a permanent policy unrealistic. Forcing that would have strained their lifestyle and jeopardized the very security they’ve worked for. So instead of pushing a product, I asked a different question: What if your children helped pay for the policy, and in your estate documents, you left the death benefit split evenly three ways? Now the cost of the policy is off their shoulders. The children see it as an investment in their own inheritance. And the couple can enjoy the peace of knowing their legacy is secured—without sacrificing their day-to-day living. → That’s what real financial planning looks like. Not “which product is better,” but how do we get creative to align money with what matters most? This isn’t to say that permanent insurance is always the answer. But my clients—and the people we aim to serve—can appreciate in some form the desire for legacy, no matter how it comes.

Life insurance isn't just about meeting basic needs. It's about aligning with your clients' true goals. 🎯 Shift the dialogue from needs to wants: 📚 Education Goals: Talk about how life insurance can support not only essential educational costs but also broader aspirations like specific universities or international programs, all without financial strain. 🏡 Lifestyle Stability: Help clients understand that life insurance is a tool for maintaining their family's current lifestyle, covering everything from regular home upkeep to cherished family trips. 🌟 Fulfilling Dreams: Discuss the role of life insurance in enabling family dreams, such as starting a business or buying a dream home, making it part of their legacy rather than just a safety net. 🛡️ Peace of Mind: Highlight that a solid life insurance plan provides more than just money; it offers the comfort of knowing their family can continue to explore opportunities, even if they’re not around. Encourage conversations that focus on what your clients genuinely want for their family’s future, helping them see life insurance in a new light. It’s not about fear; it’s about possibilities!

As a former insurance practitioner, I know that developing a strategy to tap into the insurance business from banks requires a comprehensive approach that considers the unique dynamics of the banking and insurance industries. There are several components to consider when formulating a banca strategy. • Understand the market by conducting a thorough analysis of the banking and insurance markets. Identify potential synergies and opportunities where insurance products can complement banking services. By understanding the needs and preferences of both the banks and their customers, you can tailor your approach to align with their requirements. • Develop insurance products that align with the needs of bank customers. This may include life insurance, health insurance, property insurance, or investment-linked products. Customizing products to fit the bank's customer demographics and existing product offerings can enhance the appeal of your insurance products. •. Forge strategic partnerships with banks to distribute your insurance products. This may involve creating exclusive partnerships or establishing referral agreements with banks, allowing them to offer your insurance products to their customer base. • Provide comprehensive training and education to bank staff about your insurance products. This ensures that they are equipped to effectively promote and sell insurance products alongside banking services. Additionally, providing sales incentives for bank staff can motivate them to actively promote insurance offerings. • Ensure that the process of selling insurance through banks is seamlessly integrated into the existing banking operations. This includes integrating insurance sales processes into the bank's customer relationship management systems and ensuring a smooth customer experience during the purchase and claims process. Several critical success factors can significantly impact the success of the strategy: - Tailored Product Offerings - Solid Partnerships - Training and Support - Regulatory Compliance - Customer Experience While developing a strategy to tap into the insurance business from banks, it's important to be aware of potential challenges and risks that may arise: - Resistance from Bank Staff - Regulatory Hurdles - Integration Issues - Competitive Landscape - Customer Trust: m By addressing these potential challenges and risks proactively and developing a strategy that focuses on critical success factors, one can increase the likelihood of successfully tapping into the insurance business from banks and creating mutually beneficial partnerships. https://lnkd.in/ghtpuuYb

Unlocking Financial Potential: Why Savvy Business Owners Choose COLI and BOLI Are you a high net worth business owner looking to optimize your company's financial strategy? It's time to explore Corporate Owned Life Insurance (COLI) and Bank Owned Life Insurance (BOLI). Here's why these powerful tools are becoming essential components in sophisticated financial portfolios: 🏦 What are COLI and BOLI? COLI and BOLI are powerful life insurance policies purchased by corporations or banks on the lives of key employees. The company is both the owner and beneficiary of these policies. These policies are key assets in their portfolio and provide significant value to them in securing talent, retaining exceptional employees and growing their assets. 💼 Key Benefits for Business Owners: 1. Tax-Deferred Growth: Cash value grows tax-deferred, potentially providing significant long-term returns. 2. Tax-Free Death Benefit: When a key employee passes away, the company receives a tax-free death benefit. 3. Improved Financial Metrics: These policies can enhance the company's financial statements and ratios. 4. Executive Retention: Can be used as part of a comprehensive benefits package for key employees. 5. Funding for Buy-Sell Agreements: Provides liquidity for ownership transitions. 6. Creditor Protection: In many jurisdictions, the cash value may be protected from creditors. 🚀 Why High Net Worth Business Owners Are Buying In: 1. Diversification: Adds a stable, low-volatility asset to the company's portfolio. 2. Long-Term Planning: Aligns with long-term business continuity and succession strategies. 3. Wealth Transfer: Can be an efficient tool for transferring wealth to the next generation. 4. Key Person Protection: Mitigates the financial impact of losing crucial team members. 💡 Pro Tip: Consider combining COLI/BOLI with split-dollar arrangements to create win-win scenarios for both the company and key employees. Ready to elevate your business's financial strategy? Consult with qualified financial, legal, and tax advisors to see how COLI or BOLI might fit into your overall business plan. #BusinessStrategy #WealthManagement #FinancialPlanning #ExecutiveBenefits