Recently many friends ask me what exactly I create for my clients through the unique financial planning process mentioned in the scope of service. Therefore I decided to write and publish some classic example of my own clients which I hope it helps to illustrate. Some key data and information are intentionally modified so that their identity and privacy are well protected. I would appreciate all of your feedbacks and comments, and welcome for discussion. Should you have any friends facing the similar situation, please feel free to share, or make a personal introduction. 

Cheers
Gifford

Background Information.

Age: 38

Occupation: Business owner

Human needs: Growth, Significant

Objective: Asset protection from future creditors. 

Real objective: Provide a stable financial certainty to family. Minimise potential liability in case of business downturn. Safeguard asset against creditors.

Concerns: Liquidity. Business Downturn. Liability and personal guarantee. 

Risk: Business debt ($20,000,000) affects family life. No other financial investment or engagement except operating business. 

Resources: $8,000,000 equity value ($28,000,000 asset valuation).  $1,000,000 family income each year.

Real Resources:  $105,000,000 Business turnover. Time. Married status. 

Strategies based on human needs: 

1. As long as the client wants to grow all the time, he will not satisfy & prepare a plan B with his significant traits. Therefore, setting aside of certain amount of capital is necessary for the family well being in a long term. 
2. Zero for the whole strategy since he is not able to deploy a large amount of asset at once. Build the financial ark by small amount of contribution each year, balancing the liquidity and flexibility. 
3. Simple asset separation reduce the correlation between high risk and low risk asset.
4. As he signed personal guarantee with banks for further financing, procedure should be done carefully with professional advice to make sure validity.

Implementation of holistic planning: 

1. While the business is capital intensive and requires liquidity, setting up a subsistence trust is not suitable for this client. Therefore, by making use of the married person status ordinance, he can enhance his protection and safeguard his family asset by purchasing a life or endowment insurance policy with his wife as beneficiary. This could protect the insurance proceed from the creditors just in case. 
2. Yearly contribute around 0.4% of turnover, i.e. $420,000 into annuity policy, for 10 years. At year 11 it generates $350,000 lifetime income to his family, totally tax-free. If he chooses to retain the asset inside the policy, the money is well-protected agains creditors because it’s purpose is for protecting his family. Such tiny amount will not affect liquidity. 
3. Re-arrange potential liability asset like car, and high risk business into separate corporate entity. Personal holds only cash & insurance policies. 

Gain & Benefits after planning:

1. Lifetime passive income creation other than business active income, which creates multiple streams income for his family. 
2. Capital reserve for family in case of insolvency. 
3. Save over $500,000 cost of setting up a trust. 

p.s. I am your plan B. You can always earn a lot if everything is well. The only question is, if something bad happens, who provides you the money? And thats what I stand for.

#assetallocationplanning #businesscontinuity #universallifeinsurance #riskmanagement 

以下是少少資料分享。

2008年9月26日，香港上市公司金至尊珠寶的創辦人林世榮博士在自宅心臟病發去世，享年53歲。股票收市價為1.63港元，市值15.5億。
2008年9月30日，金至尊珠寶集團通告指出，集團現有4.22億元具約束條款的貸款，由於林世榮辭世，將構成有關條款違約的問題。股票收市價為0.65港元。
2008年10月，新鴻基投資服務入稟高院向林世榮遺產代表追討5,000萬元另加利息。
2008年10月，東京三菱銀行入稟高院追討2,400萬元。
2008年10月9日，該4.22億港元貸款遭到終止。
2008年10月14日，金至尊珠寶集團通告指出，因主席離世，集團大部份應收賬款存在收回困難。
2008年10月19日，遭滙豐銀行呈請清盤。
2008年10月22日，菲律賓金融銀行有限公司向林世榮遺產管理人追討502萬元另加利息。
於2008年，林世榮與妻子育有兩女一子，二十三歲的長子偉龍，美國大學畢業，十九歲的長女沛鈿，亦於美國就學，次女沛紋，只有九歲。

當企業東主去世時，失去的不止生命，更有可能是一生的心血結晶，連同家人的幸福，俱付諸東流。
首當其充的是信貸問題，因為銀行向企業提供信貸，是相信在企業主的努力下，業務能得到長足發展。當企業東主逝去，銀行及投資者信心大大動搖，因此終止貸款。
同時發生的有經營問題，因為繼任者或家人未必擁有企業主的經驗，能力，技術或人脈，業務能否創造以往的佳績，甚至能否繼續營運亦成問號。
這就導致資產傳承出現問題，在遭受雙重打擊下，家人所得到的可能不是資產，而是債務。在以上例子中短短一個月內資金缺口超過5億，市值蒸發接近9億(直至現在亦暫停交易)。扣除債務後，家人能否維持原有的生活水平，亦成問號。

無論信貸問題，經營問題或資產傳承，充足並大量的現金是關鍵所在。充足的現金可以償還債務，支持公司渡過損失期，創造充足時間維持營運，物色繼任者，或使繼任者有充足時間得到投資者的信心，更可以使家人得到應有的生活，不必在痛失挈親之餘，失去所有。

重點是，企業為生意發展，一般不會大量囤積現金。那如何用低成本𣊬間創造大量現金？這是每一個企業需要探討的課題。