Frank Seneco is founder and president of Seneco & Associates Inc., an advanced life insurance boutique in New Haven, Connecticut, catering to the exceptionally wealthy. Seneco has been providing sophisticated life insurance solutions to the very wealthy for over 30 years.
Prince: How would you describe Seneco & Associates?
Seneco: Seneco & Associates is a boutique wealth planning firm specializing in life insurance. To be very clear, what we do very well and how we’re compensated is by providing sophisticated life insurance solutions to the wealthy and very wealthy incuding the super-rich. We’re able to help implement intricate wealth planning strategies and source the best life insurance policies that support these strategies. Our clients are both US domestic and international. For international clients, we have our offshore consulting firm Seneco Global Advisors, Ltd.
Prince: You built a reputation for providing life insurance solutions to the ultra-wealthy and in many cases those solutions help them mitigate taxes. Can you explain what this means?
Seneco: Life insurance has certain tax benefits that are codified in the tax code of US and foreign countries. We’re regularly able, working with other professionals, to provide sophisticated life insurance solutions to the very wealthy that enable them to lower or, in some cases, eliminate certain taxes.
One example of this is private placement life insurance…commonly referred to as PPLI. First of all, PPLI is life insurance where the wealthy client can elect the investment professionals to manage the monies in the policy as opposed to the investment options offered by the insurance company. It’s not a tax dodge or a fancy way to evade taxes. PPLI is not right for everyone. In fact, for some clients, we have found that traditional life insurance was a better answer to help them build wealth while mitigating taxes.
That said, for many wealthy families and single-family offices, PPLI is proving to be a very effective way to address some wealth planning concerns and substantially grow their wealth by eliminating the taxes on the gains of the policy’s investment portfolio. By being able to select the investment professionals to manage the monies accumulating in the policy, clients have been able to get significantly superior returns than what they would have been able to get relying on the investment choices in traditional life insurance policies. By structuring the PPLI policy in a certain way, all gains on the investment portfolio are never taxed. One more thing, the cost of PPLI is significantly lower than traditional life insurance.
The compilation with all wealth planning and advanced life insurance solutions is making sure they’re the best choice for wealthy clients and that they’re implemented well. A growing problem with PPLI is providers who are pushing the envelope or out and out breaking the rules. For example, the wealthy PPLI client cannot determine the particular investments in the policy. That’s the job of their chosen investment advisors such as their single-family office. But, some of the wealthy and their providers are ignoring this requirement and will likely eventually suffer for it. Therefore, the wealthy have to be diligent when deciding on who to work with.
Prince: Let’s turn to how you connect with wealthy clients. Please explain your business model.
Seneco: Let me start with the way the firm is structured. Our business is life insurance. On my team are experts in life insurance products and life insurance portfolio design. While we’re not practicing lawyers or accountants, we have professionals in house who can assist in developing and implementing sophisticated estate plans, asset protection plans and wealth enhancement solutions. To fill in any technical limitations, we have close relationships with leading tax authorities—some nationally and internationally recognized private client lawyers, some award-winning tax accountants and a couple of industry-recognized actuaries—who are available to us whenever we need their expertise.
Now, let me explain how we connect with the wealthy. While we’re responsible and accountable for the life insurance solutions, and while we have a very intricate relationship management system and approach to work with the wealthy, our wealthy clients are introduced to us by other professionals. Our entire approach to business development is to be the very best life insurance resource for other advisors.
Our ability to coordinate seamlessly with other professionals, to adapt to the way they work with their wealthy clients, to exceed their expectations, has made us the go-to life insurance provider for a number of multi-family offices, wealth managers, bankers, accountants and lawyers. These professionals are our advocates with the wealthy bringing us in to address the life insurance needs of their best clients. Then it’s our responsibility to find the optimal life insurance solution. Many times, there are a number of possibilities, and we spend a lot of time reviewing the options with the professional who knows the wealthy client and client situation best. Based on his or her understanding and insights, certain options are selected and presented.
For a complimentary PDF copy of Elite Wealth Planning: Lessons from the Super Rich request the book from firstname.lastname@example.org