Tax professionals are a must to help the super-rich navigate the tax landscape, and this is an environment that is becoming increasingly complex but also increasingly transparent. Consequently, only the highest caliber professionals should be engaged in such business dealings. The complication is that a large number of “professionals” hold themselves out as tax specialists and are not at all competent. It’s not that these professionals are not well meaning and motivated to do a good job for their exceptionally wealthy clients, it’s just that they’re not up to the job.
According to Angelo Robles, founder and CEO of the Family Office Association, “With the growth in number and the wealth controlled by single-family offices, which is ranging into the trillions of dollars, coupled with their strong interest in legitimately lowering their tax exposures, a large number of supposed experts are lining up to provide advice. While some of them are exceptionally capable, many are not. For those tax professionals who are indeed expert, enormous opportunities are expanding for their services with single-family offices.” And, notes Edward Renn, a leading tax expert and partner at Withers Bergman, “To be effective with ultra-wealthy clients requires not only being erudite and technically able, but tax experts also need to understand the dynamics of the families.”
Even more troublesome are the professionals that cross the ethical line. “The idea of marketing tax evasion as a luxury service using opaque legal entities to hide assets is – besides being reprehensible – usually foolish and likely to lead to enormous problems for the wealthy family or family office. Today, many legitimate legal strategies and financial products can be used to mitigate various taxes,” says John Bowen, founder of AESNation and author of Becoming Seriously Wealthy. “It is essential for the super-rich and family offices to take a proactive approach to not only selecting the tax specialists they work with but to ensure their advice is sound. This often means getting a second opinion.”
For talented, client-centered tax specialists, the world of the super-rich and single-family offices has become a sensational business opportunity. At the same time, these types of potential clients are attracting a large number of professionals that are either well meaning but technically limited, or are just predatory. The result is that astute exceptionally wealthy families and their close advisors are increasingly scrutinizing whom their engage. One way they do this is by getting second opinions.
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