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What is a ‘personal CFO’? 6 reasons why you need one

By Kelly S. Olson Pedersen,  CFP®, CDFA

Does this sound familiar?

Your taxes have become mind-boggling complicated. You are a business owner or corporate executive whose compensation has grown increasingly complex. Your estate plan desperately needs updating (or creating in the first place), but you don’t know where to start. You’ve experienced a life transition (maybe a divorce, a marriage, the birth of a child or grandchild) and you know your financial plan needs to be updated accordingly, but who has the time?!

Whew! It’s exhausting just to think about it. As you’ve grown more successful, so have your personal financial needs. What you need is someone to pull it all together, who has the depth of experience and insight to connect all the dots so that you can enjoy the peace of mind that your financial house is in order.

What you need is a personal CFO.

A chief financial officer (CFO) within a company is the person who is responsible for managing the overall financial actions of the organization, including tracking cash flow and financial planning, as well as analyzing the company’s financial strengths and weaknesses. Wouldn’t it be nice to have someone with a similar responsibility for your personal and family finances? Of course it would!

Particularly for successful women business owners and executives, the demands of the past year (juggling family responsibilities, work demands, and life in a suddenly virtual world) have made getting a handle on the complexity of their financial situations nearly impossible.

It doesn’t have to be this way.

At CAISSA, we pride ourselves on being a personal CFO for our clients. We take a comprehensive, holistic view of your financial situation and pull it all together, as one area of your financial puzzle inevitably affects another. We take full consideration of all aspects of your finances and provide a complete picture of where you are, as well as a plan to get you where you want to be.

The following are just some of the ways we can act as your personal CFO:

Corporate compensation – If you are a corporate executive, it is critical that your compensation package aligns with a thoughtful tax-planning strategy. Without proper tax planning, your cash planning will suffer. It can result in a domino effect you don’t want. A personal CFO makes sure it all works in a coordinated fashion.

Estate planning – As you build your business or reach a more senior-level position at your company, that typically results in the need for a thorough review of your estate plan. A personal CFO can manage this and bring all the components together. That can include titling and beneficiary designations, making sure the right people are in the right roles (executors, guardians, trustees), and making sure that  revocable trusts have appropriate assets retitled. Also, a thorough estate plan review should include taking a look at annual gifting, such as to a 529 college savings plan (did you know you can frontload five years of annual exclusion gifting into a 529 plan as a way to move assets out of your taxable estate?), making sure that disclaimer provisions are used to avoid one spouse having the entire estate, and potentially “bunching” charitable deductions into one year in order to itemize them or gift them to a charity as a way to bypass required minimum distributions.

Trusts – Once you reach a certain level of wealth and you grow increasingly focused on the legacy you want to leave behind, the creation of trusts becomes important. Beyond a revocable trust, you might want to set up an irrevocable trust, which can enable you to remove taxable assets from your estate, such as through a grantor-retained annuity trust (GRAT). The smart use of trusts can have very favorable tax consequences if implemented properly. Again, a personal CFO can take the lead in helping make that happen.

Tranches of income – Instead of chasing the latest hot stock tip and becoming unnerved by the daily gyrations of the markets, you’ve reached the point in life when you want to take a more long-term, planful approach to investing – an investing approach that is individualized to your specific needs. CAISSA’s tranches of income strategy aligns your investment allocations with your specific anticipated future withdrawal needs. Taking this approach reduces anxiety about getting through the next market dip.

Wealth transfer planning – Beyond the creation of trusts, a personal CFO can help guide a truly comprehensive approach to wealth transfer planning. That can include titling changes like adding payable-on-death (POD) and transfer-on-death (TOD) instructions to accounts to allow for automatic transfer when the time comes, implementing TOD to the deed of a property so that transfer happens immediately upon death, positioning assets to achieve the most efficient step up in basis, and aligning your legacy goals and tax planning with your children’s by utilizing the lowest possible tax brackets.

Life transitions – If you are divorced or widowed, or expect to welcome a new child or grandchild, that likely means a full review of your overall financial plan. A personal CFO can design a go-forward investment strategy, tax strategy and estate planning that takes into account your new life circumstances. Certain life transitions can be very emotional and stressful. A personal CFO listens and works to ensure you have peace of mind regarding your finances now and in the future.


 Discuss your unique situation and how CAISSA can be the personal CFO you need and deserve.