Practice Management

Firm's complex planning strategies aren't for everyone

By Liz Skinner

Jan 5, 2014 @ 12:01 am (Updated 3:07 pm) EST

Jerry VanderLugt is very picky about the clients his firm accepts, and that resolve helps JVL Associates attain maximum efficiency.

Wyoming, Mich.-based JVL serves just 27 families, but most of them have more than $5 million in assets with the firm, which specializes in advanced planning strategies that extend wealth for future generations.

“Our families have more-sophisticated planning needs, and we have found the way to provide for those needs,” Mr. VanderLugt said.

INNOVATOR AWARDS

JVL was the sixth-highest-rated solo practitioner in the 2013 InvestmentNews/Moss Adams Adviser Compensation and Staffing study, and a winner of the InvestmentNews industry innovator awards. The firm scored especially well in operating margin and earnings before owner compensation.

JVL manages about $120 million in client assets. Mr. VanderLugt, 57, is the only adviser, and there are two employees: investment analyst Matt Kunnen and Monica McCracken, an administrative assistant.

The biggest expense at JVL is the salary it pays its employees, said Mr. VanderLugt, who does all the tax planning and other strategic advising for clients.

Mr. Kunnen focuses on the details of implementing the complicated tactics — essentially, what to buy and when, Mr. VanderLugt said.

By limiting the type of clients the firm takes on, Mr. VanderLugt is able to use repeatable processes to meet client needs and keep the cost per client low.

After a 17-year career in accounting, he started JVL in 1994 to serve two wealthy families that asked him to take over their finances.

By 2002, he was helping about eight families and decided that he wanted to advise even more with his wealth strategies.

JVL helps clients transfer wealth among generations in the most tax-efficient manner, usually through trusts that encompass a specific timeframe or extend beyond living generations, Mr. VanderLugt said.

The firm also uses novel family investment companies to transfer wealth.

“We don't have a one-size-fits-all approach, but we have a number of strategies to use that work for them,” Mr. VanderLugt said. “We help clients make use of the money that they have been given.”

Mr. VanderLugt serves as trustee for the trust accounts so he can explain to future generations the goals that their relatives had in mind for how their funds were to be used or distributed, he said.

The firm typically works with multiple generations, including the grandchildren who have money with JVL in trust, Mr. VanderLugt said.

The firm doesn't offer comprehensive financial plans — at least not yet.

One of Mr. VanderLugt's company goals for this year is to bring on a second financial adviser to build out the firm's service offerings.

“Another adviser could expand on some of the basic financial planning things that others may provide,” he said. “It would be a way to grow.”

  @IN Wire

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