Summer 2016 Newsletter
This year marks our 40th anniversary of providing trusted wealth management services to successful businesses and super affluent families, helping them to successfully build, protect and steward their wealth.
“We’ve worked hard to make this company a success,” shares Mike Kiley, Founder and CEO. “I couldn’t be prouder of this team, the business we’ve built, and our solid strategy for future growth.”
From the beginning, it’s been essential to us to stand on the fundamental values of integrity, trust, and stewardship, while serving our clients with excellence. Understanding our clients’ needs and crafting sophisticated, custom-tailored insurance and investment strategies has become our hallmark. We’re honored that over 90% of our clients come from referrals.
Over the years, we’ve focused our expertise on two key areas: the unique interplay between insurance and investments, and creating value for generations. When Mike had children, it changed his life, and affected how he viewed his business. “It became my top priority to create a lasting legacy for my family. It brings my wife Dana and I tremendous satisfaction to help others do the same.” Mike and Dana Kiley, both Principals at the firm, have 5 children.
Chamberlain Group has come a long way in 40 years. Recently voted one of the 100 Best Places to Work in Orange County, we are actively involved in the local community with Wheatstone Academy, of which Mike is the Founder, Make a Wish Foundation, America on Track, and A Better LA. “The depth of experience, talent, and passion of this team is remarkable. Our future is bright,” says Mike.
“We enjoy what we do, and we’ve been blessed with success. Bring on the next 40 years!”
For Mike’s personal commentary on the 40th Anniversary, click here.
For the 40th Anniversary Press Release, click here.
We’re pleased to announce that Jim McCaffrey has joined Chamberlain Group as Chief Operating Officer. Mike Kiley, Founder & CEO shares, “We searched far and wide for the right person to help take us to the next level. I’m excited about Jim’s depth of experience, his strategic mind, and his passion for excellence.”
Jim serves the firm with more than three decades of industry experience at NestWise, Sand Hill Advisors, Charles Schwab and several top Fortune 1000 companies. Taking a collaborative approach, Jim has consistently built and supported high-performing management teams within sophisticated financial service organizations.
As Chief Operating Officer, Jim champions the present and future of Chamberlain Group, including its organizational development, operations and management, and growth strategies. Among Jim’s executive oversight are critical functions such as workflow management, leadership development, technological advancement, compliance and risk management, financial oversight, marketing strategy, and human resources. In these areas, he is extremely effective at translating enterprise performance measures into actionable plans that accelerate profitability, reduce operational expenses and optimize corporate value.
Jim is enthusiastic about the opportunity, and the company’s bright future. “Chamberlain Group is a stellar organization with an impressive reputation,” Jim says. “It’s great to be a part of the team.”
Significant news was issued by the Treasury Department and Internal Revenue Service on August 2, 2016. If enacted, the "Proposed Section 2704 Regulations" would impact various family estate and gift tax planning strategies. These proposed regulations are directed at family controlled entities, including corporations, partnerships and limited liability companies. These regulations, if finalized, will significantly limit or eliminate the ability of family members to transfer interests to obtain valuation discounts on the transfer of partial interests in family controlled entities.
Many estate planning techniques utilize valuation discounts to increase significantly the amount of property that may be gifted or otherwise transferred to or in trust for family members. These discounts can range from 15% – 40%. This includes Grantor Retained Annuity Trusts (GRATs), sales or gifts to Intentionally Defective Grantor Trusts (IDGTs), Charitable Lead Trusts (CLTs) and others. The discounts most often used in the transfer of interests in family controlled entities between family membersinvolve a lack of control (minority interest) and lack of marketability associated with the interest. The proposed regulations would, in general, value an entity owned by family members in its entirety and an individual owner’s interest would be valued as a pro-rata share of the whole fair market value of the entity. The proposed regulations would also treat certain transfers made within three years of the transferor’s death as a date of death transfer, thereby increasing the transferor’s estate for death tax purposes. There is a 90-day period for the public to comment on these proposed regulations and final regulations could be issued as early as January 2017.
We have limited time to assess, design, and implement these techniques and strategies under current law, before the proposed regulations are adopted and become final. If you have any more estate planning to do, we suggest that you consider completing it promptly. We would be happy to discuss your options with you.
Over the last month the term “Brexit” has forced its way into headlines and every day conversations. But what exactly is “Brexit” and more importantly how does it impact you and your investments?
What is Brexit? “Brexit,” a combination of the words “British” and “exit,” is the commonly used term to describe a vote held on June 23rd, in which the United Kingdom (England, Whales, Scotland and Northern Ireland) decided to no longer remain a member of the European Union (EU).
Why is Brexit making so many headlines? While most experts felt the vote would be close, the vast majority thought that the UK would remain in the EU. The UK has been part of the EU since 1973, so deciding to leave came as a bit of a surprise, and generated uncertainty as to the implications of this decision.
Why would the UK want to leave the EU? The EU offers many benefits to its members, including free trade and the ability for citizens to travel easily from country to country. However, there are downsides to being an EU member, the largest of which is the inability to control immigration of EU citizens from one country to another. The UK has a desirable location within the EU which has caused a significant influx of immigration into the country. Immigration has created immense social tension, enough that the UK felt the negatives of remaining in the EU outweighed the positives.
Now what happens? As of a result of the Brexit vote, English Prime Minister James Cameron, who supported staying in the EU, has resigned and been replaced by Theresa May, who will lead the exit process. Most experts believe that it will take at least 2 years for the UK to formally leave the EU, giving the country time to negotiate new trade treaties and to stabilize the economy. During that period, businesses will begin to make plans to on how to operate within Europe, but the uncertainty around the situation will most likely cause businesses (and investors) to be very conservative.
Should I be worried? Immediately after the Brexit vote the equity markets experienced a sharp selloff, but since then they have rebounded and the global equity markets are at higher levels than they were before Brexit.
How does this impact my investments? We remain cautious in our views of the market as most areas in the investment universe look expensive and we are late in the economic cycle, meaning that we are probably closer to an economic downturn than to strong economic expansion. The short term volatility around situations like the Brexit may create opportunistic investments which we will capitalize on, but overall we remain guarded and focused on limiting our downside. The longer term ramifications of the Brexit vote, recent terrorist attacks and political volatility in Europe all contribute to an uncertain future, however we remain vigilant and will act swiftly if anything changes in the marketplace.
A Word from Mike Kiley
I’m excited that Chamberlain Group is celebrating the significant milestone of 40 years in business. As I reflect back on this time, I’m both grateful and humbled, and also eager for what’s ahead.
The company was founded to help successful business owners and super affluent families build, protect, and steward their wealth for the benefit of their family, company and community, creating value for generations.
We set out to be the best we could be, and to build an organization that would provide responsive and reliable service. Our strategy has always been to intentionally manage the number of clients we serve at any given point in time so that each could be afforded a customized experience according to their desires. To achieve our goals, we assembled one of the most talented and experienced teams in the industry to bring creativity and resourcefulness to our client's needs. I am grateful to be associated with this extraordinary team.
In the early years, we focused on estate and succession planning, and now have the privilege of sharing success stories of companies being transferred through three generations. We became adept at assisting with the planning process so that estates transfer efficiently and in an orderly manner, with little or no taxation. Personally, I’m pleased we have been a part of large philanthropic initiatives benefiting the community as well as our clients’ favorite charities.
In the 1980's, we became one of the early shareholders in the M Financial Group, which is a national leader in the design, implementation, and administration of non-qualified retirement plans for for-profit and not-for-profit organizations. We have paid out very significant retirement benefits to key executives, allowing them to compensate for the effects of reduced qualified retirement plan benefits. While serving our privately held company clients, many whom are family owned, we’ve had the pleasure of seeing them successfully transfer from one generation to the next with little disruption and no legal or tax surprises. Our unique proprietary insurance solutions played a major role in making this possible.
In 1983, we established our investment advisory practice to help clients who had sold their companies, to build and protect their net worth. As one of the few firms in the country with both investment and insurance advisory services, we were fortunate to read the signs of a pending convergence of the insurance and investment industries, and created a unique interplay to generate enhanced results for our clients.
I am thankful for our incredible clients who have trusted us with their business, their families, and their legacies. It has been an honor. We look forward to serving you for many more years.