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The Way We Operate Our Practices and the Practice of Our Lives

The Way We Operate Our Practices and the Practice of Our Lives

As the saying goes “time and tide waits for no man.” Today marked the 3rd month of our educational and awareness newsletter to public on Asset Protection and Preservation of their hard earned wealth for high complex, both Muslim and Non Muslim, clients. Having trained and acquired relevant qualification in Financial Planning has enabled us to practice professionally with much confidence.

Ever since the 1st month of our newsletters, we in A.D. FINANCIAL have received countless calls and enquiries pertaining to what and how we operate our practices. Having acknowledged the challenges in reaching out to the public, below are the frequently asked questions posed by the public.

  1. I’m not sure whether I can be categorized as High Complex Individual but I do worry about losing my wealth due to unforeseeable and uncontrollable factors?
  2. You mean Estate Planning is not all about DEATH?
  3. I have written a Will. Isn’t it enough? What other options are there for me to hold the complexities of my wealth structures?
  4. I’ve been appointed as director of several companies and have been signing for director’s guarantees for several corporate loans taken up by these companies. What possible impacts would they have on my wealth? How do I circumvent it?
  5. I have appointed some bumiputera partners to be my proxy(s) for some government projects. How can my family members’ interest be protected in the event of my death? Alternatively, what will happen to my proxy’s shares should he/she predeceases me? How can those shares be transferred back to me?
  6. I have some offshore assets. How can I bring it back onshore without having it physically transferred?
  7. How do I prevent squandering heir(s) and their creditors from touching my wealth?
  8. I had previously been audited and summonsed by Inland Revenue Bureau (IRB). How can I plan my wealth better?
  9. I’m a Muslim. What are my options in Islamic Estate Planning and Syariah compliant plans? How can I provide for my adopted son and minimize the impact of Faraid laws to my intended heir(s)?
  10. As a Muslim convert, how do I provide for my adopted children and non Muslim family heir(s)? What are my options in Islamic perspectives?

So you see, the above questions seem to be bothering a lot of Malaysians. In fact many are still ignorant about the risks they are facing. They are either too busy or just couldn’t care less. They would rather sweep it under the carpet and only deal with it when it becomes critical.

Dealing With Your Wealth Complexities Structure

After many years of accumulating your wealth, it is about time to review your current wealth holding structure. While many of our clients had been doing very well in accumulating their wealth, most of them lack the knowledge and skills in preserving their wealth.

Preserving what you have accumulated, so that those wealth will not be subjected to shrinkage due to unforeseeable and uncontrollable factors, is like having a goalkeeper in a soccer match. While most of the teammates strategize to forward an attack and attempt to score a goal, the duty of a goalkeeper is to minimize or circumvent any possible strike toward his net. Such role is called “Preservation”.

There was a client, Patty (not her real name). She was in her early forties and was concerned about their family wealth when her husband, in his fifties, plans to venture into a new business with some other new partners. Patty, being the home maker and family financial gatekeeper had mixed feelings towards this new idea her husband had. We were amazed when told, during the interview, about how she and her husband accumulated their wealth. The agony, challenges and the glorious moments they shared during the accumulation process can never be laid in simple words. Some of our concerns are…


  1. Have they ever considered taking a back seat instead, by understanding their current wealth status to determine the sufficiency for the kind of lifestyle they want?
  2. What if the business venture fails and can their family wealth withstand the impact of such failure? At such age, both Patty and husband should look into Preservation strategies instead.
  3. Have they thought about the uncontrollable factor such as economic risk, incompetence risk and legal risk that would have significant impact to their family wealth?
  4. Is there really a need to start a new wealth accumulation course? Should they instead look into planning for their golden years and have all the time to themselves doing things that they have always wanted to do?
  5. Have they ever thought that their exit strategy could be difficult and complicated? What if there’s no successor and buyers?
  6. Upon death, what would happen to the business? Are the surviving partners willing to buy over the deceased’s shares? If not, are the deceased’s heir(s) allowed to participate in the business? Do theyhave a corporate Will to ensure smooth transition of the business in the event of death to any of the partners?


There’s no end to wealth accumulation course, as the saying goes “money is never enough”. Questions like when should we stop accumulating has never crossed a heroic mind. Malaysians are forgetful lots. The last economic crisis taught us many unlearned lessons. Family wealth, small medium businesses and big organizations perished over night. As a result, many had been made bankrupted by their creditor(s). Thanks to no preservation strategies.

Starting with a “check up” is a healthy way to review your current approach that you have used to hold and owned your wealth. All it takes is just some critical thinking, just like those thinking you have made when acquiring your wealth and those that had contributed to what you owned today.

Critical Thinking

The most important step in achieving Preservation strategies is to first admit that your current wealth holding structure is vulnerable and are subjected to possible shrinkage. Only with such conviction, one will achieve “Critical Thinking” that would enable them to take a serious stance towards their hard earned wealth and thus produce a basic instinct of preservation in them.

Critical Thinking can be defined as…


“a phrase that implies an ability to analyze ideas and solve problems whilst taking a sufficiently independent ‘critical’ stance towards authority to think things out for one self.”


While the instincts of preservation may differ at every stage of life, the fundamentals are not likely to change i.e. your goals and objectives. For example, your wealth that had been preserved for generational wealth strategies, so that it can be passed to each generation, can never be affected by external forces as the inbuilt structures are rock- solid. This magic word is called a PLAN.

At A.D., we make a plan to convey relevant information that is critical to your mindset about Asset Preservation. As our Basic Instinct is Preservation, we begin by creating a system in which you can sort your thoughts and construct that decisive stance through our P-L-A-N.


How do we define it?

P  - Paradigm Shift
L  - Lay a Foundation
A  - Administrate
N  - New Rule Principles



P - PARADIGM SHIFT
(Sometimes referred to as Adapt or Die) Paradigm Shift – (Wikepedia) – the term used by Thomas Kuhn in his 1962 book The Structure of Scientific Revolutions to describe a change in basic assumptions within the ruling theory of science.

This theory applies to many human experiences. When enough significant inconsistencies appear against a current logic and paradigm, the current model shifts into crisis. Out of this crisis springs a new model of critical thinking. The result of this critical thinking is called Paradigm Shift. Such theory has become known and applicable to many successful business models too.

Einstein’s theory on the state of reality and relativity provides the parent model that is never stable; it is a constantly changing and evolving state, resulting from attacks and reactions. This is very similar to the state of reality in tortuous laws and Asset Preservation strategies.

Chaotic rules, restricting policies and changing laws evolving from new Lawmakers for instance a bankruptcy code, will challenge financial planners like us while designing your personal plan. Meanwhile changes in your Asset structures, family members and business partners require us to put on a Thinking Cap to circumvent any foreseeable risks that would be detrimental to your wealth. Being aware of these changes will give you an enormous advantage in creating a plan that is secure, both for now and in the future.

Therefore, these are mind boggling issues. Literally, you can try putting on your own CAP by judging the changing issues and unsettled issues that concern you. Step out of the box and try to attack yourself (as though your foes are attacking your wealth), expose your business and your life to every crisis, chaos and liabilities that you can imagine. How did it feel? Do you have any solutions? Would you choose to assume that it will never happen to you? Do you have any contingency plans?

The foundation of a solid plan is to meet the criteria and withstand the attacks of the crisis from paradigm shifts.



L - LAY A FOUNDATION
Once you realize that you are vulnerable, your instinct for preservation and security override your fear. You now have an established goal or result in mind and then you must take an inventory to determine where you will start.

Inventory

- Make a list of your assets NOW.
- Make a list of what you predict your assets to be in the future.
- Make a list of your liabilities NOW.
- Make a list of the liabilities you predict in your future.


Seek Professional Help

Come to a financial planner (make sure that they are Licensed with either Securities Commission or Bank Negara) with an open mind. Since Financial Planning is a diverse subject, make sure the financial planner basic instincts (business model) is Preservation (as most are on Accumulation model) and that they are competent in handling those sticky issues.

Be emotionally prepared to face the exposure of the unknown. Your newfound understanding should shift your paradigm from uncertain feelings to safe measures. A good financial planner should “Lay a Foundation” that meets the burdens and demands of our ever-changing society and gives you this secure feeling.

What is a good foundation? You have a goal and you have a place to start. A good plan is the plan that gets you from A to Z, essentially backed by the laws and policies that govern each step.



A - ADMINISTRATE
Reality is the basis for a good foundation; this means that you must accurately take an inventory of your assets and liabilities in order to efficiently administrate and execute your plan.

Administrating a plan involves the following steps:
- A conversation addressing your personal needs, concerns and goals
- A follow up questionnaire and application process
- An engagement letter
- An education program to help you make the best decisions
- A personal plan targeted to address your needs for Asset Preservation
- Implementation of your plan
- Follow-up and management

Turn around time varies but typically, accomplishment occurs within the period of a few weeks. During this time, A.D. manages and oversees each step along with you.



N - NEW PRINCIPLE RULE – KINETIC ASSET PRESERVATION
At times, changes are inevitable. Even your goals and objectives may vary according to those changes. Hence your Kinetic Asset Preservation strategies have to be flexible and must have provisions for such changes. These changes are necessary to allow the flexibility that is essential to meet your changing life, your changing business and your family structure. An Asset Preservation Plan requires built-in flexibility to conquer the liabilities, those known today and those that are unknown tomorrow. As paradigms change, so must you.

Conclusions

If you are not prepared to change, your hard earned wealth risks survival and is vulnerable to shrinkage. An Asset Preservation plan is merely just another plan during your course of acquiring and accumulating the wealth

You should maintain a good rapport and confidence level with your financial planner. At A.D. FINANCIAL, we take the time to understand your life so that the plan fits you. No single model meets the requirement of everyone; a personal plan is necessary to ensure your assets are out of THREAT.

We, like you, must be prepared



At A.D., we start our relationships by listening to you and putting…YOU FIRST
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Alvin Yap is the Principal Consultant and Group Managing Director of A.D. Financial Sdn Bhd (“ADF”). Under his leadership, ADF has expanded its footprint in Asia by establishing offices in Singapore and Hong Kong to provide consultancy for high net worth clients from Singapore, Indonesia, Vietnam, China and other countries. Besides that, he is highly sought after to speak in regional and international family wealth planning seminars. His expertise in Business Succession Planning has led many business owners and founders of listed companies to seek his advice on their complex business continuation and personal wealth matters.

Alvin is currently devoting his Practice to Multi Family Office Advisory for high net worth Individuals in structuring their complex wealth matters with a view to preserve their hard earned wealth. A strong believer of “Preservation First, Accumulation Second” and “Distribution Last”, Alvin’s expertise injects a fresh perspective on how wealth and family values can be preserved for many generations in Asian families.


If it is worth striving for, It is worth preserving

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