What makes entrepreneurs special is the fact that when they see a problem, they also see an opportunity. Problems that people see and ignore or endure, tickle the problem-solving attitude of entrepreneurs. They don’t rest until they have found a solution so that no one endures the problem anymore.
Ryan K. Foncannon started out working in the senior citizen space providing Medicare, life insurance, annuities, and long-term care insurance. While providing his services, he noticed his high-wage W-2 earner and successful business owner clients not getting much help in the tax strategy space. They didn’t have bad accountants. They were good at tax preparation and recording what happened in the past. They were just not great at being more holistic and proactive. He also saw this with other advisors on the wealth side. The advisors wouldn’t talk about anything that was not part of the stock market. There’s a lot more planning available out there for clients, especially in the alternative space.
The problem-solver that Ryan was, he set out to learn the strategies that the billionaires were using to pay little or no tax. He wanted to bring the strategies from Wall Street to Main Street America. This was the start of his company, S.W.A.N. VFO. This has paid off for his clients not just on the advanced tax side, but across the board. Ryan and his team bring all of these strategies to fruition. He lists a lot of the specialists he works with on his website, but not all. He has access to over 80+ specialists on his VFO (Virtual Family Office) team. He also works with over 30+ tax offices to bring these strategies and options to their clients. The tax professionals like using his back-office support or VFO to not only educate clients but also implement the strategies.
Tax Planning – The Profitable Way
Ryan felt the high net worth, high wage W-2 earner, and business owner markets were severely underserved by the transactional advisors that they use. His team wanted to create a one-stop-shop for these types of clients. They wanted to bring together the best-in-class specialists from across the country on an as-needed basis. They wanted to create a team-based or web-based group of advanced specialists that work in unison to bring together the best options for the client. That would produce the best outcomes for the client and not the advisor. That is exactly what they have done.
Ryan’s team at S.W.A.N. VFO can bring very sophisticated planning across the disciplines of financing, business advisory, legal, insurance, private wealth management, and advanced tax planning. They separate themselves from all their competitors with the advanced tax planning they do, especially with the strategies they bring to the table.
“It does not matter if a client is a business owner or high wage W-2 earner, we have impact strategies for both. This ties into the other disciplines in an advanced way, which can create an overlap with this type of higher-level planning when you understand how everything works together. We also feel that the high-net-worth and ultra-high-net-worth clients are not getting the best planning to help them opt out of having to pay large Estate Taxes after they pass away. We feel this market is highly underserved. There are too many examples to list of estates of famous people that got severely taxed when they did not have to be with proper advanced planning,” shares Ryan.
Strategizing it Right
When approaching advanced tax planning for high-wage earners Ryan and his team look at the total picture. How much is the total household income or AGI? How much is the net worth of the family? Are there any real estate properties? What is their current Federal tax liability? These questions and more help them formulate what they can do.
“AGI or total household income qualifies folks for a lot of strategies we use. A high-wage earner on the granular level that does not have net worth, real estate, and/or a spouse that has a business needs to make: Single: $400,000+ or Joint: $500k+ as AGI or total household income. The reason for this is the standard deduction. Most strategies need to be higher than the standard deduction for it to do anything to the tax return,” explains Ryan.
Sharing examples, he says, “I had to call out a financial advisor last year for putting clients into strategies that did NOT put them over this hump but told them it would save them in taxes. It didn’t. The clients put in $11,000 and their deduction was higher than that of an individual. So, it didn’t do anything, and it underperformed. If we just focused on what one person made, we would miss out on a ton of other options. We had a doctor last year for whom we used 3 strategies and saved about 91% on their taxes between Federal and State. Some of those strategies had a cash flow to them too. He is now taking the next step with us to do the total picture planning or what we call ‘smoker planning’. It takes longer, but it will cover all the bases. Our largest client we saved them over 8 figures in taxes and that did not count the amount of estate taxes that we are saving them, which is in the $100+ million range.”
The 6 Pillars of Advanced Planning
The 6 Pillars of Advanced Planning at S.W.A.N. VFO have a lot of overlap in the strategies that it offers. The six pillars are Financing, Business Advisory, Advanced Legal, Advanced Insurance Concepts, Private Wealth Management, and Advanced Tax Planning.
Other than regular planning, their knack for understanding, educating, and implementing the different advanced strategies sets them apart. There can be overlap in advanced strategies that can bring much better outcomes to the client versus being transactional on each need.
“By looking at the whole picture, strategies that create better outcomes overall reveal themselves to us. As an example, there was a medium-sized trucking company we worked with. They had issues with insurance costs, rising labor & non-labor costs, cash flow issues, the need for better benefits to keep employees, and the owner wanted to put more away for retirement. We implemented 3 high-impact strategies that significantly lowered insurance costs, labor & non-labor costs, and increased cash flow significantly. This allowed them to add more pre- and after-tax benefits. This also allowed the owner to put away over $500,000 in advanced qualified plans for retirement. On his 1040 return, we used 3 high-impact strategies to lower his taxes by over 90% or said another way, we saved him over $700k in federal taxes alone,” shares Ryan as he explains.
Readying for Everyday Challenges
Ryan takes a few steps back and looks at the total picture for the client. The client may have a large capital gains event and that is their focus, but by looking at the bigger picture, Ryan can bring better strategies to the table that act like a Swiss army knife to cover other bases that are of concern too.
Since S.W.A.N. VFO is an independent firm, it can adjust and pivot very quickly. Other firms that are more ‘corporate’ are harder to adjust to new challenges. They can not only change quickly, but can also pivot to a new way of doing things to maximize the outcome for the client.
Their biggest challenge, however, came from a different quarter. The company rebranded to be a Virtual Family Office (VFO) about 6 months before the pandemic. A lot of people were very leery of the idea of a ‘virtual’ company. “Everyone needs a little luck in business. The pandemic happened to be the best thing to ever happen to us. Potential clients of all ages were hopping on Zoom calls and Facetime on their phones and computers. What was a huge challenge for us really turned the corner,” says Ryan.
Emerging Trends
Ryan observes that the laws are always changing. Some strategies will sunset and new ones will create new opportunities. A lot of different laws are set to sunset in 2026. That will create a great opportunity for those who can pivot to the new strategies or know the current strategies that are back on the table.
Ryan predicts that revenue sharing and ecosystem merging to be an integral part of doing business in the years to come. This is different from the traditional referral model. This is more of having a true partnership and not a handoff. This is about adding more value than you take.
“Via our VFO, we have numerous ecosystem mergers with tax practices, law practices, and even other financial advisors. The ones that can participate in the revenue sharing, really love it. They are not only involved, but they are the stars of the show. We feel that this on top of what we are already doing will totally disrupt the financial, insurance, and tax industries,” says Ryan.
To stay updated on ever-evolving tax laws and regulations, S.W.A.N. has an extensive network of specialists. They help the company stay on top of things, including staying on top of sunsetting tax strategies and recognizing opportunities to pivot to for the clients. Ryan does extensive training in continuing education, webinars, whitepapers, etc. to stay on top of what is happening next. He is on the tax board for the National Small Business Association, who appreciate his input and keeps him abreast of any potential or actual law changes.
“If you know a law change is going to happen before it happens, it allows you time to plan. We are also on the Leadership Board with NSBA (National Small Business Association) dealing with tax policy. This also helps us stay on top of what is coming down the road and how we can pivot to other strategies via the tax code,” he says.
Summing up his future endeavors, Ryan concludes, “Our goal is to disrupt the tax and financial sectors in a major way. You can expect that from us and what has already been said. We also see us helping people achieve their money, time, and magic. We will be actualizers to other tax, legal, and financial professionals to help them achieve the more they are seeking in their lives.”
Quote: “Do what is right, no matter what the cost. –Scott Foncannon”
Quote: “My mission is to help business owners and high-income earners build wealth.”
Quote: “I am passionate about delivering a wide range of state-of-the-art expertise, by structuring cohesive teams of specialists for each client, and driving down costs for both myself and my clients.”
