Frank Seneco is founder and president of Seneco & Associates Inc., an advanced planning boutique in New Haven, Conn., catering primarily to the exceptionally wealthy. (Seneco also is a columnist for Private Wealth magazine.) In the following interview, Seneco talks about what it takes to deliver life insurance solutions to the very wealthy, including what’s required in terms of state-of-the-art technology and building a business model that meets clients’ needs.


Prince: How would you describe Seneco & Associates?
Seneco: Seneco & Associates is a boutique advanced planning firm specializing in life insurance. To be very clear, what we do very well and how we make most of our money is by providing sophisticated life insurance structures to the wealthy and very wealthy.

We can access every type of life insurance, and my affiliation with First Financial Resources and with other leading industry authorities ensures that we can deliver exceptional solutions. The life insurance marketplace is a constantly changing landscape, so we have to stay on top of those changes as we bring innovative solutions to clients. For example, our ability to make sure the right policy is provided to affluent clients means we need to be highly flexible from financing premiums to dialing down the commissions as well as using low-load products when they are appropriate.

Increasingly, for instance, we’re finding that the very wealthy, such as family offices, are interested in private placement life insurance and private placement variable annuities. We’re agnostic when it comes to the platform or insurance carrier, whether a domestic or offshore insurer, and are able to search out the best for any particular client situation. When we are involved in these cases, our responsibility is providing and monitoring the insurance wrapper. We have no involvement with the investments inside the policies.

Prince: When you talk about the wealthy and very wealthy, what kind of numbers are we dealing with?
Seneco: My firm is set up to provide an exceptional experience to every client no matter how wealthy he or she is. I prefer working with clients who are in the “very wealthy category.” The situations tend to be much more interesting. In most cases these clients have already done some planning, whether it is life insurance in trust or other legal strategies such as GRATs, intentionally defective grantor trusts, family limited partnerships, or charitable planning. We look at the whole situation to find ways to solve problems that may be hidden and to properly integrate the life insurance into the planning.  For example, we recently placed $100 million of new coverage on a billionaire who already had a significant amount of life insurance in place. In a case like this, with a significant amount of coverage already in place, the challenge is finding additional appropriate coverage available in the marketplace. This means navigating through the reinsurance marketplace and accessing multiple insurance carriers for their internal retention amounts. We’re looking to do the same coverage or more on another billionaire. These types of cases are complicated and demanding, but they’re challenging and, in their own way, educational.

Now, I don’t want anyone to get the idea that we spend all our time working with billionaires. That would be nice, but it’s not reality. Many of our clients are in the $30 million to $100 million range. These are people who can benefit from sophisticated planning where life insurance is a part of the solution set.

Prince: Going beyond net worth, what type of clients do you tend to deal with?
Seneco: Most of our clients are business owners running companies in fields such as real estate, construction, retail and manufacturing. We usually provide them with life insurance to fund buy/sell agreements, address key person issues and pay future estate taxes.

Some of the work we do is with foreign nationals. These people have a need for large amounts of life insurance, which is not available in their country of residence. They like the fact that the policies are denominated in U.S. dollars, and the distributions are currently exempt from U.S. tax withholdings on gains in the policy.

We also have a number of hedge fund and private equity general partners as clients. Lastly, there are celebrities—both entertainers and athletes. Clearly, our clientele covers the spectrum of wealth creators with a handful of inheritors and divorcees mixed in.

Prince: Aside from life insurance, what other products do you offer?
Seneco: We provide traditional and high-limit disability insurance usually for business owners and celebrities. The only other meaningful offering is captive insurance companies.

We’re finding a growing demand for the ability to customize risk coverage. In our experience, hedge funds and private equity funds, as well as middle-market companies, are increasingly finding captives can provide real advantages. For example, we’re seeing more and more hedge fund managers using captives to address very specific risks such as cyber-liability, tortious interference and intellectual property infringement. Not only are captives able to address specific risks with customized solutions, but also if there are few or no claims and the excess capital and surplus builds up, there are some very substantial ways the captive insurance company can enhance its owner’s personal wealth.

Prince: What services and products don’t you provide?
Seneco: If you take life insurance including private placement life insurance, disability insurance and captive insurance companies off the table, we’re out. We’re not in the money management business. We also don’t provide credit or banking services.

While we’re regularly involved in the planning process to address issues related to life insurance, we don’t formally do any planning. Based on the way our business model works, when opportunities for these products and services like money management come along, we direct the wealthy clients to the professionals that brought us in.

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