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GFD OVERVIEW
About GFD
Global Financial Distributors (GFD) is a full service insurance agency providing products, concepts, advice and counsel to financial service professionals. GFD is a subsidiary of Entaire Global Companies, Inc. (EGC) – a diversified financial
services holding company.
GFD has an exclusive arrangement with Global One Financial, Inc. (G1), a com-mercial lender to offer turn-key leveraged compensation, planning and retirement programs focused on the small business market space, offered under the Lever-aged Planning® brand.
In addition to the focus on Leveraged Planning® programs, GFD – through internal sales and business development personnel – markets to, trains and advises independent insurance agents and licensed financial services profes-sionals on all aspects of financial prod-ucts and differing concepts in all fifty states. GFD also reaches the end-user consumer directly through an extensive print and web approach and works with them individually to achieve their planning goals.
Leveraged Planning Programs
Leveraged Planning programs use a patented financing structure to provide business owners with a tax efficient tool for implementing a wide range of financial planning options including: retirement funding, business succession planning and investment portfolio risk reduction. In addition, the Leveraged Planning
program structure allows GFD to provide funding for a broad range of insurance and annuity based compensation offerings.
In their most common form, these
programs function by conferring the ability to leverage business assets to provide the basis for a loan made to the corporation which funds the acquisition of an insurance or annuity product in the name of the business owner or key employee. Other structures, leveraged assets, etc. can be implemented as well.
GFD offers comprehensive program administration for these programs through another EGC subsidiary – Entaire Global Plan Administrators, Inc.
GFD’s unique competitive
advantage lies in its
ability to bring to market
a complete system...
that combines all of the necessary compo-nents together under one corporate umbrella and in one package, enabling broad-based distribution to the market-place, comprehensive support and program management, and significant flexibility in program structure and imple-mentation.
History
In March 2004, GFD’s lending affiliate, G1 developed a several hundred million dollar structured finance facility with Dresdner Kleinwort Wasserstein, which, until June 2011, was utilized as the primary vehicle for funding the Leveraged Planning®
product line. A subsequent arrangement with Credit Agricole has broadened the facility and opened up a range of additional program offerings for GFD. Comerica Bank, N.A. provides a warehouse line of credit in connection with the G1 financing facilities while Wells Fargo Bank serves as collateral agent and backup servicer.
Management Team
GFD – and its parent organization, EGC – have recruited management personnel from a variety of disciplines, including finance, banking, legal, insurance, sales, and marketing. All GFD employees are stakeholders in the company.
Market Opportunity
GFD believes that the market opportunity for Leveraged Planning® programs is between 1.1 million (10 to 99 employees) and 4.8 million (including those with under 10 employees) small businesses, struc-tured primarily as S-corporations, LLCs, and smaller C-corporations. Also included in the target market demographic are professional organizations (legal, medical, consulting, architectural, accounting, etc.) typically consisting of one or more independent professionals in practices with a history of strong cash flow. GFD is only just beginning to realize the potential of its turn-key program structure and offers insurance products provided under arrangements with highly rated insurance carriers. A representative sampling includes carriers such as: American General, Lincoln Benefit Life Company (Allstate Financial), ING (Security Life of Denver), Minnesota Mutual and American National Life Insurance Com-pany.
GFD continually evaluates new insurance carriers for program participation. The business model largely uses outside distribution relationships to reach its market, and should require only modest incremental capabilities to increase its level of business.
GFDOV_0711 As of 07/25/11 3805 Crestwood Pkwy, Ste.175 | Duluth, GA 30096 | 1-800-515-2599 | www.globalfd.com
For additional information, please contact Global Financial Distributors.
GLOBAL ONE FINANCIAL
RATE TABLE
ESTATE PLANNING
BUY/SELL
ESTATE PLANNING
INCOME PLANNING
WEALTH CREATION
The Client: Dr. John Barnett, 45
Hadn’t funded any form of retirement income program for himself.
Needs life insurance and at least $80,000 per year of income for at least 25 years according to his financial advisor.
Using Leveraged Planning
®, Dr. Barnett was able
to fully fund his estate planning requirements and
provide his family with over $7,000,000 of death
benefit by using his practice to fund the policy. His
practice, meanwhile, realized an expense of just
$252,000 while the policy credited over two times
that amount during the same period of time.
1.800.515.2599
www.GlobalFD.com
™
* This case study is based on an actual client. Individual results may vary.
The Solution: Leveraged Planning®
Dr. Barnett chose a Leveraged Planning® program offered by GFD to help him quickly fund a life insurance policy that would meet the needs of his family. In July of 2002, Dr. Barnett implemented a $1,200,000 Leveraged Planning® program, borrowing the funds from Global One Financial, Inc. in the form of a commercial loan. The funds from the loan were placed into an indexed universal life insurance product for Dr. Barnett’s personal benefit.
Over the subsequent 10 years, the doctor’s practice paid $372,600 in simple interest on the
commercial loan, while the life insurance policy credited $780,286. The death benefit of the policy, $7,478,400, was more than enough to secure a reliable financial future for his wife and children.
SUPPLEMENTAL
RETIREMENT INCOME
ESTATE PLANNING
INCOME PLANNING
WEALTH CREATION
The Client: John Sinclair, 50
Had funded an expected annual retirement income of $100,000. Needs at least an expected annual retirement income of $300,000.
Using a Leveraged Planning
®program, Mr. Sinclair
realized a three year return (over loan interest paid)
in excess of 90% - this at a time when the markets
initially lost nearly 50% of their value and
subse-quently regained only a fraction of that original loss!
1.800.515.2599
www.GlobalFD.com
™
*This case study is based on an actual client. Individual results may vary. Mr. Sinclair chose to take the tax deduction for the loan interest expense. Without the deduction, a program gain of 23.57% over the three year period would have resulted.
The Solution: Leveraged Planning®
Mr. Sinclair chose a Leveraged Planning® program from GFD as a conservative approach to supplement his existing retirement planning portfolio. In March 2007, a $2.4 million program – utilizing an equity-indexed annuity from a leading carrier – was put in place for Mr. Sinclair.
Over a three year period from 2007 to 2010, Mr. Sinclair’s construction firm paid $337,425 in interest on the commercial loan. During the same period, the policy credited $641,498.
In the three years since the program was put in place, the positive balance in policy interest
crediting versus the loan interest paid by his firm provided Mr. Sinclair a return of over 90% to his retirement planning portfolio*
SHORTENED
PLANNING HORIZON
BUY/SELL
ESTATE PLANNING
INCOME PLANNING
WEALTH CREATION
The Client: Dr. Judy Boyd, 45
Hadn’t funded any form of retirement income program for herself.
Needs at least $225,000 per year of income for at least 20 years according to her financial advisor.
*This case study is based on an actual client and is to be used by independent agents with the permission of Global Financial Distributors. Individual results may vary. Dr. Boyd’s practice chose to take the tax deduction for the loan interest expense. Without the deduction, a program gain of 79.41% over the two year period would have resulted.
Dr. Boyd’s Leveraged Planning
®program provided
her a two year gain (over loan interest paid) of 176%
- putting her significantly farther ahead in funding
her retirement income needs than she thought was
possible.
1.800.515.2599
www.GlobalFD.com
™
The Solution: Leveraged Planning®
Dr. Boyd, after examining her options, chose a Leveraged Planning® program from GFD to more rapidly fund her retirement income needs. In February of 2008, Dr. Boyd’s practice signed a note for a $1.5 million program – one which would utilize an equity-indexed annuity from a leading carrier.
The subsequent returns impressed both the Doctor and her financial advisor. Between
February 2008 and February 2010, Dr. Boyd’s practice paid $75,170 in interest on the
commercial loan. During the same period, the policy has credited $207,488.
Since program inception, the two year positive growth in the product crediting interest versus the loan interest paid have provided a return of over 176% to Dr. Boyd’s retirement planning portfolio.*
RETIREMENT FUNDING
BUY/SELL
ESTATE PLANNING
INCOME PLANNING
WEALTH CREATION
The Client: Walter Flynn, 40
Hadn’t funded any form of retirement income program for himself.
Needs life insurance and at least $150,000 per year of income for at least 25 years according to his financial advisor.
Using a Leveraged Planning
®program, Mr. Flynn
realized a two year return (over loan interest paid)
in excess of 207% - this at a time when the markets
were barely returning 5% per year!
1.800.515.2599
www.GlobalFD.com
™
This case study is based on an actual client. Individual results may vary. Mr. Flynn’s business chose to take the tax deduction for the loan interest expense. Without the deduction, a program gain of 100.01% over the two year period would have resulted.
The Solution: Leveraged Planning®
Mr. Flynn chose a Leveraged Planning® program from GFD to help him more rapidly build up the nest egg he would need. In March 2008, a $1 million program – utilizing an equity-in-dexed annuity from a leading carrier – was put in place for Mr. Flynn. Mr. Flynn could have used a life insurance product but his advisor felt his coverage needs had been met.
Over a two year period from 2008 to 2010, Mr. Flynn’s company paid $78,640 in interest on the commercial loan. During the same period, the policy credited $241,989.
In the two years following program inception, the positive balance in the crediting versus the loan interest paid by his firm provided Mr. Flynn a return
of over 207% to his retirement planning portfolio*.
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LEVERAGED PLANNING®
PROGRAM OVERVIEW
BUY/SELL
ESTATE PLANNING
INCOME PLANNING
WEALTH CREATION
The Client: Michael Cena, 40
Needs at least an expected annual income of $200,000 (pre-tax) for 25 years to retire comfortably.
Examining the Leveraged Planning program, Michael found a somewhat different situation. With a Leveraged Planning pro-gram, Michael found that he could meet the same future lump sum amount ($2,959,728) by putting away $899,102 today earning 6% in a principal protected financial product offering downside protection and the opportunity for significant, market-indexed gains.
Using the Leveraged Planning program, Michael’s firm would take out a simple interest-only commercial loan – one for which he was not personally liable. The firm, in turn, would service the loan with monthly payments of $4,495 for an annual total of $53,946. This meant that the total allocation over the subsequent 25 years was only $1,348,653. Comparing the two options for funding his retirement income needs, the differences were very clear and compelling.
The Solution: Leveraged Planning®
At 40, Michael’s appetite for risk had lessened as his time horizon was shortened substantially. Because of this, he was looking at many options that were likely to produce lower returns than he might have hoped to earn. Narrowing down his options, Michael found himself considering two: a more traditional savings vehicle and a program his advisor had introduced to him – Leveraged Planning.
Assuming he would earn a conservative rate of return in his re-tirement years, Michael expected he would need to have a “nest egg” of $2,959,728 by age 65.
Looking at the traditional savings product, Michael assumed an annual return rate of 3% - at this rate, Michael would have to save $78,815 after tax dollars each year in order to fully fund his future income expectations. Looking at it on a pre-tax basis, this meant that Michael would have to allocate $131,358 every year for the next 25 years to meet his goal.
Over the coming 25 years, this meant Michael would be putting away $3,283,942 pre-tax dollars in order to meet his future income goals if he used the traditional product.
The problem for Michael was clear: starting with nothing and using a traditional product offering meant that his money would have to work very hard to get him where he needed to be.
GFDCS_0711 As of 07/14/2011
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$200,000
$1,935,290
Total lifetime savings using Leveraged Planning
®:
$1,348,653
Total required lifetime
using Leveraged Planning
®:
$3,283,943
1.800.515.2599
www.GlobalFD.com
™
Total required lifetime
using traditional savings:
*Return of all paid in funds is not guaranteed and may be subject to early withdrawal fees and other costs which can significantly reduce or eliminate earned gains.
With Leveraged Planning, Mr. Cena structured a
funding strategy for his future income needs that
would net a lifetime savings of nearly 60% - $2,000,000
compared to using the traditional savings method.
Looking more closely at the program, Michael found there were several aspects of it that appealed to him in addition to there being no personal guarantee.
The program utilizes insurance products from highly rated insurance and annuity carriers that have been carefully examined by the lender to insure minimal risk for the client’s portfolio.
The program is secure for the lender, who relies on collateralization from both the insurance product and the business’ commitment.
The program utilizes principal protected, equity indexed insurance products that gain value when the markets increase, but do not lose value when the markets declined.
Lastly, the program provides for the return of funds put into it if Michael should have to terminate his participation early*.
In addition to the structural benefits of Leveraged Planning, Michael’s program was designed in such a way that the return of the principal was built into the loan payments. This meant that even paying back the loan and earning enough to fully fund his future income needs, Michael still ends up paying far less over the next 25 years than he would have if he went with the traditional savings option he was considering.
Michael chose the Leveraged Planning program. He made this choice because his future income needs would be met, he would be protected from downside loss in the markets and he would be able to put his business to work funding his future personal financial needs. The combination of these factors made Leveraged Planning the clear choice for Michael.
