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Revolutionize Your Firm's Business Solutions

Published by Summit Marketing Team on Oct 31, 2023 6:00:00 AM


The Modern CPA Success Show: Episode 103

Tom chats one-on-one with Alex Sonkin, the founder of Virtual Family Office Hub, an open platform offering the best-in-class resources and services in every specialty that a family office or leading CPA firm needs to serve and benefit their most affluent clients. Alex explains the concept of family offices and the challenges faced by CPAs in providing comprehensive advice. He introduces the Virtual Family Office model, which allows business owners to access global resources. Tom and Alex also discuss the importance of due diligence, independent peer review, and continuous improvement in tax planning.



intro (00:00:00) - Welcome to the Modern CPA Success Show, the podcast dedicated to helping accounting firms stay ahead of the curve. Our mission is to provide you with the latest and greatest insights on cutting edge tools, innovative marketing strategies, virtual CFO services and alternative billing methods. Join us as we change the way people think about accounting.

Tom (00:00:22) - Okay, for our listeners today, we have got a guess that I think people are going to be really excited after listening to him. Alex Sonkin talked about a variety of topics, but to me the big thing is just a different way of thinking about business and solving some problems, especially for small firms where the need for outside expertise can be helpful and getting additional process for getting lots of additional ideas to make a product better for our clients is really intriguing. He goes through some things pretty quickly, so I'll ask people to really stay engaged in the conversation that he goes through. But this was really exciting for me to have a chance to listen to. So I hope you really enjoy this episode.

Tom (00:01:06) - Welcome to the Modern Success Show. I will tell my listeners, one of the things I really love about hosting this podcast is when I come across a new idea and preparing. Interesting. I haven't even consider this before learning about it, wondering why we aren't doing more of this. And today's speaker and topic is very much around that. Alex Sonkin is the founder of three different companies, founder of Virtual Family Office Hub, Phat Pattern Analytics and the Virtual Family Office Academy, and also mentioned he's founded a company along with his wife. And we may talk a little bit about that. Alex, by way of introduction, I'd love to hear more about kind of your career path and how does someone go from being a derivatives trader on the Chicago exchange to a thought leader and company founder and founder and change agent? Kind of what's the story behind that?

Alex (00:01:52) - Yeah. You know, I graduated University of Michigan business school undergrad business school back in 94 and was able to back in the day, they used to have the floor trading opportunities in Chicago Board of Trade, the CBOE and think got a job they don't even exist anymore where they would you know for Soc Gen was my first job Societe Generale huge French bank and they would put me right on the floor in Chicago Board of Trade and taught me how to be a market maker and make markets which is like act like a casino.

Alex (00:02:25) - I'd buy these this option basket at this price tells you and this price and you know really we would have different groups operating at the CBOE at the Chicago Mercantile Exchange and the Chicago Board of Options, Chicago Board of Trade. And the goal there was to do arbitrage, meaning riskless trading by buy some similar options on one exchange and sell them almost simultaneously or simultaneously at another exchange to create a riskless profit. I thought that was really, really cool. It involved a lot of communication, a lot of math, a lot of knowledge. And along the way, I met tax attorneys and realized what they were doing was slow motion options trading, which is really looking at the tax code, working with CPA firms and helping their clients to reduce their taxes and charge fees. Interesting. And so to me, the idea of tax mitigation and going into the tax code was really a slow motion arbitrage things that we would do on the floor that we would only have three seconds to make a decision whether we wanted to do this or not because it would be gone in three seconds.

Alex (00:03:39) - You know, when we jump into the tax code, which is this enormous monster and try to do arbitrage there, we have a lot more than three seconds. But the challenge there is no one knows how no one knows how many pages are in the tax code. There seems to be this black hole. And and that was you know, and I'm also not a tax attorney or a CPA. So it took me many, many years to define an opportunity to be able to jump into that space and getting off the floor, moving to California, starting to build family offices, taking the knowledge that I had gathered from being an options trader, being, you know, working, you know, trading at the Chicago Board of Trade, Mark and the Cboe and trying to bring that to ultra high net worth families. I started working with CPA firms and law firms and realized that there's a huge disconnect out there, that the leading CPAs, the top CPA firms in the country, they just seem don't seem to know how many pages they're in the tax code, only 18% of them are able to help their Fortune 500 companies zero out their tax returns, meaning 82% of the most profitable companies in the world who have access to the best CPA firms and law firms in the world can't do what 18% are doing every year.

Alex (00:05:01) - And the same thing is happening with family offices. Okay, one out of five is tax efficient. 4 to 5 is completely not tax efficient. So we realize there's a huge disconnect. And then we figured out how to become that connection point and how to bridge that gap between the best firms in the country and then the best tax attorneys, the best specialists, the best resources out there that were developing tax strategies that were compliant with the tax code. It's just that the CPA firms didn't even know those strategies existed or those resources are amazing.

Tom (00:05:38) - So definitionally family Office, can you tell people just in case they're wondering or making up in their mind what a family offices.

Alex (00:05:45) - Yeah Family offices were traditionally designed for ultra high net worth families. Families worth, you know, $1 billion, $250 million because a family office, what it is, is a time saver and a confidence builder. You know, traditionally a business owner will call their CPA their. Mutual advisor. They'll call other professionals who are trying to sell them captives and ESOPs.

Alex (00:06:11) - They'll maybe they'll have a partner. Their partner will have a CPA, attorneys, advisors. And let's say this. This business owner is about to sell their company where they're about to sell a piece of real estate for that has a huge gain in it. What are the ways to mitigate the tax on the sale of that asset? You know, where we go, What are all the options out there? Well, it's very difficult to review all those options when your firm. Is spread so thin between, you know, here's another here's a tax deadline. Here's a tax deadline. Here's a tax deadline. How big is a tax code? Where do we find the best tax attorneys? You know, it's very, very difficult for CPAs to do this work. And what we realized is we really needed to bring an independent peer review model to those CPAs because it's very hard to find those resources. It's very hard to rip apart a tax code that's constantly changing. And what needed to be done was an intermediary group had to be involved, similar to kind of a Netflix or an Amazon, where we created an independent peer review model where hundreds and hundreds of independent CPA firms can introduce their favorite resources, favorite tax attorneys, and then have hundreds and hundreds of other independent CPA firms review those strategies, review those specialists, ask their questions, hopefully get their questions answered.

Alex (00:07:38) - And if not, maybe we throw the strategy out. And if we do get those questions answered, we're going to keep showing this to many other CPAs and attorneys who have at least 10,000, hopefully 50,000 hours of experience in audit and tax court to ask meaningful questions, hopefully get those questions answered, and then ultimately build a hierarchy of strategies based on their ROI, net of cost, net of risk. But the analysis and the all the heavy lifting has been done by by hopefully as many independent CPAs as possible, giving us independent data points, giving us truly independent due diligence, not groupthink, not just show us to one CPA firm and have them review it. We want to show this to us. Kind of like an Amazon and Netflix. We get a lot of confidence when we see 5000 reviews and 4.9 stars out of five. Well, that must be a great product or it must be a good book. We want the same kind of confidence and time savings, but we want to do it from.

Alex (00:08:42) - Having hundreds and hundreds of independent CPA firms reviewed. So going back so family office, sorry, a family office is really one point of contact where a business owner can call one person who's running their family office and they are going to have their CPAs, attorneys, everyone working together. And then the question becomes, are these really the very, very best people in the world? In my family office? Yeah. And so we've taken this traditional family office model and opened it up to an independent peer review. So instead of just being able to build a family office with local CPA firms, advisory firms, attorneys and specialists who want to be W-2 employees inside of a local family office, we now utilize this community to build out these virtual family offices built out like Lego pieces with Where's the best tax attorney in this specialty in the world live? Oh, they live in Aspen or they live in Miami and we're here in Indiana or we're here in California. That's okay. We can use technology to bring that resource right into our family office, get access to their expertise, make sure that our network of CPAs and attorneys, you know, review that strategy.

Alex (00:10:01) - And all of a sudden now we have access. Now we're using building blocks who are not just locally the best, but they're the best worldwide. And we could build out family offices virtually doing it that way. So family offices job is to save time, create confidence. And what we've done is we've taken that, you know, that standard family Office model and we've said, look, it's way better to do this virtually so we can have access to the very, very best resources in the world, not just the best resources locally available.

Tom (00:10:32) - Great idea. So just on the virtual side, if someone's a virtual family office, is it all one company or you're saying, no, I can create that family office to bring all these things together and it can be different companies that are agreeing to do that together, that right.

Alex (00:10:45) - We really believe in having it built out with different people. It's almost like building all star teams. And really we're building it all year and you see these football trophies behind me and use a lot of sports analogies.

Alex (00:10:59) - We're really building out teams, right? So we want to know ESOPs, who are the very, very best specialist in ESOPs captives, who are the best captive providers in the country. So we want to know who are community would vote on and say, who's the best in this area? So who's the best trumpet player? Who's the best clarinet player? So we have first chair, second chair, third chair, fourth chair in all these different positions. So let's just say we have a firm in Montana that has a client worth 100 million or 5 million or 10 billion, whatever the number is, they're selling an appreciated asset. They're going to buy a real estate portfolio. They want to know the most efficient way of doing this. And they also have a huge seven figure eight figure income tax issues. They want to retain their key employees, all these different things. This may involve multiple strategies. And so let's find the very, very best resource in the world to, number one, who can help them mitigate their income tax, capital gains tax problem the best.

Alex (00:12:05) - What are all those strategies? What's the ROI on each strategy and how much risk is involved with audit and tax court? That's a lot of knowledge that we need to have access to, and that's a lot of due diligence, right? So if we can keep adding and adding and adding to this due diligence knowledge base that we house in the Virtual Family Office hub inside the Due Diligence project, which is really what all these attorneys and CPAs are participating in, all that, that that continues to add and add to that information. Every time we bring design a strategy, there's going to be third party CPA firms, third party law firms that are reviewing that strategy, getting their questions hopefully answered or not. That's either adding to the it's it's always adding to the refinement of the due diligence of the strategy of the players involved. If there's negative feedback or questions that can't be answered, that's all important information to everyone involved. Until we can get that worked out. You know, the due diligence is really not complete.

Alex (00:13:11) - In fact, the due diligence is never complete because the tax code is constantly changing, as you know, and new ideas keep being developed. And so we really it's like, how would we know if someone in Virginia or Maine, an amazing tax attorney working with advisors and CPAs, have come up with something new and amazing, kind of like I you know, a lot of it's happening in Northern California. Well, what's the latest thing in. I don't know. I'm not I don't have a due diligence project. For. I have one for sophisticated tax planning. So we're because we're the biggest and we're the first and we have the largest independent peer review community of tax geeks in the world. We have seven, 800 firms participate in our global summits. They're virtual. We know that every year we're going to be introduced to five, six, seven new strategies, new resources. We're going to show those resources to our community. Sometimes they're going to throw rotten tomatoes at us and go, We hate this strategy.

Alex (00:14:12) - This is going to end up, but it's going to be an audit. This could be a tax court, maybe, and maybe they're right. Okay. And we're going to throw that out if they are right. But maybe we're going to just sit there for another few five minutes or a couple more meetings to make sure that this strategy, maybe it is cleaner than we think it is. So sophisticated tax planning and due diligence, as you know, is a very messy business. 

Tom (00:14:37) - Right. Right. 

Alex (00:14:39) - Hard conversations. We don't want the CPA firms and virtual family offices, clients there to see how messy it really is. We want to show them the end result. But it's like husbands and wives having difficult conversations, fighting over issues and then having unified front when it comes to how do we raise our children. So we want these difficult conversations. We want to get the cream, the very, very best strategies up to the top and figure out which ones are secondary and tertiary and so forth. And so this is our way of doing it, eating this elephant one bite at a time, and let's just have as many firms as possible introducing their favorite resources and then independently vetting out those resources.

Alex (00:15:22) - And that work never stops. And that's really what we're doing. And that eliminates, in our opinion, risk. It eliminates strategies that are risky, that are going to get us in trouble with audits or tax court. And it creates a lot of confidence because even when we deliver the notes to a new or virtual family office in our system, we know that they're not going to be able to complete the due diligence on this just by trusting us and trusting our notes. They're going to have to go back into the tax code, back in the reality, confer with their other trusted attorneys and CPAs that they know. Look at our notes, look at the tax code, look at the situation again. And then hopefully it all comes together for them and they're going to see, okay, I see the weakest part of the strategy. I see where the IRS could potentially attack the strategy and audit, and I could see how we could defend this. And now I have the confidence to bring it to my biggest clients.

Alex (00:16:18) - That's what we do. That's how much work is involved back there. And unless you're involved in this independent peer review, I don't know how independent CPA firms and law firms actually do due diligence without this type of peer review facility.

Tom (00:16:33) - Yeah, I have a feeling they don't do it and I'll be honest. So this is the this independent peer reviews. The big idea was reading. And when I first saw it, I thought of it from the lens that I've heard a lot of auditors talk about, which peer review is kind of a necessary evil for them. Right? It's something they have to go through. The more progressives are saying this is a great way for me to get better, the less progressives are saying, I just want to get through this with no markings and I really don't care what the learnings are. So I love the idea of doing that. And I also don't know, for a small office.

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Tom (00:17:45) - I'd love to hear an example of like how one actually goes through this. How does someone present it? Kind of what does it usually take to go through? If you're someone who has a great idea, who says, I want to introduce this to the peer review, how does that work?

Alex (00:17:58) - Look, you know, there we get our main websites, due diligence project. We also have Virtual Family Hub. So we have a very large network of, you know, CPA firms, advisors, attorneys. They realize that we're kind of the big the Amazon in this space.

Alex (00:18:20) - So they know that, hey, if they introduce a strategy to us and we like it, we introduce it to our hundreds and hundreds of friends and family offices, they're potentially going to be doing millions and millions of dollars of business with our CPAs and their clients who are millionaires, Santa, millionaires, multimillionaires, billionaires and so forth. So we're really the middleman and we represent hundreds of firms, family offices who represent. Thousands and thousands of ultra high net worth families and business owners, the kind of people that everyone wants to do business with in the financial service realm. And those people really are protected by their virtual family offices, their CPA firms that keep them from seeing strategies and ideas that potentially get them into trouble. So our thing is we started with sophisticated tax planning, due diligence, and not because Amazon started with books, but almost for the same reason, because Amazon started with books, because you can't put every single book in a Barnes and Noble, but you can put every single book title on Amazon.com.

Tom (00:19:29) - Sure. 

Alex (00:19:30) - Same way here. Um, how many pages are there in the tax code and how many strategies are there in the tax code? No one has any idea. It's like an infinite number, right? 

Tom (00:19:40) - Yes. 

Alex (00:19:41) - And so that's why we're like, well, how do we really even start to tackle this? It's like eating an elephant. Let's eat it. One bite at a time. But let's just let's get a bunch of tax geeks to be the ones chewing on the tax code as a bunch as opposed to. And what I mean by tax geek is they have to have at least 10,000 hours of experience in audit or tax court. Who is that? Those are primarily tax focused CPAs and a very tiny sliver of tax attorneys like. Right. Less than 1% outside of that community. Don't listen to anyone about tax planning. You know, financial advisors, estate planning attorneys know almost nothing about audit, about tax court, what happens in, you know, how high risk agents think about tax strategies.

Alex (00:20:32) - They seem to have a lot of opinions about it, but it's like I can have a lot of opinions about what happens on Jupiter. I've never been to Jupiter. Don't ask me about the temperature on Jupiter, what the climate's like. Is it windy? How do you dress? I've never been there, so I'm going to say I have no idea. Ask someone who has experience with Jupiter. Right? That's how we feel about sophisticated tax planning. Ask someone who has experience in audit, in tax court about this tax strategy. But that's just one data point. What if we asked 500 independent firms about this strategy? Do we need all 500 to agree that it's good or bad? No. But if you can get 50 or 100 firms to actually agree that a strategy is risky or not risky, that gives you a lot of information. And to get from zero to that point is a tremendous amount of work. And you're going to learn a lot just listening to how CPAs think and ask questions about sophisticated tax planning, because it's essentially like going to Jupiter and, you know, CPAs experience audit and tax court.

Alex (00:21:40) - And that's a world that most people have never, ever experienced and never will experience or want to experience.

Tom (00:21:47) - Yeah, yeah. And so I assume if someone's coming into this, they can also see what other strategies were put forward and learn from that besides just coming in, right? I've got something that looks like something that was reviewed before. Can I learn from that before just throwing out the same thing that's been reviewed previously, Is that right?

Alex (00:22:05) - Absolutely And we you know, we've become a tremendous you know, when we first started doing this, like was it 15 years ago, we were very we didn't even know we were building. Right. And most great companies, when they first start, they're built, they're doing something else. And then they find something like, wait a minute, we got a we got to shift a little bit. We had no idea when we first started how much this was needed at the CPA level. Just we had no idea how spread thin CPA firms really were. And when we realized that this is not just a want, but an absolute must have need.

Alex (00:22:45) - And like you said, when we meet new CPA firms, they're like, we had no idea this was even available. Yeah. And the fact that it's available, the fact that we have access to it is incredible. And yes, you're absolutely right. The strategies that we're finding, the things that we're finding are absolute gold. We try not to lead with the strategies we lead with here. We have this independent peer review, but what we really have, we have the best tax elimination strategies, cost elimination strategies. We're able to save people 20 to 60% on their health insurance. We have a health insurance solution that is used by Amazon and Fedex and Grant Cardone companies. You know, Cliff and Larsen Allen's been successfully selling this for over a decade. 99.9% of other firms don't even realize this was existing. Yeah, and this is a health insurance solution built by a former CPA firm that decided that health insurance was done inefficiently. And guess what? They decided that health insurance made health insurance companies very, very rich.

Alex (00:23:55) - Who doesn't believe that? Everyone knows that health insurance makes insurance companies really rich and it's not necessarily a great product for the business owner. What's the alternative? Setting up a captive and running your own captive and running your own health insurance company. Meaning you have to go develop relationships with all the hospitals and all the networks. Figure out a claims process that works. It's like, wait a minute, I already run a company. I don't need to run another health insurance company that I have zero experience running. Yes. So what we found is we found this you know, we have the top captive provider in the country, but they do many, many different types of captive insurance companies. And we found this one. All they do is insurance. Health insurance. That's all they do. They. And instead of you setting up your own captive, you can actually partner with them. And when you pay premiums and you don't eat up all those premiums and claims, they return your premiums to you. Traditional insurance just keeps the they just keep those premiums and they keep that as profit.

Alex (00:25:00) - This the premiums go back to the business owner as if the business owner set up their own captives. A true partnership. Okay. The claims process is more efficient. They treat you like a true partner, and they've eliminated all the brokers and middlemen, administrative costs, which takes up much of much of the premiums and efficiency anyway. And they share those cost savings with the business owner. So now we've opened this up. We've allowed our firms to jump into our health insurance pool and enjoy all this without setting up their own captives. And their business owners now get a chance to access this as well. So we're doing stuff now. We're going outside of sophisticated tax planning, massive cost reduction strategies. We have a lot of really, really cool tax strategies and of course we have access to other family office co-investment opportunities with real estate development. You know, we have access to family offices that run super high end crypto venture funds that you can't get access to unless you really knew that family. So really, really some really high end opportunities.

Alex (00:26:08) - But again, we focus on sophisticated tax planning, income tax planning, and that's really where we differentiate ourselves from everyone else, because that's where most CPA firms, law firms, advisory firms are not very good at income tax mitigation. They kind of start an estate planning, asset protection, asset management, money management. They're good there. But how do we eliminate tax on income or sale of highly appreciated assets? That's really where our community is really, truly created a niche and differentiated ourselves from all the others.

Tom (00:26:42) - Yeah, the problem that I see that it looks like you're solving very well. As for the smaller firms and probably even upwards to 50 or 100 in an accounting firm, one of the real challenge is finding expertise. And if you're smaller than that, if you're a ten person firm, you're saying, you know, you mentioned Esop earlier. If someone wants that, well, then I have to become an expert in that. And then I have to say, well, I can get you so far, but there's a lawyer who has to be involved or maybe insurance and things like that.

Tom (00:27:07) - And you helping solve that problem for people just seems huge to say, I can tap into those kinds of resources and ultimately give so much better service or better solutions to the clients that are out there, because I can leverage what that is. Is that a fair.

Alex (00:27:23) - Yeah, you know, because even let's say you let's just say you found a competent specialist who's really good at who's got a great strategy. What are the how are they going to treat your clients? You know, what's the experience like if they're truly the best? Maybe their ego is so big you can't even fit anyone else in that room. Yeah, and they may try to steal your client away from you and all of a sudden all the referrals go to them. So now the CPA or the family office is going, Do I really want to refer my biggest client to this particular organization that's going to create risk and problems for me? So the due diligence is not just on the strategy, it's on the actual players involved. Who are these people? How do they play nicely in the same sandbox? And the other thing that we like, we really position ourselves because we really act as the client.

Alex (00:28:17) - So these these resources come in and if they were just to work with a single CPA firm, they could just overwhelm them, do the work, get all the referrals and maybe just screw the CPA from just steal the client. When they go through our network, they can't do that because they would make that CPA from very unhappy and I would get phone calls and then would be very unhappy. And then all of a sudden that resource not would that would basically eliminate themselves from ever working with our network of hundreds and hundreds of independent family offices, which is basically like just slitting their own throat, eliminating the future ability to make any revenue from our network and then what's even potentially worse is their name gets start being tossed around in our community as a bad player. Yeah, it's like the worst thing you can possibly do. Come in, start working with our CPA firms and then make your reputation so bad that people want to start talking about you as, Hey, whatever you do, don't work with XYZ firm because this is my experience with them.

Alex (00:29:24) - And CPAs like to talk, right? So the due diligence is really something that really protects every CPA firm and their clients away from these bad experiences. And the good news is, is we were we're meeting so many people, so many players, it really forces every single entity to bring their very, very best. They have to impress us and they have to impress us every time. Every single time, because one, you know, one bad. That experience. One person's upset and they start talking. That news travels very, very quickly and everyone runs away from that kind of risk.

Tom (00:30:06) - Yeah, yeah. Your Amazon and Netflix examples think of the one star ratings and if someone reads that and it looks like it's credible, they're not just a complainer that carries a lot of weight. I know myself, I've read, you know, oh, ten, 15, good stars. And then you read one, you're like, oh, this seems to be that seems like it was a really painful experience.

Alex (00:30:24) - And on the flip on the flip side, in the financial service realm, here's what we've noticed. What we've noticed is a lot of this work is done in closed silos, right? In the financial service realm, financial advisors, attorneys, they don't want you to look at what their competing advisory firms or law firms are doing. So like Goldman Sachs is not sitting there going, let me show you what Morgan Stanley and JP Morgan are doing. Sure. No, we're Goldman Sachs. We have the best stuff just just in our back room. We got the best stuff just focused on Goldman Sachs. They're not showing you what their competition is doing. They don't even want you to know. So it's really like a closed silo environment. And what we're doing is we're just blowing that up going, no, no, no, let's open this up. Let's make this open source peer review, right? Let's bring everyone else in here. And that rattles people, right? Because if you're very comfortable operating in this closed silo, hey, let's just tell our clients this is the best.

Alex (00:31:20) - Don't look over there. And oh, by the way, if they show you something, we're going to tell you it's really, really bad, right? In our model, if you try to operate like that, you're going to be found out. Yeah, you're going to be found out. As someone who's going counterintuitive, you're literally trying to protect the client from information. You're doing the opposite. So let's be confident. Let's do. If you really have the best stuff, let's put it out there. Let's. It's like an open tournament. If you have the best team, come play in our tournament and see if you really have the best team. And maybe you can come home with a big trophy. You know, don't be like, no, no, no. They can't come to the tournament. They can't come to the tournament. I'm going to be the only one at the tournament and I'm the best. Yeah, that's really the old school financial services industry. And we're saying that's not how, that's not how the client wants it anymore.

Alex (00:32:17) - And what they really want is they want the Amazon and Netflix experience. They really want the whole universal experience and they want it to be independent, peer reviewed, and they want the best of the best of the best. And now for the first time, the Due Diligence project, the Virtual Family Office Hub, is doing that in the financial service realm and bring this incredible value. And that's why we're running circles around our competition. We really don't have any competition. No one else is doing this.

Tom (00:32:45) - Yeah, and think of that. Your example with Goldman Sachs. Think of from the client perspective, and I can only imagine a very high net worth person wants to get multiple perspectives. And if they go to Goldman and then say they go to Merrill and they end up with this very divergent plans with two really confident people and using terms that I don't understand. And I walk out saying, I don't know which one of these to do. And the idea that a ton of people have looked at it and this is what I'm seeing, and I assume that when you're presenting to clients, they often know that this independent due diligence has been done on their plan.

Tom (00:33:20) - Is that true?

Alex (00:33:20) - What's interesting is that there's a lot of players. So I come from the option trading world, right? And so when you come in a lot of finance, finance degree, all this stuff. And there's a lot of people with finance degrees and maybe trading, you know, experience, maybe not options trading, but just futures and stock trading experience in the financial services space. The part that really differentiates the players in the financial service space is, is the knowledge of the tax code. It's kind of like the engineering students who are in the financial world or in the engineering people who have like masters in engineering. Not a lot of people have masters and engineering degrees. It's like that's a lot of that's a lot of knowledge. It's a lot of work. I just rather go and sell something, right. Same thing in the financial service realm. It's like there's a lot of people know how to buy and sell stock or recommend this and think that's a good investment.

Alex (00:34:17) - But very few people have a CPA license or have experienced an audit, have experience in tax court. That's a very specialized knowledge. And those are the kind of people that are not necessarily going there to be make as much money as possible. I want to make, you know, super aggressive, you know, risk takers put my clients in risky situations. And those are the people that I believe, you know, the CPA is who we've identified as the entity that we should build this virtual family office underneath, not under stockbrokers, money managers, financial advisors, attorneys. It's, in our opinion, the tax focused CPA who should be leading these virtual family offices, helping their high net worth clients keep as much wealth as possible. Because in our opinion, these breadwinners, the matriarchs and patriarchs, the leaders of these families who create the wealth, they don't really need an advisor to help them create more wealth. They really need an advisor who can keep help them keep their wealth. And in our opinion, that is a tax focused person that should be their CPA plugged into a network of best in class peer reviewed resources.

Alex (00:35:32) - And and then, of course, some of those resources could be the very, very best highest rated money managers, estate planning attorneys, financial advisors. Those are, in our opinion, more commodity guys than the elite tax advisor because their lead tax advisor just has to have a lot more knowledge of the tax code of what happens in audit tax court, really constantly changing laws and things like that. And those are the areas where the business owner really has no clue unless their CPA that came from that space, which most likely have not. If not.

Tom (00:36:09) - Yeah. So people listening want to learn more, possibly connect with you. They're saying, I think I fit this kind of category. What would your suggestion be for really kind of.

Alex (00:36:20) - Really what you want to do is you want to if you are looking for an elite CPA, you know what? Number one, if you've got a great CPA, introduce them to the Due Diligence project, the Virtual Family Office Hub Due Diligence project. If your CPA is just not someone you want to work with anymore, you can reach out to us.

Alex (00:36:40) - Due Diligence Project Info. A due diligence project. And we have hundreds of firms all across the country and every city, every network in the country. And we can just introduce you to one or 2 or 3 of them, and you can choose the right personality that's right for you and know that you have an incredibly competent resource that's plugged into this independent peer review structure.

Tom (00:37:02) - Okay. And if you are a CPA, then you may say might want to join this kind of a group.

Alex (00:37:07) - You I highly encourage you to look at what we're doing. You know, we have CPAs that have are generating well over seven figures of revenue, additional income because they've plugged into our network and they're now bringing massive, massive cost savings, tax savings, incredible value to our clients. This is not a marketing program. This is not just, hey, we're part of this, part of this, part of this, and that's why you should do this is real tactical, real value, real due diligence, um, real differentiation between the members that we have in our network and the biggest, most profitable CPA firms and law firms in the country.

Alex (00:37:52) - Our CPAs and attorneys are running circles around their competition because of this unfair advantage in being able to plug into this, uh, due diligence network.

Tom (00:38:02) - Yeah. Okay. I've been staring at your trophies the whole time at this. Let's shift a little bit away. Can you tell us a little bit about so I can see three different football trophies? Maybe I'm missing one in there. You want to tell me?

Alex (00:38:13) - So I've got two boys and my boys rooms are filled with all these little plastic trophies that we value so greatly. So I've been coaching now Coach, 24 seasons of flag football here in Southern California.

Tom (00:38:26) - Wow. Okay.

Alex (00:38:28) - And it's nine years, so I'm not so so sometimes it's like four seasons a year. Two of my older son, two of my younger son, but I'm almost retired now. So the two big ones back here, the big one is a San Diego Super Bowl trophy. So we won all of San Diego County top flag football team when my older son was a sixth grader.

Alex (00:38:50) - This the one next to it we just picked up a couple days ago. We finished second in the state of California with my little my little sixth graders that I've been coaching since kindergarten. And the in this trophy behind me up the smaller one behind.

Tom (00:39:06) - Yep here you got it.

Alex (00:39:07) - Is another is another. Uh, kind of all California tournament. When my sixth graders were second graders, we won this big holiday bowl tournament, which is kind of an all California. So, um. It's, you know, coaching these little kids. It's the same thing for me as coaching my CPAs and family offices. It's all about winning. It's all about having fun. But really the key is we really try to find the best athletes, the best work with the very, very best. And when we find the best, we can support them the best way we can. And then all of a sudden I get to put trophies in my trophy case.

Tom (00:39:47) - So that's really exciting. That's cool. I can tell you, thinking of University of Michigan, so thinking Big Ten, I went to Purdue undergrad and then Indiana for graduate school.

Tom (00:39:58) - Michigan, I have a my middle daughter got her master's degree at Michigan. She is a not a sports fan and had told me at one point she was dating a guy who took her to one to the big house, to the Michigan football game, and she said, we were sitting somewhere like this, I don't know, seventh or eighth row between the 40 yard lines. I'm like, really? She goes, Yeah, didn't care very much. And I'm thinking, this poor guy who put out huge amounts of money to give her this great experience, she's like, Yeah, it just seemed like a crowded day and things like that. And I said, Oh, I think you missed a really cool experience at Michigan's one of those places.

Alex (00:40:28) - Well, what's interesting about what you just said, I used when I was an options trader in one of the firms in Chicago we actually recruited at University of Indiana's business.

Tom (00:40:38) - Oh, did you?

Alex (00:40:39) - So I remember taking that trip was a lot of fun.

Alex (00:40:42) - The other thing, the connection we have is Drew Brees is out here and the small trophy right here, one of the players on my team also plays on Drew's team. And of course, I have to mention that my little team is two and zero against Drew Brees team. But what's really cool is I'm trying to I'm trying to recruit players. The Drew's recruiting, Drew's taking these kids on private plane trips to New Orleans Saints game like going here. Let me introduce you to the team. And we're like, okay, well, that's hard for us to compete with that, right?

Tom (00:41:17) - It sounds like you do compete, though. So is he actually a flag football coach? Yeah

Alex (00:41:22) - Somehow we're able to offer him something that's competitive, but it's a huge sport out here. It's getting bigger and bigger and bigger. It's going to be an Olympic sport. And looking back, you know, some of these kids that I've coached with my son now, my older son is a junior in high school and I haven't coached him since sixth, seventh grade.

Alex (00:41:42) - But it's really fun to watch these kids develop. And, you know, I've got relationships with some of these kids that was coaching years ago and now it's like we talk like man to man, and they're like, Oh, man, that was so much fun winning all those trophies and all that.

Tom (00:41:57) - Love that.

Alex (00:41:58) - Because when they get older, it's like real life starts to kick in, you know? And how much fun is it to be third, fourth, fifth, sixth grader just going out there on a really good team and just rolling out there knowing there's a good probability we're going to win some football games and then winning some games together as a team. It is so much fun. And you could see I could talk about the flag football stuff for four hours.

Tom (00:42:22) - I love it. Well, and I'm sure you've heard the stories as they think of like what they learned when they were younger about things like teamwork and hard work. I'm sure much of it goes back to these kind of team sports.

Tom (00:42:33) - What a group.

Alex (00:42:34) - That the parents allow me to coach these kids. My wife is constantly going up and down the sideline apologizing. The other parents. I'm so sorry that my husband's yelling at your kids and this and all the other parents love it. You know, everyone's competitive. Boys need to be yelled at a little bit. They need some hard coaching. They appreciate it. And, you know, that's how you win. It's how you win these trophies. You know, look, we're from the Midwest. Yes. And, you know, and I'm an old guy. And so the way we were coached in football back years ago, there was only one way of doing it. It was hardcore coaching. And so bringing that here to Southern California, maybe there are a lot of these people aren't ready for it, but that's what we bring. And a lot of the parents, they're ready for it and they want their kids to go through that process.

Tom (00:43:24) - I love it.

Tom (00:43:24) - I love it. It maybe in closing, so Alex, do you want to remind people your podcast that you have and then any other particular things about ways people can stay in touch and keep up with what you're doing?

Alex (00:43:36) - Yeah, well, you know, we have we've recorded a bunch of really cool podcasts so you can learn about us. You can go again at duediligenceproject.com We have a podcast page where we interview some of our resources. We're able to interview, uh, you know, the largest family office club leader in the country. You know, we're partnering with some really, really cool organizations. And so due diligence project that comes a great place for you to review what we do. And if you're interested, reach out to us at info@duediligenceproject.com.

Tom (00:44:05) - That sounds great. Well, thank you for spending time with us. This didn't disappoint. Like I said, I read kind of a little bit in Vance and said, Wow, this is a totally new idea and love the learning and the application.

Tom (00:44:16) - It's just such a cool thing that you've gotten built. Thank you so much.

Alex (00:44:20) - Thank you. I really appreciate feedback. It's been a pleasure to be on the show.

Tom (00:44:23) - It's great.

Alex (00:44:26) - Good. Awesome.

Tom (00:44:29) - Thank you. Like I could have gone on forever. Thank you.

outro (00:44:34) - Enjoy this podcast. Visit our website summitcpa.net to get more tips and strategy for achieving modern CPA firm success. We are here to be a resource in this ever changing industry.


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