1. Establishing a Family Office Credit
Initiative
Expanding High Net Worth Client Credit Revenue
By:
Mark S. Johnson
404.909.5167
markstephenjohnson@comcast.net

2. The Opportunity
• Typically, HNW and UHNW clients and their advisors don’t include the use of credit as part of
their financial solution
• These clients are involved daily in financial activities that require the use of cash, future cash
flow and potentially, asset liquidations
• Alternatively, these clients can enjoy significant and measureable Economic Benefit through
the use of a completely customized Strategic Credit Solution
Non-Bank affiliated RIA and Multi Family Office providers are searching for a
stable and creative credit provider with which to align
Banks seeking very low risk expansion of their credit portfolio can gain
significant and long term net interest income increases through establishing
strategic partnerships with Multi Family Office and Registered Investment
Advisory (RIAs) providers
A Family Office Credit Initiative
HWN clients - $3,000,000 or more in liquid investment assets
UHNW clients - $25,000,000 or more in liquid investment assets
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3. RIA Firms
• 2,280 NEW RIA firms were established in the
US over the last 12 months
• As of May 2014 there were 31,739 actively
registered RIA firms in the US.
Most RIA firms are NOT owned by or
affiliated with Commercial Banks
Each RIA represents a strategic partnership
opportunity for a Family Office Credit Initiative
Source: RIA in a Box
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4. Success in this Endeavor Requires A Unique
Leadership Profile
Credit Production Skills
CreditStructuringSkills
Loss Prevention
RevenueProduction
Typical
Credit
Officer
Typical
PWM
Sales
Leader
Extensive sales
leadership
background
combined with
extraordinary
credit skills
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5. Increasing Profitable Low Risk
Capital Deployment
Typical Bank
Lending Markets
* Commercial Banking
*Commercial RE
* Institutional Non-Profit
* Proprietary Private
Banking
Additional Profitable
Lending Market
* Private Lending-
Family Office Clients
*Non-Bank
Multi-Family
Offices
*Investment Only
Providers
(Local, regional and
national clients)
$$$$$$$$$$$
$$$$$$$$$$$
$$$$$$$$$$$
$$$$$$$$$$$
Future Active
Lending Markets
• Commercial
Banking
• Institutional
Non-Profit
Banking
• Private Banking
• Family Office
Private
Lending
$$
$
$$$$
Loan Funding Sources
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6. Extraordinary Bank Credit Revenue Generation
Through Strategic Partnership with Non-Bank Private Wealth Service
Providers
Four Key Concepts
Observation of Client Financial Behaviors by their Advisors
Credit Strategy Design that is Complimentary to Family Planning
Strategies Employed
Delivering Credit Strategy that Provides Economic Benefit that can be
Measured
Ongoing Bank Management reinforcement of the first
three within the Outside Advisor Community
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7. “Observable Financial Behaviors”
Front line advisor recognition and understanding of this concept is key to credit
extraordinary production and growth
Private Wealth clients’ pervasive belief:
“I'm rich and liquid, why would I borrow money”
Showing Them an Alternate Route to their Original Financial Solution that Provides
“Quantifiable Economic Benefit” (QEB)
Through the use of Strategic Credit is the
Key
Traditional Approach
Alternative Routes
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8. Re-action vs. Pro-action
In the Private Space,
Advisors are often
focused on fee income
and they often only react
to “client defined” credit
needs
Advisors can produce
extraordinary results by
expanding that focus to
include generation of net
interest revenue by
“creating” client needs
Extraordinary credit revenue growth is available in opening or expanding this market of the underserved
clients of “Family Office” and “Investment Management” only firms. Helping their Advisors to first
recognize there is one and then helping them :
to the client’s originally defined financial solution is the key
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9. What am I talking about?
Left on their own high Net Worth clients will almost always use
cash or liquidate investment assets to fund these activities
Liquidating AUM to fund a variety
of activities where QEB can be
derived through a “Strategic Credit
Structure”
Transferring less than maximum
potential value when using GRATs
Using long term mortgages to fund
typically shorter term residential
purchases
Losing the step up in basis when
gifting assets
Funding high dollar life insurance
policy premiums through cash flow
or AUM liquidation or borrowing
within their policies
Funding for their Family Bank with
AUM or cash Transfers
All of theses typical “high net worth” client behaviors lead to
unnecessary client AUM or client cash flow reductions. QEB can be
provided to the client through a Strategic Credit structure in each case 9

10. High Net Worth Client
Credit Revenue Sources
~70%
Increasing
Family Advisors
Recognition
That a Credit Strategy
Could Provide QEB
(Family Bank Funding, High $ Insurance Policy Funding,
Support for Gifting Strategies, Support for Private Investment Activity)
~30% Client Realization of Credit Needs
(typically residential mortgages, smaller consumer oriented credit lines
and asset purchase loans)
Whatever a bank’s current private wealth client credit revenue level it can more than double with
the establishment of strategic partnerships with non bank Family Office Providers
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11. Characteristics of the Leader You Choose
To continue the discussion please contact me
(404.909.5167)
The
development
of additional
net credit
spread
revenue by
opening a new
high net worth
and ultra-high
net worth
market will
drive
extraordinary
profits
Extraordinary
Private Client
Revenue Gains
Strong Family Office &
Investment
Management
Community Contacts
Years of
formulating
credit
structures to
provide
typically
unthought-of
of alternative
credit
solutions to
HNW and Ultra
HNW client
financial
behaviors
Deep knowledge
of Creative
Strategic Credit
Alternatives
Years of
observing the
financial lives
of High Net
Worth (HNW)
and Ultra HNW
clients
Keen Observation
of Private Client
Behaviors
Years of
experience
structuring
and selling
credit facilities
to
complement
the planning
and entity
strategies of
HNW and Ultra
HNW clients
Deep Private Client
Entity Structural
Understanding
Years
experience in
the Private
Lending
market
Deep Credit
Structuring and
Underwriting Skills
Multiple contacts
within the
Family Office and
Non-Bank
affiliated
Investment
Management
community
to serve as
the initial prospects
to take advantage of
the stable and
creative lending
platform
the bank can offer
their clients
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