Putting all the financial 'eggs' in one basket.

• Author: McConnell, Michael D.
• Position: PRIVATE COMPANIES

If "closely held" sounds personal, it is. As many readers know, closely held businesses are closely held by design--the owners have good reasons for keeping their companies private and ownership in the family. This doesn't make them free of complex issues and decision-making scenarios.

If anything, private company owners must navigate fairly narrow channels when it comes to making decisions that affect not only the business but also the people with whom they spend their holidays and who they name in their wills.

One of the biggest issues private company owners face is the necessity for financial services in business and personal matters. Even though business and personal accounts may be separate, the wealth of the individuals connected to the closely held business depends on the success of the business, as well as investment strategies across the board.

There are many elements that play a major role in both business and personal success--asset management, tax planning, retirement, financial and estate planning, risk management, insurance and business succession. They are all key pieces in the financial planning equation.

While some private business owners have sound reasons for seeking financial services from several different providers--especially when some financial services professionals can be partial to certain products--more private company owners are moving toward single-source resources.

Too Many Baskets Aren't Always a Plus

For the most part, financial, business, tax, compensation, succession and insurance advisers are extremely well-informed. Even so, no one individual can be as up to date on the complex issues surrounding all these topics as a specialist who has a depth of knowledge in one or two of these areas.

So what's a business owner to do? Many closely held business partners are finding a single-source adviser to be the best option for their companies and their families. The demand for advisory firms that employ highly knowledgeable specialists and also provide a wide range of services is increasing as business and personal financial services become ever more complex.

Seeking services from one provider has its advantages:

* Personal and business decisions reflect each other rather than contradict each other--a business upswing and triplets entering Ivy League schools in the same year, for instance, may impact decision-making on several levels.

* Objective advisers who serve on a dedicated team and who are not compensated...