Success Stories

We at Financial Brokerage Services have many clients who benefited from the close consultation that we provide day in and day out.

Kit Arbo on Employee Benefit Plans:

In 1985 I worked on the estate plan of a client who was a very successful entrepreneur who liked to start companies and then flip them and keep shares. The business he was developing had 9 employees. He wanted to establish an employee benefit program, so I set everything up – medical, dental, vision, short and long term disability, life insurance and a 401(k) Plan.His company’s business model involved developing a database of video games that people could download through a modem and rent and play on their TV with an Atari and joysticks (in the mid 1980’s games like Pong cost $75 -$150 to buy). Since the modem speeds were slow (it would take 15 minutes to download), my client struck a deal with local retailers to advertise on its service: Domino’s Pizza delivers, don’t forget a Hallmark card for Mother’s Day, etc. My client’s business model had 3 sources of revenue; rental fees, advertisements, and a percentage of the long distance telephone charges people incurred when their modems called the database. Soon the long distance telephone charges got too expensive for gamers who played for hours, so my client looked for cheaper ways to deliver the rental games. My client eventually ditched the gaming platform and started an Internet community that eventually grew into America Online (AOL).

I handled all of AOL’s employee benefits and retirement plan for 25 years as the company grew from 9 employees to 60,000 when it merged with Time Warner.  Along the way I helped assimilate into AOL’s benefit programs the employees of such notable companies as Netscape, CompuServe and MapQuest as well as dozens of smaller dot.coms that AOL acquired. In 2000, I was a member of the team that merged the 401(k) Plans of Netscape and AOL – a $250,000,000 transaction during the heyday of the Y2K technology concerns – all without a hitch.


Kit Arbo on Complex Business Owner Succession/Estate Planning and Employee Benefits Client:

In 1988, a father and his three children, who owned a retail jewelry store, started working with FBS, the family lawyer and their accountant on a complex, inter-generational succession plan as well as estate plans for all four.  After many years of work the end result was:

  • A seamless transition plan for the father to sell his shares of stock to the three children while he was alive but continue working as the CEO at full salary and benefits
  • The father formed a Family Limited Partnership which had a building built to house their largest retail store
  • The three siblings formed an LLC and bought the land upon which the building was built by their father’s FLP; the FLP signed a Ground Lease to use the land
  • All family members created Generation Skipping Trusts and contributed various assets, including stock in the retail business and shares of the LLC which owned the land upon which the father’s FLP built the building

The family accomplished all of its goals, and financially they are positioned to benefit multiple generations as follows:

  • The retail store pays rent to the building owner – the father’s FLP.
  • The father’s FLP: a) uses some of the rent to pay the mortgage on the building, b) keeps some of the money for profit and c) pays to the children’s LLC money for the ground lease. Once the mortgage is paid off there will be more money kept as profit re: retirement income.
  • The children’s LLC uses part of the Group Lease payment to pay the mortgage and keeps the balance as profit. Once the mortgage is paid off, 100% of the Ground Lease fee will be profit and accumulated for retirement income.
  • Each family member’s GST uses part of the excess cash flow to purchase permanent life insurance worth millions of dollars. Upon their respective deaths the combined GST assets and death benefits will create a “Family Bank” that will last for 100 years.