Handing the Investment Keys to Auto Dealers

Automotive dealers know that Financing & Insurance (F&I) is one of their most important revenue streams — driven in particular by the sales of extended service contracts and warranties. The challenge is that generally, this revenue is taxed as ordinary income.

Fortunately, Darnall Sikes Wealth Partners offers a better, more tax-aware solution: having the warranty revenue flow into the dealer’s own reinsurance company (an arrangement also known as dealer reinsurance), where required reserves could be invested in accordance with a trustee-provided Investment Policy Statement. Once the premiums are earned out, a surplus account can be formed which provides greater investment flexibility to the dealer as trustee.

Greater Flexibility, Without the Hassle

Not all reinsurance investment programs are created equal. At Darnall Sikes, we’ve custom-built our offering to give auto dealers the ideal combination of flexibility and hassle-free management. In the process, we help you plan and manage your warranty cash flow to meet your long-term wealth goals.

Who Benefits from Our Reinsurance Solutions?

We provide powerful options and benefits to both dealers and their agents:

  • Dealers — We currently work with more than 275 automobile dealers nationwide, helping them maintain their premium reserves in dedicated accounts. Unlike some other reinsurance investment programs, we proactively consult with our reinsurance clients to plan for their cash flow needs and long-term wealth accumulation goals while considering tax implications.
  • Independent Agents — We help you manage your auto dealer customers’ investments in their reinsurance companies. We’ve been helping agents and dealers like you in this way for nearly a decade and have expertise in this unique niche. Our experience allows us to offer you expedited services and responsiveness so you in turn can provide excellent service to your dealers. You also get an experienced reinsurance specialty team that will provide a timely service experience, an efficient process for managing company assets, and the holistic financial advice you deserve with none of the hassle.

Exceptional Services

When you work with the Darnall Sikes Wealth Partners reinsurance team, you benefit from the operational efficiencies and processes of Avantax, our broker dealer and premier partner to professional CPA wealth management firms across the United States. Avantax, with over $76 billion* in assets under administration, employs approximately 300 experienced financial professionals in its Dallas, Texas headquarters and delivers industry-leading technology resources to its partners. This allows for expedited document processing and account opening.

Darnall Sikes Wealth Partners works hard to achieve our reinsurance program service-level goals:

  • Account set-up within 24 hours of receiving signed paperwork
  • Credentialed, independent reinsurance specialists who serve only your interests
  • 24/7 online account access and performance reporting
  • High-quality, responsive service for dealers and their agents
  • A comprehensive suite of wealth management services including financial planning, legacy planning, retirement, insurance and much more

Talk to the Reinsurance Authorities

Our experience in doing business with reinsurance companies allows us to provide dealers with institutional-quality, tax-optimized solutions for managing the assets within their reinsurance companies. To learn more, please contact us.

*value as of December 31, 2020