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.
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.
We provide powerful options and benefits to both dealers and their agents:
When you work with the Darnall Sikes Wealth Partners reinsurance team, you benefit from the operational efficiencies and processes of 1st Global, our broker dealer and premier partner to professional CPA wealth management firms across the United States. 1st Global, with over $27 billion* in assets under advisement employs approximately 200 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:
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 June 30, 2018