• Why Most Farmers Need a Financial Planner

    by Matt Roberts MFM CFP® CAP® Chief Planning Officer | March 24, 2022

    farming family generations

    In Iowa, we are surrounded by some of the best and most valuable farmland in the world. Last October, according to agweb.com, land in Johnson County sold for $26,000 per acre!

    Farms have been passed down through multiple generations and are part of the heritage of many families whether they still live on or off the farm. This could change in the future as the average age of a farmer in the U.S. is 57 according to the USDA’s 2017 Census of Agriculture. There simply aren’t enough new farmers.

    Family farms are dwindling, as more and more farms are being purchased by commercial farming operations or investors. This consolidation threatens the future of the family farm. As a result, we are seeing more demand from farmers to learn about effective ways to pass their farm on to the next generation.

    Most farmers have an attorney, CPA, and insurance agent, but they rarely have a financial planner. I believe the main reason they don’t is because most financial planners don’t know how to apply their services when the client has financial complexity beyond traditional investments (stocks, bonds, ETFs, mutual funds, etc.). Farmers have land, equipment, buildings, livestock, grain, etc., not just “Assets Under Management” or AUM as we say in advisor lingo.

    At Syverson Strege, we take farmers and business owners through a unique process by helping them assemble a “Collaborative Team.” This includes the attorney, CPA, and other critical members of the client’s team along with a financial planner serving as the quarterback.

    The Collaborative Team’s job is to understand the client’s goals, values, and dreams and then present a unified financial plan to the client. Check out our video for a deeper understanding of how a collaborative team can help. 

    The Collaborative Team will go through all areas of the financial plan together, which includes cash flow & tax planning, retirement planning, estate planning, risk management, and philanthropic planning if applicable.

    To be more specific, here are seven reasons why farmers might need a financial planner as part of their team:

    1. Prepare the farming operation to provide income in retirement.
    2. Help the next generation integrate into the management and ownership of the  
    3. Ensure an appropriate estate plan is in place that will help provide family 
    4. Address the “what if” scenarios (long-term care, disability, premature death, etc.).
    5. Find ways to mitigate taxes from the sale of land, equipment, grain, or other ag commodities.
    6. Make sure that highly valuable assets have liability protection.
    7. Provide benefits to employees.

    Once the farmer’s unique needs are identified, it’s all about finding and implementing solutions. It could be establishing a charitable trust to provide income and avoid taxes or redesigning the organizational structure of the business.

    Whatever the solutions are that fit the client’s situation, this is where having a Collaborative Team can pay dividends. Since there is already buy-in from all members of the team about the direction of the financial plan, it can accelerate the pace of getting results and reduce opposition from members of the team.

    In many cases, the reason collaboration doesn’t happen is because the team lacks a leader. A financial planner can serve in that role. The benefits of having a financial plan in place are numerous, but perhaps the most important benefit is that it can help the next generation understand and be confident of their path to operating and owning the farm in the future.

    We truly understand farmers and their unique situations. Syverson Strege is privileged and honored to provide service to many clients who are farmers!

    If you, or anyone you know, wants to learn more about how Syverson Strege helps farmers and business owners, please give me a call at 515-225-6000. Or call to schedule a no-obligation, confidential, complimentary consultation.

    Photo courtesy of Becky Ochsner Photography

    Matt Roberts MFM CFP® CAP® Chief Planning Officer
    Matt Roberts is the Chief Planning Officer at Syverson Strege and a CERTIFIED FINANCIAL PLANNER™ practitioner. He is committed to serving others to enrich and empower their lives. His primary focus is to ensure clients maximize what they desire from their money and reach their personal and financial goals. Matt also leads the firm’s Planning Committee which is responsible for the oversight of the financial process. He earned his B.S. in finance from Iowa State University and a Master of Financial Management (MFM) degree from Drake University.

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