At just 35, financier Dovi Frances holds the Guinness World Record for selling the most expensive single life insurance policy in history.
Frances, who runs SG, LLC, in Santa Barbara, Calif., helped put together a $201 million policy for a “well-known” Silicon Valley billionaire in the tech space.
It involved more than a dozen underwriters to put together the transaction. It was complicated, but Frances says that’s his firm’s specialty, addressing “the complex financial needs” of wealthy people.
“Why would anyone need a $US201 million life insurance policy?” I recently asked Frances over breakfast in midtown Manhattan. He said there’s no more effective way to protect your estate than through life insurance.
When you die, he said, your estate is taxed by the government at about 45 per cent. If your net worth is $US1 billion, then the tax would be in the hundreds of millions. The problem is that billionaires aren’t necessarily liquid.
“The interesting thing about an event of death is this — you’re not liquid. If you’re worth $US1 billion, you’re not $US1 billion liquid. You have some stocks, you have some assets,” he said, adding that those things aren’t easily liquidated.
According to Frances, it’s the high-net-worth folks who think ahead of time about the financial situation they will leave behind.
“Let’s be honest. We have a very short period of time here. That’s why you and I are so driven to make an impact. It’s our show. The curtain will close. May as well make an impact and leave a mark and have fun while doing it. Most people don’t think about the after when they’re gone … And because of that, many people ignore it. ‘Oh, I’ll take care of it later.’ People don’t do it. Sophisticated people do it because they have good advisers.”
At such a young age, Frances has drive. He considers his work his hobby. He loves building businesses.
Frances grew up in Israel, where he shared a bedroom with his three brothers. His father was an Israeli IRS agent who inherited a small auto garage outside Tel Aviv from Frances’ grandfather. Frances’ father turned the garage into a business with 400 employees and several locations. It could have been Frances’ business, but it wasn’t the path for him.
“I would have been wealthy,” he said. “I wanted to do things by myself and live and die on my own sword.”
Frances spent 4 1/2 years in the Israeli army (the requirement is 3 years for men). During that time, he was in the infantry and attended the officers’ academy. He went on to graduate from business school, and then followed his older brother to Deutsche Bank in San Francisco in June 2008.
He was a junior-level bank employee when he woke up and watched the news of the Lehman Brothers’ collapse that September.
Despite the financial-market meltdown, Frances didn’t lose his job. That’s because there was one financial instrument that Deutsche Bank had that other banks didn’t — loans. And Frances excelled in selling loans.
However, when the government rolled out the Troubled Asset Relief Program (TARP), his competitive advantage was destroyed. Other banks had started extending credit, and his pipeline was gone overnight.
He didn’t give up, though. Instead, he thought of a new idea to get clients.
“With that, I needed to figure out a way to reinvent myself as a banker. I decided to do something no banker has done before — direct letters to people who are not clients who reside in properties in excess of $US5 million.”
Frances worked with Deutsche’s legal and compliance to draft the letter. He sent out 2,000 and received two responses. One of those responses was from Sergey Grishin, a Russian billionaire.
Frances said Grishin’s chief of staff saw the letter and opened it. Grishin thought “Dovi Frances” was an interesting name. That’s when the billionaire decided to reach out.
Frances got an email from Grishin about 3 a.m., saying, “Hey, Dovi, I got the letter. I want to meet. I just bought this house for $US27 million in cash! When are you available?” They met that same morning in Santa Barbara.
After, he managed to bring Grishin on board as a client. They did some deals together, and eight months later Frances left the bank to launch SG, LLC. (SG stands for Sergey Grishin.)
SG was founded to help wealthy people secure jumbo loans. Since 2010, they have facilitated $US550 million in loans for 450 families. Frances has built a family office for Grishin. They have an asset-management business for wealthy families as well as a venture-capital business called SG VC.
This is only the beginning, Frances says. He plans to continue to work hard so that when he’s no longer on this earth his survivors will also have a better life.
“Hard work pays. It enables you to give better life chances to your survivors. Your kids, their kids. I want to do for my kids what my dad has done for me. I want to be able to offer them added value, to teach them discipline, creativity, and wisdom, while allowing them to go to good schools. Then they can go and find themselves.”