Buying or selling real estate, especially your personal home, presents a unique set of fraud and cyber-security risks. Protect yourself by understanding these risks and exercising the precautions below during real-estate and other high-value transactions.Understanding the RisksSeveral factors make real-estate transactions especially tempting to cyber-criminals.Public information on the sale. When a home is listed online, those listing details become publicly available. Cyber-criminals can monitor listing sites to learn when a transaction is likely to occur. They can also identify the listing a...

Members of the FOX Client Experience Council – a like-minded group of executives from single and multi-family offices around the country who gather in person twice each year to learn together, share resources and socialize – are in constant pursuit of creative ways to surprise and delight their clients.At a recent Council meeting, their homework included reading the book Setting the Table: The Transforming Power of Hospitality in Business by Danny Meyer and sharing their ideas for applying the lessons in the book to their family offices.Following are some of the group’s key takeaways:Enlighten...

Conscious leaders know that co-creation is a possible choice along with competition and compromise. They have developed the wisdom and skill to know which option to choose and when to choose it.Competition leads to win/lose. Compromise results in lose/lose. Co-creation brings about win/win.Competition requires a belief in a zero sum game. Anything I get is something you don’t, and anything you get is something I lose. It occurs in a low trust relationship. I don’t trust you or the universe at some fundamental level. Therefore it involves withholding relevant information, opinions, and authenti...

More advisors to families of wealth are wondering if an asset-based pricing structure has out-lived its useful purposeIt seems long ago that wealth advisors could charge an asset based fee that covered the cost of providing investment services with a "cushion" leftover to cover additional services such as planning, education and advice. And, if all went according to plan, the firm would earn a reasonable profit margin.Well, times have changed. The investment portion of the fee is being hammered down by low cost providers and the buying power of large investors. The cost of providing an unconst...

Transitioning a family business to the next generation is one of the most important and toughest business decisions a family firm owner will ever make. No other challenge has as much potential to exacerbate the special stresses—or, conversely, highlight the unique advantages—of operating a family-owned company.A family business should consider how to engage and empower the next generation for the role they'll play in governance, strategy-setting, and all other aspects of the business. However, a lack of a formal succession plan can lead to a number of problems when the current generation of le...

Jackie Kennedy Onassis once said: “If your children turn out well, nothing else matters. If your children turn out badly, nothing else matters.”Having the young people in your life turn out well is as important as anything else you do in life, right?The children’s happiness depends on it. Your happiness depends on it. And if you’re part of a family business and you want it to continue, your legacy depends on it.The big question is, “How do you help them turn out well?”Family Stories, a Key IngredientFortunately, there’s a good answer to this question. According to Dr. Robyn Fivush, Direc...

At first glance, the clothing company Patagonia, the cleaning products manufacturer Method, and the funding platform Kickstarter might seem radically different. After all, they come from vastly different industries.However, they are all benefit corporations, which means they belong to a new class of corporation in that they voluntarily meet higher standards of corporate purpose, accountability, and transparency.Companies can incorporate as benefit corporations in any state where such legislation has passed, and the process to become a benefit corp varies by each state. (See Benefitcorp.n...

According to the 2016 FOX Family Office Compensation and Benefits survey, only 30 % of offices offered long-term incentive plans.Family offices are often looking for talent with specific expertise and understanding of a family office environment. Long-term incentives can be pivotal in attracting and retaining talented employees. Knowing such plans are not widely used, being innovative and creative in the incentives offered can be a key differentiator to attract and keep the most talented people. In FOX 2016 study, the long-term incentives used include deferred compensation, long-term per...

David Lough’s wonderful, engrossing, nightmarish study of Winston Churchill’s reverse Midas touch (Picador, 2015) inspires our old friend Michael Harkins, chief of Levy, Harkins & Co., to draw a monetary and investment lesson.No More Champagne, written by a former banker who knows his money, chronicles the long-running calamity of Churchill’s personal finances in the context of the parallel disaster of the British pound. At the heading of each chapter is the sterling/dollar exchange rate and a rough-and-ready translation of historical purchasing power into contemporary money. “James Grant,...

While many principals sense that their current investment programs aren’t likely to produce satisfactory risk-adjusted net returns in coming years and beyond, most have difficulty pinpointing with actionable precision the root causes of their discontent. We’ve assembled a list of the defects we encounter most frequently, rank ordered by their frequency of appearance.“As we prepare for the FOX Autumn Global Investment Forum in New York (September 12th), I wanted to highlight the thinking of one of our session speakers, David A. Salem of Windhorse Capital Managment. David will be speaking on str...

“What is your family office’s number one threat? If it happened today, could you function tomorrow?”These are the questions that one family office executive asked her peers as she finished sharing the story of her office’s move to the cloud. If you can answer, “Yes” to the last question, you’re in great shape and may not need to keep reading. If this question gives you pause, the lessons learned from this FOX Council member may help you as you consider your options.FOX Council meetings bring a group of 25 like-minded executives or wealth owners who share similar roles and challenges to t...

After an unsolicited offer from a competitor, a family reflects on what they’ve built and the uncertain road ahead.The majority of family-owned businesses have no formal succession plan or successor leaders in the wings. Equally troubling are the studies showing only 30% of family businesses surviving through the second generation.Successful transitions are the result of early planning, ideally years before the change in ownership or control. Does this mean an unplanned transition is doomed to fail? In short, no. And, our case study outlines one example of a successful transition.In our white ...

Interest in Direct Investing Increases: The 2017 FOX Global Investment Survey reveals a growing focus on direct private equity investments for family offices, reflected in asset-allocation and staffing trends.

Social impact bonds, sometimes known as “Pay for Success” projects, are contracts with the public sector in which commitment is made to pay for improved social outcomes, which may result in public sector savings. Despite their name, social impact bonds are not bonds; they are public or private partnerships in which investors are repaid if and when improved social outcomes are achieved.The first social impact bond, ABLE (the Adolescent Behavioral Learning Experience Program), was launched in 2012 as a partnership between Goldman Sachs, Bloomberg Philanthropies, and the City of New York, accordi...

Based on financial news articles and television shows, everyone should be aware that money is being constantly withdrawn from active managers and placed into ETFs and other index funds. Undoubtedly, active managers are striving with even greater urgency to beat the indexes against which they are judged, seeking some edge. Here are two typical large-company, blue-chip strategies. One is value oriented, the idea being that the manager selects, only from within the benchmark index, in this case the S&P 500, those stocks that are the least expensive. It is generally agreed to be a lower-risk a...

The adage “Shirtsleeves to shirtsleeves in three generations” became a well-known prophecy because it is, unfortunately, true. And it appears to be true in virtually every culture. In Ireland, the saying is, “Clogs to clogs in three generations.” In Italy, it’s, “Stable to stars to stable” in the same time frame. In Japan, “The third generation ruins the house.” The Chinese proverb is, “From paddy to paddy in three generations.” Brazilians say, “Rich father, noble son, poor grandson.”What it often means is that the first generation works hard to build the wealth and a better life for the famil...

The ingenuity and success rate of hackers targeting banks and credit unions continues to shock and amaze. Don't expect the financial services industry to ever willingly disclose how much it loses to cyber thieves on an annual basis. But make no mistake determined, well-funded hacking rings continue to breach banking systems on a regular basis. And they continue to inflict material losses; likely at a scale the general public would find shocking.Breach attempts against financial services firms occur 24/7/365, says Brian Soldato, senior product management director at NSS Labs, an Austin, Texas-b...

When was the last time you felt “at home” in a completely new environment? What about this experience – the people you encountered or the service you received –made you feel truly welcomed?This happened to me last week at my daughter’s college orientation, a day filled with big emotions, as any survivor of this experience well knows. The faculty and students who welcomed us took the angst of the unknown out of this new situation by doing a great job with onboarding. They began by conveying their desire to make this new experience a positive one for students and parents alike and led us through...

Trillions of dollars are beginning to shift within ultra-high net worth families to a new generation of heirs, according to a recent Accenture study. As this transfer of wealth takes place, what giving trends from millennial philanthropists can we expect to see in the years to come?To help answer that question, our parent company BNP Paribas teamed up with The Economist Intelligence Unit to publish the 2017 BNP Paribas Individual Philanthropy Report. The report is based on interviews conducted from November 2016 to January 2017 with ultra-high net worth millennials and relevant experts in the ...

51% of decisions in family businesses are made by senior generationsOver the last few years, business owners have inquired about ways to integrate the younger generations with the purpose of preserving the family business. In a recent FOX study, 70% of survey participants said that generations 1 and 2 are leading the business. Furthermore, as indicated in the graph below, 51% of decisions are made by the senior generation compared with 38% of decisions reached through consensus. I believe this information indicates a struggle family businesses are faced with, in particular finding appropriate ...

How does one manage a vibrant, multi-dimensional family business with family members and stakeholders scattered across the country? That’s the 21st century challenge for business-owning families, and creating a family enterprise is the first step in an effective strategy to address it.Many successful family businesses I’ve worked with have transformed themselves over the years into family enterprises. These are families that define their collective wealth as broader than the family business, or the financial wealth, and inclusive of all that the family owns collectively. They’ve managed ...

For the past several years, I have had the honor and pleasure of Co-Chairing the FOX Senior Management Council with Mariann Mihailidis at FOX. This council is a wonderful group of 25 senior family office leaders of multi-generational family enterprises who meet twice a year for a couple of days. My involvement in this council came in response to their desire for leadership training focused on the practical skills they need to engage and serve multiple generations of family members. One of the areas we’ve covered is the notion that different situations require different levels of leadership:Exp...

The acronym ESG stands for Environmental, Social, and Governance. It refers to a mode of screening investments that considers environment, social and corporate governance disciplines as criteria, seeking to achieve both competitive financial return and positive social impact.ESG is part of the socially responsible investing (SRI) spectrum, and it is the most common portfolio screening that Family Wealth Advisors conducts.ESG in actionAlthough most ESG screening is done by wealth managers themselves, Thomson Reuters provides structured and standardized ESG research in easy-to-navigate databases...

As an entrepreneur or small business owner first starting out, you may have the desire to make philanthropy a core principle of your business but feel you have to put that desire on hold until you earn more money.But Vern Mangels believes you should not give in to that feeling. “You have to start with the intention that you are giving back from dollar one,” said Mangels, CEO and owner of the Anaheim RV Park, a family business that his grandfather started 61 years ago as Midway Trailer City. “Give back even when you don’t have much to give.”One route to merging business growth with giving Since...

The impact of the work accomplished each year by FOX family council members is impressive. We gather these peer groups of 25 wealth owners or family office executives twice a year, and my favorite session of the first meeting of the year is called “Accomplishments and Initiatives.” In this session, every council member seated around the table has an opportunity to share his or her greatest accomplishment of the prior year and number one initiative for the current year. Each year, I am blown away by the progress that these family office leaders are able to make with their (often) small-but-migh...