Is the real estate market overheated? In October 2014, PwC published a report based on interviews of dozens of leading real estate professionals across a number of sectors and disciplines. The report, “Emerging Trends in Real Estate® 2015,” predicted that the momentum of the last five years would continue but cautioned investors to take nothing for granted. “It is possible to stretch for opportunities—you just have to be aware of how much runway you have left in the current cycle.” Experts also observed that the private equity sector held some advantages in finding opportunities for...

He may be one of the most visible figures in the emerging movement, but Charly Kleissner realizes that there is still a lot of healthy skepticism surrounding about impact investing.“I know there are a lot of questions,” Kleissner says.If anyone is in a position to answer some of those questions, however, it’s Kleissner—particularly given how he has embraced the strategy in his own investment approach. It all began for Kleissner back in 2004, when he and his wife, Lisa, began to think more seriously about how to manage and invest their wealth, and challenged their advisors to align their wealth...

FOX has been working to determine what makes for a great experience for the client of a family office.Throughout 2015, FOX studied more than 30 businesses across a variety of industries—including notable brands such as Apple and Ritz-Carlton Hotels—in pursuit of determining what constitutes an optimal client experience and understanding how it can apply to the family office. Our research on this topic began as a FOX Thought Leaders Council™ initiative related to a family client’s relationship with their advisors, but as we have delved deeper into the realm of family client experience, we have ...

There is a big change just starting to impact the way the Internet, and its related apps, are used: they are moving away from a silo approach to one of interoperability.Essentially, instead of having to go to one particular website or application to make use of the functionality and service it offers, you will instead be able “call” the functionality or service you need from another website or application. For instance, you will be able to book an Uber ride from other applications—such as, say, Google Maps—without ever opening the Uber app itself. This new capability is sometimes called the “p...

Many FOX members have asked about what considerations should go into developing a family wealth strategy after an operating company is sold. To them, I’ll often tell the story of Thorndale Farm CEO Oakleigh Thorne and his 20 year plan.After Oakleigh completed his MBA in 1986, he went to work at Commerce Clearing House, Inc.—a company his family started in 1892. Oakleigh helped refocus the company’s energies, transforming it from a publishing company into a modern information technology company. He was promoted to CEO in 1993, and in 1996 led the sale of CCH for $1.9 billion to Wolters Kluwer, ...

Earlier this year, one of my clients came to me with a question about her family’s trust portfolio. She was worried that, despite it going against her own personal social values, she (along with the rest of her family) was investing in cigarette companies. “Do we really have to invest this money in cigarette companies?” she asked me. “I mean, there have got to be more socially responsible investments than that.”The question raised some important issues that trustees might face when it comes to the trend more commonly known as socially responsible investing. And while it might seem like avoidin...

Families of significant wealth rightfully expect their attorneys, investment professionals and CPAs to be creative, effective advisors. It's time they expect the same from their banker.Banking is one aspect of wealth management that affects the family every single day. Yet, despite the increasingly complex needs of families with significant wealth, they and their family office professionals often view banking as a tactical, commodity service. The banker is merely an order-taker, opening and closing accounts, sending wires, etc. and competing for their business based primarily on rates and fees...

In the not too distant past, if you were in IT and had virtualization skills, you probably thought your future as an IT admin was secure.Today, that is no longer the case.In "The Big Switch" by Nicholas Carr, the author explains how the use of electricity in larger businesses shifted from on-premises systems (companies had electricity departments, complete with electrical architects and managers) to third-party electrical grids that businesses simply tapped into. Electricity went from an item on which businesses focused a lot of their time, attention and labor to a simple utility they plugged ...

Recently, more than 60 FOX members took part in a survey of family offices by the Private Investor Coalition (PIC). PIC is an authority on legislative and regulatory issues affecting single family offices, and serves as a resource for disseminating information on legislative, regulatory and compliance issues impacting single family offices.PIC was interested in understanding how the current Family Office Rule—which excludes in-laws of a lineal descendant from the definition of family member—affects single family offices. Recently, the SEC has granted four exemptions for the in-law issue, but s...

Family wealth is notoriously difficult to maintain across generations. Without a powerful strategic vision, statistics show that family wealth is bound to dissipate. One useful strategy for nurturing a legacy is to foster an entrepreneurial culture within the family.Most families of wealth began their stories generations ago with an entrepreneur—a risk-taker with vision, tenacity and optimism—who magically created something of value, seemingly from thin air. Later generations, who benefit from the wealth that was built, feel they have more to lose and grow more and more conservative. Meanwhile...

CFOs are increasingly using Accounts Receivable (A/R) Insurance as a strategic tool to support business growth.A/R Insurance, also known as Trade Credit Insurance, has long been a standard corporate operating procedure in Europe, where complex cross-border trade makes managing receivables a significant challenge. In the United States, A/R insurance is now becoming increasingly relevant to senior finance executives as companies seek new and better tools to manage risk, improve liquidity and support sales growth. Here’s how:Manage Risk - For many companies, A/R is the largest asset on their bala...

Raise your hand if your family has ever had a cousins group that was somehow engaged in investing together. Keep your hand up if after a year or two, or even three, those Next Gens were no longer interested in their group. My hand is up. Is yours? Now, raise your hand if you decided to find a way to work past that blip in time, and have a thriving group. Hand still up? Mine is. Here are some of the reasons why:First, we diversified—and I don’t just mean our portfolio. When the process of investing was no longer interesting, we had to find other ways to stay focused, so we tried a few different...

It used to be very difficult for beneficiary’s to change the terms of previously-established trusts, and if they were able to make the changes at all, it could be quite costly. But through a process known as “trust decanting,” trustees can “pour” the assets from an older, less-desirable trust into a new one. This essentially allows beneficiaries to change or rearrange the structure of the trusts.Many states have enacted decanting statutes in the past few years, and there has been a corresponding increase in interest in decanting and changing trusts. Here’s what Mark Harder, Partner at Warner N...

Families with significant wealth often tell us they wish to deploy a portion of their resources to make some kind of positive impact—broadly defined as doing good for people and the planet. We know that for many clients, the pursuit of impact is fundamental to their efforts to define their family or foundation legacy. While one way to achieve impact is by giving time and money to nonprofits and foundations, philanthropic activities can be complemented by impact investing.Impact investments are made with the dual goal of return on investment and positive social and environmental good. Impact In...

There seems to be at least one new concept that lingers in the memory and creates a buzz among the attendees at each FOX event. At this year’s FOX Wealth Advisor Forum, it was the observation by Glen W. Johnson, Managing Director of Mirador Family Wealth Advisors, on the significant impact that increasing life expectancy is going to have on the dynamics of family wealth management.One hundred fifty years ago, life expectancy in the US was 40. Fifty years ago, it rose to 60. Today it is nearly 80. How soon will it reach 100? When it does, it will have resounding repercussions on family wealth m...

When I attended a recent FOX Executive Council meeting, one common theme I kept hearing from members was how difficult it is, in this or any business environment, to keep the right talent on staff and not face flight risks. The most obvious answer is “cash compensation,” but sadly there’s not an infinite salary budget, so what else can we do to keep our best employees?As managers, we should be asking ourselves, “What makes people tick? And what keeps them truly invested and engaged?” After all, anybody can put in a mini-fridge and call that a “fun” environment, but in the long-run, small “fun”...

One of the hardest things for any family to accomplish, but especially a family of wealth, is to engage multiple generations in a meaningful way. I’m convinced that one of the best ways to do that is through shared philanthropy.In the summer of 1999 my cousins and I ranged in age from 12-27. At 19 years old, I fell somewhere in the middle. Those of us who were 16 and older had attended our first family retreat the prior year, and were introduced to the concept of our family office and all that it entailed. Without delving into too much detail, I’ll simply say that it was overwhelming and ...

A client of mine once characterized Wealth Integration as a “fiscal physical.”Initially, I wasn’t all that flattered by the comparison. However, the more I thought about it, the more I came to realize that this unfortunate-but-fair description accurately recognizes that, like a medical physical, a fiscal physical is something that one knows should be done,but may not look forward to doing. The entire estate planning, financial planning and accounting process may actually fall in this category—clearly, few family members awaken thinking, “Wouldn’t this be a great day to call my attorney, financ...

For many family offices—especially the smaller ones—the thought of spending tens of thousands of dollars on one key element of cybersecurity, penetration testing, is a daunting prospect.Though certainly helpful, penetration testing is often overkill for many offices. A better approach may be to start with a vulnerability scan.The terms “vulnerability scan” and “penetration testing” are frequently confused or incorrectly used interchangeably. While a vulnerability scan identifies and reports potential vulnerabilities, a penetration test also attempts to exploit both the technical vulnerabilitie...

Here are some numbers to grab your attention and ponder: The U.S. dollar has rallied almost 25% percent in the past nine months and 35% over the past four years. In light of these substantial and notable gains by the bullish greenback, it’s hard not to ask: What is propelling the dollar’s surge? What should investors do going forward? Will the big dollar rally continue?The answer to the last question is an emphatic yes. As Alan Ruskin, Managing Director and Global Co-Head of FX Research at Deutsche Bank, observed in a recent conference call, the dollar is expected to gain another 20% against t...

Multi-family offices and wealth advisors are enjoying growing profitability—and revenue.That’s what we learned while conducting the 2014 FOX Multi-Family Office and Wealth Advisor Benchmarking Study Report, FOX’s best and most current thinking on the direction of the Ultra High Net Worth (UHNW) advisory business.Overall, profit margins are growing at multi-family offices and wealth advisor firms, with median profit margins up by 5 percentage points (from 19% in 2012 to 24% in 2013). However, at the same time, we have noticed increasing divergence in profit margins and revenue growth. A fe...

There’s a strong correlation between family offices’ investment performance and reliance on a CIO and investment committee.In analyzing the results of the 2015 FOX Global Investment Survey, our annual survey of investor attitudes and behaviors, we found that one group had significantly outperformed the rest. We looked into what accounted for the difference, and found that they had an internal CIO and/or investment committee directing the investment strategy and often had a committee structure for setting policy. Among these top performers, 93% said they have an investment committee and 87% rep...

With the impulse-inducing holiday season past, we are well into a new year, maybe even with a resolution or two to keep. Most of what happens over the holidays I can only handle once a year, but I do wish that everyone could keep up the spirit of giving and sharing with those less fortunate for the balance of the year, too. This got me thinking: why is it that most of us tend to make donations so impulsively, and, dare I say it, selfishly?Along with the change to a new calendar year is the need to file a tax return for the last. I am going to go out on a limb and say that those looking forward...

Leadership is an integral part of a wealth advisor’s everyday responsibilities as someone responsible for providing holistic and integrated family wealth services.Sarah Biggerstaff, noted coach and lecturer in the practice of leadership at Yale School of Management, will walk participants through a process to unlock their potential and explore their personal identity as a leader at the 2015 FOX Wealth Advisor Forum. In preparation for this year’s Forum, we asked Sarah five questions about leadership and the family office. Here’s what she had to say:FOX: In a collaborative environment...