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...

There has been a paradigm shift in family office technology.A decade ago, family offices had to custom build systems to meet their specific needs. It was expensive, cumbersome, and could quickly prove obsolete as the family’s needs grew and evolved. Even when cloud-based solutions first joined the conversation, many offices expressed concern about how trustworthy the systems truly were—particularly when it came to privacy and data security.Today, the cloud has completely transformed wealth management and family office technological capabilities. Compared to build-from-scratch systems, the clou...

An impressive 79% of families say they have at least one family foundation. That's what we found in the 2014 FOX Family Office Benchmarking™ survey, our comprehensive biannual benchmarking study among single family offices. This 79% number is consistent with the 80% of families that reported having foundations back in 1996. First- and second-generation family offices (81%) are also just as likely later-generation family offices (77%) to have a foundation, as philanthropy is often the glue that binds generations of family members together for the long-term.Foundations are prevalent across ...

Recently, a close friend of mine told me about a financial analysis on investing that a private wealth firm had sent her. She read most of it, but it all seemed very technical and disjointed to her, and after spending over an hour sifting through the material she found herself wondering, “So what does all this mean to me?”This feeling seems to be especially true among Millennials, yet I believe their sentiment merely epitomizes a trend impacting us all: exponential change, interdependency, greater complexity, and globalization—it’s just becoming incredibly hard to keep up with everything.In li...

The SEC has expanded the definition of “family” in single-family offices.The January 2015 ruling, which was an update to a previous SEC ruling we covered in the FOX Insights blog last year, affirmed that single-family offices not only have the right to also service family members’ in-laws and their relatives, but also former in-laws and relatives even after a divorce. The case at hand was addressing whether the single-family office established by former Treasury Secretary William E. Simon could continue to serve a former in-law even after their relatives were divorced. Incidentally, that in-la...

The SEC has expanded the definition of “family” in single-family offices.The January 2015 ruling, which was an update to a previous SEC ruling we covered in the FOX Insights blog last year, affirmed that single-family offices not only have the right to also service family members’ in-laws and their relatives, but also former in-laws and relatives even after a divorce. The case at hand was addressing whether the single-family office established by former Treasury Secretary William E. Simon could continue to serve a former in-law even after their relatives were divorced. Incidentally, that in-la...

When you think of Millennials, one of the first images that likely comes to mind is a group of young adults, all standing around in a circle... looking down at their smartphones. Unfortunately, this widely accepted vision of Millennials gives a false impression of how young adults prefer to communicate.Here are three key communication takeaways from interviews FOX conducted while preparing our Engaging the Client of the Future white paper:1. Millennials value face-to-face communication and want more of it from their advisors. While many advisors think t...