Employers in the wealth management industry face two distinct talent challenges, one long-term and the other immediate. According to a recent Accenture report titled “The ‘Greater’ Wealth Transfer: Capitalizing on the Intergenerational Shift in Wealth,” Baby Boomers stand to pass on an estimated $30 trillion in wealth to their Generation X and Millennial heirs. Looking ahead, wealth advisors are scrambling to find that next generation of talent to help preserve and provide service to this younger and potentially enormous client base.In the short-term, however, employers in the wealth managemen...

Business owning families face the simultaneous challenges of running a business while planning for the future of the family and the management of family capital. While successful businesses benefit from disciplined operations and strategic planning, the management of family wealth is often eclipsed by the needs of the business and delegated to trusted business executives. Knowing when to separate these functions and how to make a smooth transition can increase the chances of long-term financial success and reduce unnecessary exposure to legal and privacy risks.As the family business grows, most ...

Every family enterprise needs a framework for holding together the disparate parts of the family activities, and a process for managing the elements in the framework. An integrated model of the Family Enterprise encompasses the family’s capital goals (in green), family governance and leadership issues (in gold), and the coordination of financial alternatives and solutions (in blue). The goals are the backbone from which everything else takes direction. In successful multi-generational families, these goals are revisited with regular frequency to ensure that they continue to reflect the interests...

Successful multi-generational families often have difficulty making the transition from a business-centric family to a family-centric enterprise as the scope of their activities expand, and the family grows across generations. The diversity inherent in the growing group of shareholders brings the enterprise model to life. Some shareholders care most about the growth of the business capital; others care more about the growth of their social capital (and its impact on the community); and still others care more about the growth of the human capital and the development of each individual...

For most families, the natural evolution of wealth concerns eventually shifts from creating, preserving and transferring wealth to the realities of next generation education and preparation. With a growing body of research underscoring the importance of applying early and sustained attention to the preparation of heirs, many families have reprioritized to focus more intentionally on wealth education for next generation family members.Starting EarlyWith younger family members, education about the role of money and wealth starts with the introduction to basic financial concepts like saving, spen...

Carl Robinson has spent the last 25 years helping a wide range of businesses develop effective leadership strategies. Currently, as managing director of Vantage Leadership Consulting, he focuses on identifying and developing executive talent.Last October, we were fortunate to have him address our annual Fall Forum on the leadership challenges facing wealthy families. Robinson looked at the critical role developing future family leaders plays in preserving wealth across generations. In the following clip, he discusses the importance of establishing a collective point of view in developing effec...

The FOX Financial Executive Council was first established in 2004 and it offers family office financial executives (CFOs, controllers, tax managers, etc.) an opportunity to share best practices on operational, compliance, and technical issues.On January 30-31, 15 of our members joined us in Orlando, Florida, for a meeting focused on management issues. This included a discussion of the services family offices generally outsource and the services they provide in-house. The common trend among our attendees was that their family offices depended on a mix of in-house and outsourced services f...

On Monday, Feb. 10, 2014, the IRS announced it is delaying a portion of the employer mandate associated with the Affordable Care Act or Obamacare. The delay applies to employers with 50-99 workers. These employers will have until 2016 before facing a penalty for failing to cover employees. Businesses with fewer than 50 workers are exempt from the employer responsibility provisions.A few important considerations:Those claiming a 2015 exemption are required to certify under penalty of perjury that they did not reduce their workforce to fewer than 100 employees in order to qualify.Employers will ...

In spite of growing complexities, families around the world have managed to stay together for generations, and they reap significant benefits from the concentration of purchasing power and the preservation of family capital. The crisis of 2008 demonstrated clearly the advantages that families with private capital have - by not being forced to make short-sighted decisions at the behest of outside shareholders. Third and fourth generation families in the U.S. say they have greater impact as a family by staying together, and they feel good about being part of something that is bigger t...

How does a family know when they are evolving from a family business into a family enterprise? When the collective activities of the family grow beyond the boundaries of the original business, there is evidence of an emerging family enterprise. The evidence appears gradually over time - when a vacation property is shared with all of the children; a foundation board is formed to manage the philanthropic goals; or a pooled investment fund is created to manage the liquid assets distributed from the original business. There are a variety of elements that can create complexity as shown i...

Whether you already have wills, trusts and other estate planning documents in place or need to have them created, there are a number of priorities to consider as you move forward with the legacy planning process.Here are six steps that may be appropriate for you to complete as you consider the ongoing management and ultimate disposition of your wealth:1. Take time to carefully determine what exactly you want to have happen.Thinking about the future of your money, particularly about that period when you may no longer be in the picture, isn’t easy to do. But before you make specific decisions ab...

If you have you been invited to a family business conference recently or picked up an educational piece on family wealth, you will have noticed the focus placed on next generation development. In particular the 3 E’s of entrepreneurship, education, and engagement. These are important topics, around which there is still a lot of work to be done; however, there is an ever increasing stock of family members who must reposition themselves as the next generation of elders, alongside this younger generation being prepared to take on the mantel of leadership.Given the lack of discussion on the topic ...

Eighty percent of family office employees received a salary increase in 2013, according to our latest benchmarking study, "Family Office Compensation & Benefits." The median reported increase was 4%, up from the 3% consistently seen since the 2008 onset of the great recession. A majority of family offices placed a premium on workplace flexibility with 68% offering flexible hours and nearly half (49%) allowing employees the ability to work remotely. Respondents reported that paid time off generally ranged from three to four weeks depending on seniority, while cell phones wer...

If you’re familiar with Greycourt & Co. Founder Greg Curtis, you know that his blog is always a good read. His recent series on common mistakes families make investing after a liquidity event is especially compelling. Curtis notes that businesses tend to sell when the market is at its most overpriced. This means families who sell their business often find themselves investing just as the market is about trend downward. He sums the problem up nicely below:“Fourth generation family companies don’t get sold when markets are low and the economy is struggling. No one has any money then. No, if ...

While process was at the forefront of this year’s Forum, the most poignant moments of the event dealt with why families stick together — the beliefs and values behind all of the how-to discussions. Bestselling author and Founder of Empower Wealth LLC Lee Brower touched on this issue on the first day of the Forum, saying families should plan according to a set of guiding principles. He said that these principles will vary from family to family, but that operating according to principle gives a family much needed direction. Similarly, Carl Robinson talked about successful leadership transit...

We recently held our annual Fall Forum in Chicago. This year’s theme was “The Butterfly Effect,” which reflects the theory that a change as subtle as the flap of tiny wings can profoundly change the world. The same can be said about the family enterprise. Every choice you make (or don’t make) has the potential to ripple across your family, your investments, your philanthropy and your family businesses.This is why clear decision making processes play an important role in preserving wealth across generations. As speaker after speaker pointed out, successful multigenerational families...

Many families have managed their wealth for generations and have healthy, productive and successful sixth- and seventh-generation family members to show for their efforts. What are the secrets of their success? One commonality we’ve seen in our more than 20 years of serving families is they’ve made sticking together a priority. Following are seven family continuity recommendations that have stood the test of time:Identify and communicate the benefits of working together. Keeping the family together has a number of benefits. It offers economies of scale in investing (better manager, fees, great...

The following insight is a contribution from TriState Capital, a Thought Leaders Council member of the Family Office Exchange.Let’s look at the overall economy so far in 2013. We have:A soaring stock marketA housing market that is recoveringDeclining unemploymentGDP growthFavorable credit marketsThese factors seemed awfully far out of reach a few years ago; yet the economy has continued to experience a positive recovery, and, barring continued turmoil in Washington, will continue to do so. So who has the answer to the $64,000 question: Why is deal activity in the middle market down?If the...

The following blog post is a contribution from TriState Capital, a Thought Leaders Council member of the Family Office Exchange.Early Monday morning an email is sent to you from a client. He is overseas. His wallet has been stolen. He has no way of getting home. In order to access his account he needs you to give him the password, which he has forgotten.Your firm prides itself on customer service; it’s what you are known for, and its how you’ve managed to develop your stellar reputation. However, you must now ask yourself one simple, but important question: Is this requ...

The following blog post is a contribution from Ascent Private Capital Management, a Thought Leaders Council member of the Family Office Exchange.In today’s fast-paced world of technology, we seldom stop to reflect on the legacy of our grandparents and great-grandparents. And not just what they left us in their will. How often do we tell our children and grandchildren about the relatives who came before us: their names, where they lived, what they were like and what we learned from them? What about the family business: how did it start and has it always thrived and provided well...

Systems security and finding a software solution that integrates financial data across multiple functions rank as family offices’ top technology concerns, according to our latest study "2013 FOX Family Office Benchmarking: Technology in the Family Office." The respondents' sensitivity to security applies to both the data itself and communication of the data, with most participants (71%) opting to not send financial information to clients’ mobile devices. Family offices take a variety of approaches to safeguard their data with a majority (56%) expressing confidence in their security practi...

The following blog post is a contribution from Ascent Private Capital Management of U.S. Bank, a Thought Leaders Council member of the Family Office Exchange.The windfall of inherited wealth often comes with feelings of guilt and elation, isolation and confusion. Learning to be comfortable with inherited wealth is a process; a process of moving through emotional stages that can be aligned with the emotional stages of grief. There are six emotional stages of inheritance: disbelief, anger, euphoria, guilt, paralysis, and becoming “heirworthy.”1 The hope is that people will gradually make it...

There is a startling statistic in the recent FOX Benchmarking Report: Technology in the Family Office. Ninety-seven percent of family offices claim to have developed a disaster recovery plan. It is heartening to see that firms have adopted this best practice. It is only fitting, considering that family offices are providing critical wealth management and cash flow services that need to be dependable 24/7.Of course, these plans need to be continually revisited and updated as new threats appear and past assumptions are debunked. Hurricane Sandy proved the great humiliator to those wh...

The following blog post is a contribution from HUB International, a Thought Leaders Council member of the Family Office Exchange.I was recently visiting New York with my family. We had just returned from dinner and were relaxing in our hotel room when my daughter asked me to pass her cell phone to her. As I did, I noticed that she had been communicating during dinner with her siblings using something called Snapchat.Snapchat is a photo messaging application that enables users to send photos and videos, known as “snaps,” to a controlled list of recipients. It promises users a method to send ima...

On June 26, 2013, the Supreme Court of the United States issued two groundbreaking opinions regarding same-sex marriage. The rulings will substantially impact financial and estate planning for same-sex couples living in jurisdictions that recognize same-sex marriage. In the following interview, we talk to Susan Von Herrmann of FOX Thought Leaders Council Member Schiff Hardin about the rulings and what they mean for same-sex couples’ estate planning. The Supreme Court recently ruled on two cases regarding same-sex marriage: United States v. Windsor and Hollingsworth v. Perry. Can...