RECAP: 2019 FOX Global Investment Forum

2019 FOX Global Investment Forum - Recap


Breakout 3: Navigating the Landscape of Investment Advice

Paulina Cromwell - Family Office Exchange

Charlie Grace - Family Office Exchange

Paulina Cromwell, CFA, Product Manager, Family Office Exchange
Charles B. Grace, III, Managing Director, Family Office Exchange

Session Description: 

This session explored the landscape of strategic investment advisors and explained how families and family offices utilize different advisory models. The session compared business models (levels of discretion, open architecture and proprietary product utilization, inclusion of other ancillary services, and explored key selection criteria to establish the best fit between advisor and client. A case-study approach highlighted various challenges and success factors for families working effectively with external advisors. 


"One of the big challenges for families is finding advisors who will help the family navigate a diverse set of investment approaches while still aligning to the family’s core values and strategic intent.”
Key Takeaways: 
  • Families utilize different advisory models across investing, including: a team of in-house experts, in-house led with help from advisors, advisor-led with family approval, or fully outsourced investment management.  A fully internal investment team requires strong talent but provides the family with privacy and full control over decisions. A hybrid model of a leaner in-house team supported by external advisors can provide access to diversified investment thought leadership but can delay decision-making and create questions around accountability. A fully outsourced approach frees up staff to focus on other activities and provides access to “best thinking” but can lead to limited family engagement. 
  • Strategic investment advisors were laid out in various categories, grouped by common characteristics, and included traditional investment consultants, multi-family offices / RIAs, OCIO/multi-manager firms, and asset managers and trust banks. These firms cover the spectrum from non-discretionary to discretionary, and from open-architecture to offering proprietary products. There are pros and cons to each type of advisor and each family will prioritize these characteristics differently.
  • It is important to answer questions around several key topics prior to engaging with an investment advisor, including: purpose for the investment pool, depth of investment resources, desired service model, level of discretion, and investment philosophy. These criteria will guide the type of advisor a family should engage with and will allow for the best “apples to apples” comparison in the selection process. The process is not clean-cut from there, however. Selecting the “best” investment advisor is actually about finding the “best fit.” Families should consider the following in their selection criteria: quality of proposed solution, team, transparency, client profile, performance, fees, and specific expertise. Other important factors to find the right fit include: alignment of interests & values, advisor ownership structure, access to managers, receptivity to input/humility, compatibility, team stability, and succession planning. 

(FOX Members only)