To many people in the financial services industry, it seems that the family office (FO) is a relatively new development in high-net-worth (HNW) wealth management. Yet, more than a century ago, in 1882, the Rockefeller family established one of the first FOs, choosing to consolidate their wealth management needs into one centralized organization.
Today, according to a survey done by Family Wealth Alliance, there are more than 2,500 single-family offices (SFOs) and more than 140 multi-family offices (MFOs) worldwide. Over the years, the FO has undergone changes necessary to keep current with market demands, tax legislation, financial requirements and other developments. Even as the FO business has changed, its core mission has remained the same: to help families tackle the challenges that come with a life of significant wealth.
I’ve been in the FO management business for 25 years. Here’s what I’ve learned about the key services an FO can provide and the best ways to manage one.
Shift to MFOs
Since the 1990s, the FO marketplace has seen a shift from SFOs to MFOs, as SFOs have identified the expanded benefits that shared resources can provide to families. Industry professionals have become more sophisticated in their knowledge of various services, and there’s been a noticeable increase in the specialization of service teams. Generalists are in decline, driving a greater need for a single resource capable of coordinating and managing specialist providers.
Some investment firms, banks and trust companies are recognizing that their HNW clients (that is, families with a net worth of $25 million or more) are in need of more services than they can provide and are trying to rebuild themselves as MFOs to better serve their most valuable clients.
In addition to HNW families, the market has seen a growth in families who want the benefits of an FO, but don’t have the wealth level to justify the fee associated with an SFO. For example, I recently received a call from one family with $100 million-plus in assets that had determined that they couldn’t continue to effectively and economically run their FO, so they outsourced the management to our MFO. In addition, smaller MFOs, as well as SFOs, are finding it increasingly more difficult to recruit the high level of talent they need to continue to operate, due to few career options for professionals within the firm. Firms of all types are looking to become FOs, some only to gather assets and increase assets under management.
Overall, the FO industry has become more structured, organized and formalized, with firms facing increased checks and balances and changes in regulation and government oversight at both the state and federal levels. Most recently, in the wake of the financial crisis that began in 2007, the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010 as a means of increasing financial regulation to avoid another financial crisis and provide more transparency for investors, is driving FOs to reassess their operations.
As mentioned, there’s been an increase in families desiring FO services, but there hasn’t been an increase in understanding what the FO truly is and how it serves a family’s needs. To gain a better understanding of the benefits FOs provide, it’s important to identify why HNW families need a single-source wealth management agency.
Consider, for a moment, that the average HNW family has more than 25 different suppliers providing a range of financial services, as stated by the Family Office Exchange. From trust companies, foundations, banks, insurance and brokerage firms to attorneys, charities, hedge funds and money managers, among others, managing the many service providers required by HNW families can quickly become overwhelming, even for the most savvy family members. Add to the mix factors such as: younger generation family members in need of financial mentoring and education; the sale of family assets resulting in significant cash infusions; and ever-changing tax and estate laws, and the need for an all-in-one resource capable of managing every variable for the best interest of the family becomes even more pressing.
Ten Core Services
Just as each family is unique, so too are their wealth management needs. How do FOs personalize services to meet individual needs and maintain a sustainable business model? Even though each family has unique requirements, their needs can generally be categorized into 10 distinct, but interrelated, elements. Some families may find they need comprehensive services; others may find they need only the administrative, investment or legacy planning components. Ultimately, the greatest benefit of an FO is the ability to personalize services in the best interest of the family.
1. Estate planning. This is a vital service offered by the FO, one that has a direct influence on all other FO management components. The FO works to determine wealth transfer objectives, monitors the estate plan on an ongoing basis to ensure that family goals and financial management plans are aligned and makes recommendations that are in the best interest of the financial well-being of the family.
2. Lifestyle maintenance. Helping families assess whether they’ll have sufficient capital to maintain or obtain a certain lifestyle is one of the primary services FOs provide. Through the use of tools, such as goals-based financial planning, risk assessment and customized financial reporting, FOs work with families to help them set realistic lifestyle goals for both the short- and long-term.
3. Managing investments. The FO provides a trustworthy resource for investment recommendations and management, including creating strategies and advising on strategic asset allocation, performing due diligence and selecting and monitoring investments.
4. Education. Without education about wealth management, the best planning in the world will have little long-term impact. FOs create customized programs unique to each family’s requirements, so that family members can act thoughtfully when making any financial decision, no matter how big or small. Sustaining wealth across generations is possible only when family members have an overarching perspective created through mentoring and education. For years, families have asked for programs to educate the next generation, and now they’re available. A very large, multi-generational FO recently retained our firm to build family governance and educate the fourth generation about family values and the family’s assets. I believe this trend will continue to gain strength as families realize the inherent benefits of preparing heirs to be responsible stewards of wealth.
5. Expense management. Regardless of net worth, expense management is vital to financial success. For HNW families, expenses typically go far beyond balancing a budget and paying monthly household and credit card bills. The FO plays the important role of establishing internal controls, including expense approvals and archiving, categorizing and coding expense transactions, maintaining and managing cash balances and juggling the myriad of other details involved in properly managing expenses to help sustain and grow wealth.
6. Tax planning. For HNW families, tax planning carries with it a host of challenges, including trust and estate planning, charitable tax planning and structuring, as well as ensuring compliance with federal, state and local tax requirements. FOs manage all aspects of tax-related issues to position families in favorable tax structures.
7. Fiduciary accounting and support. This, as well as management of trusts and trust-related issues, are common services of the FO. Trust administration and management and liability support and advice for all trustees also fall under the FO’s fiduciary service offerings.
8. Philanthropy. Families fortunate enough to amass significant wealth recognize the importance of philanthropy. For HNW families, philanthropic efforts go far beyond annual donations. The creation of charitable trusts, strategic tax planning, next-generation involvement and foundation governance are all considerations for which FOs provide guidance and education.
9. Governance. Sustaining wealth across generations is paramount for HNW families. Without governance, however, the ability for a family to transfer wealth beyond three generations drops significantly. FOs are adept at guiding families as they develop a family mission statement, implement a governance system and prepare succession-planning activities.
10. Documentation. From a strictly administrative perspective, tracking, coordinating and managing the documentation involved in family wealth management is a Herculean task. FOs are able to maintain the family’s document inventory, including trust paperwork, tax documentation, summaries and ownership of major assets, family governance statements and any other documentation family wealth management generates.
In addition to these 10 core services, FOs often manage new business acquisitions and oversee the negotiation process; advise family business boards of directors; supervise the purchase of real estate; oversee attorneys and others involved with the families; and mediate family member conflicts. In short, the services an FO can provide are dictated by what the family needs.
Just as there are 10 core elements today that summarize the services of most FOs, there are at least eight considerations families should address when selecting a suitable FO model:
1. What services do they provide? Do they address the 10 core elements in some way, or are they specialized, focusing more on investments or administrative responsibilities?
2. How large or small is the FO? Some families may be seeking very hands-on personalized service; others may be looking for an FO to provide general oversight through a more formal, hands-off approach.
3. How does the FO communicate family business, updates, news, investment advice and so on? How frequent are communications from the FO?
4. What’s the cost of service? How does the FO get paid? Is it a direct fee for service, or does the office collect fees based on trades, for example?
5. What’s the management structure of the FO? What are its management challenges? Does the office attract and retain a wide range of professionals and resources? Does it coordinate and integrate activities for the benefit of its families? Has it built sustainable entities?
6. Who owns the FO? What’s the mission statement of the FO? Are its goals and mission in alignment with the family’s goals and mission?
7. Where’s the FO located? Is it a small office with only a few locations? Or, is it a global company with offices around the world, offering personalized services to HNW families in a given region?
8. Is the objective in its approach? Is its operational focus in the best interest of the families it serves, or is its driving principle to generate revenue for its ownership?
All businesses face challenges that force them to examine and refine their business approaches to better serve their customers, and the FO is no different. In a 2011 Family Wealth Alliance Single Family Office Study,1FOs were surveyed to identify their biggest challenges. One hundred percent of the offices surveyed identified managing generational and FO transitions as their biggest challenge. Family cohesion and governance also scored high. Preserving wealth ranked relatively low, and liquidity and cash management ranked at the bottom of the list. It’s becoming more common for large SFOs to reach out to other firms to assist in communicating the values of the family and transitioning the business or assets to the next generation.
Wealth Advisory Firm Options
With a clear understanding of what services an FO can provide and considerations to ponder when choosing an appropriate FO model, investors must still analyze the business models of service providers and determine which best fits their needs and preferences. Three primary options are available: advisors, distributors and manufacturers.
Advisors. The role of an advisory firm is just that: to serve as an objective advisor. They agnostically source products from outside suppliers. The advice they provide is independent of products. Advisory firms are paid directly and only by the investors. Their value proposition hinges on objectivity, expense optimization, risk management, access and quality of advice. FOs follow an advisory business model.
Distributors. They are financial supermarkets. They exclusively distribute products for their institution and others. Their advice is bundled around the investment products they offer. Distributors are paid via wrap fees, asset management fees, trade fees and the like. Similar to advisory firms, they count quality of advice as part of their value proposition, as well as product variety, depth, access, brand and size.
Manufacturers. They offer investment management services and primarily distribute a proprietary product. Manufacturers receive payment from asset management fees and imbedded, product-based performance fees. They sell their services based on the quality of asset management capabilities, research, brand, size and performance.
Five Core Principles
Wealth management decisions carry an inherent risk for all investors, but especially for HNW families that require the services of a range of providers.
Regardless of the wealth management/advisory firm a family selects, it’s in the family’s best interest to ensure that, above all, the firm adheres to the five core fiduciary principles of wealth management:
1. The client’s interests are put first.
2. The firm acts with prudence—with the skill, care, diligence and good judgment of a professional.
3. The clients aren’t misled—they receive a full and fair disclosure of all important facts.
4. The firm makes every attempt to avoid conflicts of interest.
5. The firm fully discloses and fairly manages, in the client’s favor, unavoidable conflicts.
Any family that follows these guiding principles when assessing wealth management options will be well positioned to objectively and carefully analyze services for the best interest of the family.
—The views expressed are those of the GenSpring representatives and are subject to change. They are shared for educational purposes only, and shouldn’t be considered as investment advice or a recommendation for any particular security, strategy or investment product.
1. The Family Wealth Alliance Report (2011).
Just a few years ago, a secure Internet presence meant firewalls, anti-virus programs, encrypted passwords and being savvy enough to protect yourself from the occasional off-shore scam artist. Today, a secure Internet presence is defined by an individual’s ability to influence what the web says about him, his family and his business relationships. HNW individuals disproportionately face online reputation challenges because they’re high profile and easy targets. In many ways, they have the most to lose, as they’re tasked with protecting a hard-fought family legacy.
HNW individuals have always been the subject of unwanted press coverage and media attention, but the stakes are much higher now that anyone can play the part of publisher, instantaneously and costlessly broadcasting to thousands of sites and millions of people whatever pseudo-information, outright lies or (worse still) true private facts he wishes and achieving an unprecedented level of information permanence. Newspaper stories used to come and go, accessible only in musky archives or on microfiche; not so with Internet content, which has the uncanny ability to proliferate and then remain forever accessible.
As the web is our primary source for due diligence on friends, employees, business partners and romantic partners, every HNW individual will be affected by these trends. HNW individuals will be defined online by the unfortunate things that happen to them—when they’re named in a lawsuit simply because they have deep pockets, forced to deal with a disgruntled employee or caught off guard by their children’s indiscretions. And, unless they manage these risks and reshape how they’re defined on the web, they’ll feel the impact on their family’s friendships, employment prospects, business transactions and personal lives.
Online reputation risk must be managed proactively, not reactively, as it’s very difficult to “unring the bell” once damage has been done. The building blocks of proactive online reputation management are: 1) ongoing risk evaluation, 2) targeted campaigns to remedy problems as they arise, 3) a family contract on privacy management, and 4) a pre-defined crisis response plan that can guide a family when a true crisis hits.
Ongoing Risk Evaluation
HNW individuals and their families must contend with three categories of risk. We call them the three Ps: privacy, prestige and profession. Take a moment to evaluate your client’s exposure to these risks on a scale of 1 (protected) to 10 (vulnerable) and see how he fares. As you do so, catalog the sources of vulnerability you find, so that you can evaluate which remedies (described later) are the most appropriate:
Privacy risk. Privacy risk entails the publication of information by others or by oneself that shouldn’t be shared. There are several reasons HNW individuals wouldn’t want such information online. Sometimes, HNW individuals just don’t want anyone to know some details of their lives and activities for privacy’s sake. For example, they may wish to keep their work and school history, personal photos, sexual history or orientation, romantic relationships or political contributions, private. (Note that political contributions are public information by law, but this doesn’t necessarily mean they have to appear at the top of the search engine listings.)
There’s also information that, if acquired by the wrong person, could pose physical security risks for your client or his family members. This information includes your client’s addresses, phone numbers, travel plans, school, exercise routines or children’s photos—anything that could empower a stalker, kidnapper or thief. A HNW individual may sometimes provide this information unintentionally as a consequence of participating in social media sites with location-based features, such as Foursquare or Facebook Places. At other times, the information finds its way onto websites that share this information in the supposed interest of “transparency.” Yet, the public’s gain can often be the HNW individual’s security risk.
Online access to other vital personal information—such as Social Security and driver’s license numbers, place of birth or mother’s maiden name—can make it easy for criminals to fraudulently access a person’s bank accounts and wealth. It can also enable identity theft. Imagine your client trying to board an airline only to find that his driver’s license has been flagged as a security risk or applying for a time-sensitive loan only to find out he has unexpectedly poor credit, because someone cobbled together enough information online to impersonate him financially. “Assessing Privacy Risk,” p. 42, has questions to help your client determine what details of his life are on the Internet and may cause problems.
Prestige risk. The dissemination of information that poses a threat to a HNW individual’s reputation can be hard to prevent and difficult to remedy. Even a public image that’s been cultivated over the course of many years remains tremendously fragile online. One negative posting can be enough to undo a carefully crafted image and rapidly deplete public goodwill.
Information on the Internet that poses prestige risk can range from public comments on a news article to photographs that portray an individual or family engaged in activities that are incongruous with their desired reputation. Common sources of prestige risk include mentions of gambling, substance abuse or sexual dalliances and, in particular, those that have been documented in some manner. Prestige risk often tarnishes a family’s legacy and, for business leaders, can even impact stock prices and the willingness of business partners to continue their relationship.
Particularly troublesome are legal actions or cases linked to an individual or his family members. Regardless of the outcome and/or veracity of the claim, legal claims are public record and are often widely distributed by news aggregators and posted on court and governmental websites, making them nearly impossible to expunge from the web.
Michelle Jordan, a reputation management expert who works with HNW individuals, notes that:
In today’s society, wealthy individuals take on a sort of celebrity status. They may wish to keep a low profile, but it is increasingly difficult to escape scrutiny. And once something negative hits the Internet—even if totally unfounded—it can be very hard to reverse its impact.1
For example, one of Jordan’s clients was wrongly accused of fraud and subject to a lawsuit. Though the suit was ultimately dismissed, the word “swindler” still shows up in search results because a local newspaper picked up the story. Not surprisingly, that paper hardly acknowledged the suit’s eventual dismissal. “Assessing Prestige Risk,” this page, offers some questions to help your client determine how his online presence may affect his reputation.
Professional risk. Professional risk entails negative Internet content arising from business dealings or any other content that could negatively impact an individual’s career or career potential. HNW individuals are often named parties in business-related lawsuits simply because they have deep pockets and can be casually connected with an alleged wrongdoer, not because of any actual involvement in wrongdoing. These individuals also make easy targets for disgruntled employees and business acquaintances, who turn to the web to air dirty laundry. In one recent case, an unhappy former employee not only skewered a firm’s managing director, but also his wife and teenage children.
Negative postings along these lines can severely impact an individual or his company’s ability to work. They erode existing business relationships and interfere with new customer acquisition. Consider, for example, a dentist who looked online after his practice slowed by 30 percent. He discovered that a single posting on a dentist review website, alleging that he used substandard tools and that his office lacked hygiene, was turning off customers. He was able to trace this posting to a disgruntled former customer who had received excellent service, but, ultimately, refused to pay numerous bills and who had turned to the web to vent her frustration. Unfortunately, this is an increasingly common scenario across a broad array of professions. “Assessing Professional Risk,” p. 44, includes questions to ask regarding how your client’s business or business activities are portrayed on the Internet.
Family offices and HNW individuaIs should begin to address the issue of Internet risk by taking an inventory of existing or likely threats to privacy, prestige and profession. Using the assessment criteria above, they can get a good idea of where the greatest risks lie for their particular situation. Once this foundational understanding has been developed, it’s time to consider three possible remedies: removal requests, optimization campaigns and decoy campaigns.
It’s often wise to engage a professional firm to advise on which of these approaches would be the most appropriate and effective to pursue, but here are the highlights of each:
1. Ask for removal. The simplest approach may prove the most effective. A HNW individual can ask a poster, website or Internet service provider (ISP) to remove private, untrue or inappropriate information.This may be a sound strategy when the poster of the unwanted content published it inadvertently or is a friend or colleague who simply used poor judgment in sharing the information. It’s also a good approach when the posting is in direct violation of an ISP’s policies and the identity of the concerned party requesting removal can be obfuscated by constructing a request that’s in the interest of multiple parties.
However, a removal request can backfire if not framed properly. It may draw the ire of the original poster, who may respond by posting even more damaging content in reaction to a perceived attempt to censor or bully. If the removal request itself is posted online by the receiving party, as often occurs, it may also serve to make the requesting party appear manipulative and overly concerned with his reputation. Online reputation management firms can serve as intermediaries to frame a removal request and to sidestep these pitfalls, yet, in most cases, we don’t recommend this approach.
2. Launch an optimization campaign. Optimization campaigns aim to demote negative online content by promoting alternative content that presents a HNW individual or family in a positive light. The idea is to create new, positive content consistent with the desired story or brand positioning, post it on various websites that are designed to be picked up by search engines and enhance its position in search engine rankings through link building and other methods. The result is to make it easier for people who search for information about a HNW individual or his family to be presented with positive information, rather than the unwanted or negative content. Research has shown that the vast majority of web searchers don’t look beyond the first three pages of search results.2 Populating these first three pages with articles on business achievements and philanthropic works, for example, can serve to bury unflattering materials.
Individuals can impact their own online profiles by leveraging personal or business websites and social media profiles, but results will vary based on the uniqueness of an individual’s name and the amount of legacy content already online. For more complex cases, an online reputation management firm can help a HNW individual transform his online footprint and search engine listings.
Even individuals and families who currently don’t have negative content to contend with should consider an optimization campaign to help shape their story online and to erect a defensive bulwark against negative postings that may arise in the future. Companies regularly seek to shape what the web says about them to protect their brands. Why shouldn’t individuals do the same, especially those who may be forced to deal with unflattering content simply because of their wealth or family history?
3. Manage a decoy campaign. Decoy campaigns are a controversial but emerging trend in the online reputation management industry. They involve confusing the casual searcher by populating search engine results with competing and conflicting information to limit the impact of unwanted data that’s reached the Internet. These campaigns may be appropriate when personal information such as Social Security numbers, home addresses or telephone numbers are exposed. Consider, for example, a high profile HNW individual with a unique home that receives extensive press coverage disclosing the address. One approach is to create a number of web articles and listings relating to the home that contain decoy addresses, so that a prospective kidnapper, thief or other bad actor would be hard pressed to know which address was real. While this approach may detract from the veracity and transparency of the Internet, it’s, perhaps, a necessary evil for the sake of privacy and security.
Family Contract on Privacy
The remedies described above are largely reactive, applying primarily when a problem already exists. As a proactive measure, HNW individuals and their families should consider establishing a social contract that governs what family members may reveal online about themselves and the family. HNW individuals and their families are often their own worst enemies in creating unflattering content online, particularly through their use of social media sites like Facebook.
Some of the elements that should be specified in the contract as inappropriate for sharing online are: birth year and place, vacation plans, home address, confessionals, password clues, real-time location and risqué or compromising photos. Moreover, HNW individuals should be counseled away from jumping into social media because “everyone is doing it.” A family’s web presence is simultaneously an opportunity to bolster or undermine a family’s image. Those who don’t have a full understanding of how to control it should refrain from engaging in it.
If family members are going to engage in social media sharing, they need to know how to configure their settings on every social media website (Facebook, LinkedIn, Twitter, Tumblr, Flickr, etc.), blog or web forum they participate in to mitigate risks to privacy, prestige and profession. For example, they should adjust Facebook settings to share photos, videos, posts and personal information with friends only and uncheck the box that makes their personal profiles searchable by online search engines. In certain circumstances, individuals should consider using avatars or pseudonyms instead of their real identities in building a social media profile.
“Framework of Activities,” p. 46, details our suggestions for how to use social media, or whether to use it at all, based on individual or family desires for Internet exposure.
Crisis Response Plan
In addition to creating a social contract, each family should codify in advance how it will handle an online public relations crisis should one arise. Best practice is to create a crisis response plan that specifies:
• Who, if anyone, in the family will talk to the media or engage the threat online and, if appropriate, what external party will advise the family or even release statements on its behalf;
• What will be the family’s standard talking points; and
• Which online venues will be used to counter the threat to the family’s reputation.
Every HNW family should have such a plan in place. It’s the best way to ensure a quick response while avoiding additional strife at what may be an incredibly sensitive time for the family.
HNW individuals and their families have much at stake when it comes to online reputation, but many are blazing the trail by successfully addressing risks to privacy, prestige and profession. They have done this by using social contracts to manage their behaviors online, establishing crisis response plans that prepare them to react quickly to reputational threats and posting and optimizing positive content consistent with their story and core identity.
Family offices and their advisors should begin by assessing and cataloging their clients’ risk profiles and areas of vulnerability. Based on what they find, they can reach out to specialized advisors, who can help craft a strategy to address areas of vulnerability and manage family behaviors on the Internet.
The task of managing an online reputation for a high profile, HNW individual or family is daunting, but worthwhile. Proactive management of their online presence is the foundation upon which the family’s legacy may rest for generations to come.
1. Phone interview on June 11, 2012 between David S. Ascher and Michelle Jordan.
2. iProspect/Jupiter Research/NDP Study, 2009.
Create a foundation for a disciplined long-term strategy for a variety of market conditions
As we know too well, the past few years have presented a challenge for investors. The financial crisis and recession of late 2008/early 2009 have given way to a prolonged upward trend in the domestic equity markets and, along the way, significant volatility. This environment has led some investors toward behavioral temptations, for example, abandoning a diversified portfolio in exchange for greater risk with higher levels of equity exposure. Others, alarmed by the ever-rising stock market, are taking their chips off the table altogether.
A key element in avoiding these behavioral temptations in building a sustainable investment strategy is to “invest with purpose.” The first step? Know what you want to achieve with the wealth.
Know the Goals
Setting clear objectives is central to a goals-based investing approach. This dynamic and ongoing process delivers immediate and tangible benefits. The process:
A customized portfolio asset allocation appropriately tailored to meet an investor’s prioritized goals can be a critical determinant of success.
I begin this final letter of the year with some news — this month I will be retiring from GenSpring Family Offices. As many of you know, I sold my company to GenSpring six years ago and since then have enjoyed a great relationship with the firm and its leadership teams. Through my most recent position as Managing Director, Western Region, I have seen GenSpring grow and thrive and it has been fun being a part of this success. I know for sure all of our families, many of whom have been with us for many years, will remain in excellent hands, supported by equally excellent resources and services.
GenSpring organized a wonderful retirement party for me earlier this month, graciously hosted at the home of Greg Burden and Sherri Bovino in Orange County. I was deeply touched by the many clients, good friends and colleagues who joined in the celebration. My thanks to so many of you who were able to make it.
So what next . . .? First, is taking time off to spend with my family. I will also be thinking about this next phase of my life. While my plan includes continuing to work in some aspect of the family office space, it is unlikely to be on a fulltime basis. There are still roses I have yet to smell!! I will, of course, keep you posted.
All in all it has been an exciting month. What a surprise and honor at FOX’s Fall Forum to be one of three recipients of the Family Office Exchange (FOX) Founders Award. My co-honorees were Christine Galloway, Dirk Junge and Loraine Tsavaris. This is only the second time in its 25-year history that FOX has presented its Founders Award, making it even more special for me.
November also saw our second annual two-day Women’s Wealth Retreat, organized by the UC/Irvine Paul Merage School of Business, Center for Investment and Wealth Management. I Co-Chaired the Women of Wealth Retreat with Victoria Collins. It was a great success with three times the attendees of its first year. Our keynoters included Author Arianna Huffington, Anthropologist Dr. Helen Fisher and Aging Expert Dr. Kerr Burnett interspersed with lively panels and interactive discussions focusing on diverse aspects impacting women and wealth.
For the next issue of Trust and Estates I have written an article titled, “Investing with Purpose.” As the title suggests, it speaks to how today’s families want to invest and some of the issues attendant to their choices. If you don’t subscribe to the magazine and would like a copy, just email a request to Heather Perry at email@example.com and she’ll get one to you.
Now for my year-end update on the death tax. With the increase in the Republican’s House majority to approximately 250, after all run-offs, and 8 or 9 additional seats in the Senate, passage of death tax repeal/reform should be easier. (A bi-Partisan effort is still required.) Senator Paul Ryan(R)(WI), always a Repeal supporter, is now hairman of the Ways and Means Committee and we plan to work closely with him. Congressman Kevin Brady of Texas is looking for a Democrat to co-sponsor a repeal bill to be introduced on tax day, April 15, 2015. The Policy and Taxation Group is helping in the effort. The challenge then will be to get on the agenda for both a House and Senate vote. The Policy and Taxation Group also helped draft and orchestrate a letter from the Senate Republican leadership to the IRS – its purpose being to discourage the IRS from changing regulations to eliminate limited partnership discounts. Our efforts throughout will continue. In closing, I send each of you and all of your families my very best wishes for a very happy holiday season. I look forward to staying in touch and you can be sure I will.
Patricia M. Soldano
Managing Director of Client Services
Presentation was a highlight of the 25th Anniversary FOX Forum
Family Office Exchange (FOX), a global membership organization of private family enterprises, their family offices, and key advisors, bestowed the FOX Founders Award on four family office industry pioneers at the 25th Anniversary FOX Forum in Chicago on October 29, 2014. The honorees were Christine K. Galloway, President and CEO of Okabena Company, Dirk Jungé, Chairman of Pitcairn Company, Patricia M. Soldano, Chairman – Western Region at GenSpring Family Offices, and Loraine Tsavaris, Managing Director at Rockefeller & Company.
In presenting the awards, Sara Hamilton, Founder and CEO of FOX, commented, “Each of these individuals is the epitome of our best industry leaders, but in very unique ways. They were all pioneers in changing the wealth management industry to better serve the ultra-wealthy client. ”
The FOX Founders Award has only been presented once before– in 2009 to James E. Hughes, Jr., at the 20th Anniversary FOX Fall Forum.
Chris Galloway has worked for the Okabena Company, a single family office in Minneapolis, for 21 years. Retiring at the end of the year, she says, “Nothing is more meaningful than my role as ‘trusted Advisor’ to multiple generations of family members.”
Dirk Jungé, a fifth generation Pitcairn family leader, is an outstanding example of a family leader who has served as a family steward for over 40 years.
Pat Soldano has worked tirelessly for the past 20 years campaigning for elimination of the death tax based on her experiencing the devastating impact of estate taxes on families in her advisory practice. She founded The Policy and Taxation Group to educate lawmakers on the issues and impact of estate taxes on families.
The final recipient, Loraine Tsavaris, has been an advisor to families and to aspiring wealth advisors for more than 40 years. An strong supporter of FOX conducted research, she participated in the first FOX Thought Leaders Summit in 2004 about Conflicts of Interest and in every Thought Leaders Summit since.
Family Office Exchange(FOX) is the premier global member network for wealthy families and their advisors who are pursuing best practices for optimal management of their family enterprise and their wealth and legacy. The community includes over 8,000 sophisticated family leaders and advisors from 760 organizations in 20 countries who utilize FOX’s resources each year for advice, networking, education, and comparative metrics.
FOX is headquartered in Chicago with offices in New York and London. For more information about FOX, call 1.312.327.1200 (The Americas) or 44.(0)20.7520.9443 (Europe, Africa, Asia/Pacific) or visit www.familyoffice.com.