Chartered Wealth Manager Content

CWMChartered Wealth Manager

CHARTERED WEALTH MANAGER CONTENT

The program contains 2 Levels comprising of 10 Units in each level.
Level – 1 – Foundation Level
Unit 1 Overview of Indian and Global Financial System
Unit 2 Concept of Wealth Management
Unit 3 Measuring Investment Returns in Wealth Management
Unit 4 Life Cycle Management
Unit 5 Investment Vehicles of Wealth Management
Unit 6 Managing Investment Risk in Wealth Management
Unit 7 Investment Strategies of a Wealth Manager
Unit 8 Intergenerational Wealth Transfer & Tax Planning
Unit 9 Role of Wealth Management in Banking
Unit 10 Legalities in Wealth Management
Level – 2 Advanced Level
Unit 1 Advanced Concept in Wealth Management
Unit 2 Relationship Management by a Wealth Manager
Unit 3 Use of Behavioral Finance in Wealth Management
Unit 4 Wealth Management Planning
Unit 5 Equity Analysis
Unit 6 Portfolio Management Strategies
Unit 7 Loan & Debt Management
Unit 8 Use of Alternative Products in Wealth anagement
Unit 9 Real Estate Valuation and Analysis
Unit 10 International Taxation and Trust Planning

There are 2 Exams one for level 1 and the second for level 2

For more details visit the website:
www.aafmindia.co.in
and fill the contact us form there.

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Wealth Preservation by Single Family Office

Wealth

Wealth (Photo credit: Patrick Streule)

Peasants driving out a rich family from a house.

Wealth preservation is one of the most sought after and value added segments of family office services, as retention of net worth is paramount in most family priorities. Wealth preservation is the holistic approach adopted by family advisors to achieve the common goals of asset protection, manageable structure, minimization of risk, and magnification and eventual transition of wealth.

While most families begin their foray into the business world with the goal of amassing as much net worth as possible, many are surprised that upon reaching a level of success that it can often be more difficult to hold on to wealth than it was to earn it. With the increasing complexity of wealth, and the need to coordinate professional activities, the family office has evolved as the central advisory source.

An important subset of wealth preservation is the field of asset protection. Due to its popularity, other planning areas have begun to use the phrase, sometimes distorting its definition. Some use “asset protection” to sell casualty insurance, lower risk investments, prenuptial agreements, wills, and many more tangentially related areas.

At its core, asset protection is the use of legal entities, structures, and strategies to make assets difficult or impossible for a potential creditor to reach.  Asset protection planning often has strong estate planning benefits but does not involve a specific product, insurance, or tax ideas. The aim of asset protection is to mitigate the risk to family net worth posed by creditors, predators and divorce and works best when coordinated with a comprehensive wealth preservation strategy.

Sources of Liability

Preserving net worth is not new. The topic is at the forefront of many family’s planning goals as litigation in the United States has dramatically expanded. Liability stems from areas where the family and advisors may not have known an issue was developing. Some of the fastest growing areas of litigation are less obvious – social liability (parties, events, guests), employment practices (discrimination, harassment, noncompliance), empowerment (actions which “aided” the actual wrongdoer), management (director, officer, advisor). Many are left wondering how the court system and jury allow seemingly tenuous cases to produce seven figure judgments. Lawsuits typically follow asset ownership rather than actual wrongdoing as every plaintiff seeks “deep pockets” at the table. Asset protection aims to remove the deep pocket target and make one unattractive to a creditor.

Timing and Effectiveness

Managing risk occurs before a claim is made. Asset protection is effective against future creditors and can be penetrated by an existing creditor one knows of or reasonably should have known of. Insulation can still often be achieved after the fact, but is limited in application and becomes significantly more complicated.

Integration

The most effective planning involves integration of overlapping areas that affect a family net worth; estate planning (incapacity, death disposition, reduction of probate, reduction of death taxes, guardianship, managing inheritances), tax planning (leverage, income tax shifting, maximum use of transfer credits, coordination of federal/state death taxes), business planning (exit strategy, key person retention, company structure, perpetuation), insurances (shifting risk, funding tax burdens), asset titling, entities, etc. to be arranged and implemented in an easy to live with fashion.

Concepts that are familiar in investment planning are integral in asset protection as well; segregation and diversification. Few manage assets in one investment house or in one class of assets. Similarly, asset protection is not one technique or one entity, rather it is the use of combinations of strategies to achieve insulation, tax efficiency, and control.

Risk Shifting

The way we own and manage assets is directly related to the ability of a court and plaintiff to attach them.  We often see families shift asset ownership to a spouse (who perhaps does not work or has a lower risk profession), children, or other family members. In effect this is not reducing risk in as much as it shifts risk. The non-working spouse owning the home shifts the risk to the social events, household help, and guests of the home. There are still the car accidents, libel, divorce, and other potential actions against that family member. If there is a difference of opinion, the asset earner does not have direct control, which often creates family rifts.

Corporations

Corporations have been popular for a long period of time but serve a very limited purpose. The common perception is that corporate assets are insulated. To a large extent this is not the case. A corporation’s assets are fully reachable by a plaintiff with a claim against the corporation. A corporate entity is intended to shield shareholders from personal liability, however, many times the corporate veil can be pierced and personal liability attaches. There are more powerful and flexible choices for a company.

Insurance

Liability insurance is a common tool and a useful one. However, despite the many items the agent advises it covers, the list of risks it does not cover is far longer (i.e. divorce, employment practices, acts of adult children, intentional torts, business disputes). Diversification becomes apparent “liability coverage is a component – but should not be seen as the only defence.

American Academy of Financial Management, AAFM, offers the Chartered Wealth Manager , CWM (R) ,Designation program in Wealth Management including Private Banking, Asset Management and Family Office Management. Visit www.aafmindia.co.in for more details.

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Press Coverage of AAFM India’s Launch of CWM Designation Program in India!!!!!

Press Coverage of AAFM launch of Chartered Wealth Manager Designation in India.

For more details visit www.aafmindia.co.in

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Job Responsibilities of a Private Banker

The objective of private bankers is to provide a more personalized level of service to wealthy clients than is available to typical customers at a commercial bank. The business has always catered to the world’s wealthiest people. Over the last several years, as the ranks of the wealthy have steadily expanded, many banks have refined their offerings to serve three distinct gradations of wealth. The main role of a private banker is to help clients manage their money. Traditionally, this involves helping them invest wisely while avoiding risks that might reduce the value of their assets. Private bankers also offer tax planning and pension advice, help clients develop a strategy for philanthropy, and advise them on estate planning. In one subset of the sector known as “Family Offices,” the bankers also perform tasks that range from screening solicitations for charitable contributions to making sure the client’s bills are paid on time.

Key Responsibilities:

• Sustaining healthy relations with the HNWI clients.

Managing marketing of Private Banking Products/ Services and ensuring attainment of business targets.

• Providing advisory support to clients on:

- Complete home office and Trust/ Foundation structures.

- Range of products like Equity (Direct/ Options), Alternate Investment Products (Swaps, DCI’s, NDF’s, etc.), Debt Products (Bonds), Hedge Funds, ETF’s, Mutual Funds as well as Currency Strategies.

- Specific market directions with regard to specific geographies, as per their business interests.

-Suggesting suitable investment opportunities to the clients.

• Providing vital updates with regard to KYC on clients and furnishing detailed reports to Credit/ Compliance Teams

• Driving the set up of the Private Banking initiative including institutionalization of processes for the cross sell initiative with Retail Banking & Corporate Banking.

• Providing advisory support to clients on direct equity, debt and structured products. Liaising with large corporate clients for debt syndication and structured equity advisory (IPO, QIP and Private Equity).

• Expanding the customer base and achieving product sales & revenue targets for private banking and investments.

• Building investments proposition for consumer banking domain and creating a financial planning platform for investment advisory services.

• Generating leads from existing clients for GB (Global Banking). Providing appropriate solutions to clients for helping them meet their corporate finance/ structured finance requirements.

Traits of a Good Private Banker:

A successful private banker needs an outgoing, service-oriented personality, plus the ability to carefully listen to clients. It’s a role best-suited to people who can observe other individuals and come to understand their needs. Their real talent is connecting with people who may have a lot of their wealth tied up in a fairly narrow activity, such as a successful family business, or who can be very demanding. In short, good people skills help.

As the array of potential investment products widens, the job of a private banker is becoming increasingly complex. So, private bankers need an understanding of financial products from basic stocks and bonds to financial derivatives, private equity and hedge funds. In most cases, the lead banker – who manages the direct relationship with a wealthy client – will be supported by a staff of experts who can address specific questions or needs as required.

 Key Skills & Qualities required to be a good Private Banker

• Discretion and trustworthiness

• The ability to build strong relationships with discerning clients

• Knowledge and understanding of financial markets

 Roles & Career Paths of a Private Banker

If you work as a private banker, you can expect to focus in one of three areas: investing for existing clients, building relationships, or managing back office functions such as human resources and accounting. People working on the investment side either invest their clients’ money or offer detailed advice to help clients make their own decisions. They are typically product specialists who are expert in a particular asset class. People working on the relationship side are essentially salespeople who spend their time building connections with clients and selling the bank’s services. This can involve a lot of traveling and close contact with interesting, unusual, and demanding people. When a relationship banker has established a client’s needs, investment specialists are brought in to put more detailed solutions together. For clients who are very wealthy, the relationships are often entrusted only to experienced executives.

A decade ago, most private bankers combined the investor and relationship role. In some organizations, they still do. But in most banks, investors and relationship managers are now separate – another sign of the industry’s growing complexity. Firms such as Goldman Sachs, HSBC and UBS run graduate training programs for private bankers. If you don’t find a place in one of those, it’s often possible to move into private banking if you have a background in corporate finance or, more particularly, fund management.

Having an MBA or majoring in business isn’t considered critical for a private banker. In fact, a diverse background can be an asset, because clients can differ considerably in their needs and personalities. Certifications like “Chartered Wealth Manager®” (CWM®) help in acquiring skills and attitude necessary to succeed in this enticing field with lot of career opportunities.

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Career Prospects for Wealth Management in India

Strong GDP growth, a promising economic outlook, high savings rate and a relatively young and rapidly-increasing population of wealthy Indians, both in terms of absolute numbers and geographic diversity, will provide the fuel for the dream-run of the wealth management sector in India.

Wealth Management is both about wealth preservation and creation. In the future, Wealth Managers must be more dedicated to wealth structuring and wealth planning. Many private banks have already laid the foundation in working toward that goal, but it is a journey requiring significant commitment and innovative thinking. In a fast-growth environment where regulatory reforms continue to open up new investment opportunities and investors become more sophisticated in terms of capital markets knowledge, successful private banks will be those that are at the forefront of new product trends, have invested in asset allocation and portfolio management technology and have invested in their people.

A successful wealth management professional will be the one who quickly equips himself with the right qualification and invests his time on self-grooming to be able to make the most out of the opportunity in private wealth management which is unleashing now.

To cater to the growing HNI, UHNI, Expatriate & NRI population, India currently needs close to 1,00,000 qualified wealth managers. In other words, a student or a professionals aspiring for a career in private banking and wealth management has 1,00,000 reasons to join a premier certification program like Chartered Wealth Manager (CWM®). The biggest challenge confronting the Indian wealth management industry is people. As a nascent industry there is a restricted resource pool. At the same time the opportunities in India are luring ever-more wealth management organisations, therefore increasing the demand for people with relevant qualification. This bodes very well for the young professionals who are aspiring for a career in wealth management, especially in the light of most of the financial services companies scaling up their wealth management verticals. Graduates with a professional certification in wealth management like Chartered Wealth Manager (CWM®) and preferably with some relevant experience through a regular job or internship are well-placed to bag coveted jobs in this sector.

Experience ( in years)

Positions CTC Range Role

0-4

Wealth Advisor/ Relationship Manager Rs. 4- 6 Lakhs + Incentives Individual

4-8

Senior Wealth Advisor/ Senior Relationship Manager/ Private Banker Rs. 6-18 Lakhs+ Incentives Individual

8-12

Team Leader/Private Banker Rs. 18-24 Lakhs + Incentives Team-handling

12-15

Regional Head Rs. 24-40 Lakhs+ Incentives Team-handling
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Who should pay on the first Date?????

Our First Date ♥

Our First Date ♥ (Photo credit: Scott Barlow)

 After five years of marriage, life happened and my friend found herself single again. When some friends set her up on a date, it was thrilling. Suddenly she became aware of everyday occurrences that she had completely lost sight of for years.For example, did you know that sometimes when people walk down the street, they make eye contact with strangers they find attractive.she had totally forgotten!

She also forgot about all the complications associated with dating, including the dreaded who-pays-on-a-first-date conundrum. But when this time last year a perfectly pleasant round of beers wrapped up with Kevin (or was his name Sean? I forget), it seemed obvious who would pay the bill.

It’s the classic little dance: The woman makes a perfunctory offer to pay, knowing full well that the man will get the check. Instead, Sean (or was his name Kevin?) casually suggested we split the tab, and that’s what they did.

And she was miffed! , unless she misread something, She thought “I’m pretty sure you found me to be smart and charming. So pick up the bill, Kevin/Sean/whatever your name was”!

But I hesitate to share that thought here. After all, I fall into the ranks of educated, professional urbanite, left-leaning and moderately feminist. In other words, I make my own money and am looking for a guy who digs my mind and wit. So where do I get off expecting chivalry based on the assumption of my economic inferiority and need to be cared for? (Thanks a lot, Mom!)

Despite plenty of logical explanations of why I should buy my own drink, I still couldn’t shake the notion that the guy pays for the first date. So I decided to find out what’s going on in the dating world—and why we pay (or don’t) the way we do.

First stop: the numbers

A recent Glamour magazine online poll of nearly 3,000 women found that 23 percent of respondents let the guy pay outright, 13 percent let him pay but take care of the tip, and 45 percent do “the reach” (my personal favorite). The remaining either treated the guy, or insisted on splitting the bill.

In the U.K., 25 percent of women thought men should pay on the first date, and 58 percent expect to split the bill, according to a survey by an online bank. Of men, 55 percent expect to pick up the tab, and 29 percent presume they’ll split the tab. But I don’t really identify with most Glamour readers, and I’m not really clear on how my life parallels that of my sisters across the pond, so I asked my friends and a few experts.

What the experts say

The handful of therapists and relationship journalists all said the same thing: Guys should pay for the first date and probably a few dates after that. The reason (feel free to skip ahead if you’ve taken a women’s studies class in the past 40 years) is that since the dawn of time, men were responsible for satisfying the material goods for the family, and women were responsible for creating a nurturing nest for the family. We’re hardwired that way, so it is best to just accept these roles and make them work, these folks say.

The most insightful expert conversation was with Dr. Carole Lieberman, a Los Angeles– based psychiatrist who wrote Bad Boys: Why We Love Them, How to Live With Themand When to Leave Them and most recently, Bad Girls: Why Men Love Them & How Good Girls Can Learn Their Secrets. Lieberman’s position on why men should treat on the first date: “The same reason men have different physical characteristics,” she says. “There are certain psychological and biological factors that have created long-standing traditions, and those are the natural way the sexes should treat each other. The man should be the knight, and the woman should be the princess. People say that sounds quaint and old-fashioned, but fairy tales come from the collective unconscious of society.”

That point pained me in a special soft spot—that spot where I fail to understand why my 4-year-old is among the legions of little girls obsessed with Rapunzel, Snow White, and Ariel despite her mother’s thinly veiled, vitriolic loathing of all things princess. But I digress.

Lieberman went so far as to suggest that men who do not pick up the tab are telling their date that they are not only uninterested in them, but that they are emotionally cheap. “If he pays on the first date, that is a good indication he will be generous with his love and attention in a relationship,” she says. And I can tell you as someone who writes and thinks about personal finances all the time, there’s a direct link between how each of us treats money and the depths of our souls.

So I wondered, “What do everyday people think about the matter?” I informally asked people I know and conducted a scientifically precise Facebook survey (otherwise known as a discussion) on the topic.

What you say

Most everyone agreed that the guy should pay on the first date, but women were quick to point out that the asker pays—and that it’s polite to do “the reach” for the bill, feigning an attempt to pay despite zero intention to do so. The guys all agreed they should pay.

“Any guy who doesn’t at least offer to pay for a first date has no class in my book,” says my former newspaper colleague Ray who has been married for a bunch of years to a progressive, professionally successful woman. “Any girl who insists on paying for both her and the guy on a first date would probably also demand that he only pee sitting down.”

Ray added that guys have a financial obligation to pick up first-date tabs since men continue to make on average more money than women. “Women are not likely to become totally equal with men in earnings until men start having and nursing babies, too,” he says.

Can’t argue with that. Yet one guy I went out with later told me he found a whole lot wrong with that. After being married for nearly 30 years, Larry divorced and found himself going on lots of dates—all of which involved the conventional expectation that he cover the tab. “I was horrified to find that every woman expected me to pay for dinner,” Larry says. “In this day and age of feminism, when women are making their own money, where the hell does the sense of entitlement come from that, ‘I’m not responsible for paying for what I just ate’? I was especially horrified, since 95 percent of the time, I’m sure I never want to see this person again.” His indignity mimicked my doubts about my own conventional leanings on the matter.

What evolution has to do with it

But it looks as if Larry wins that argument, according Robert Glover, a Seattle-based family therapist, dating coach to men, and author of No More Mr. Nice Guy: A Proven Plan for Getting What You Want in Love, Sex and Life. “The storyline of women having to be selective about partners and choosing the best one, and men having to have wealth and status to get the most desirable women, would have only come into play in the last 10,000 years since the beginning of agriculture when people began to own stuff like land, cattle, crops and slaves.”

Glover made another excellent, if obvious, point in favor of guys discreetly handing the server an AmEx at the end of a meal. “Men don’t often think of this, but women tend to spend more money, time, and effort than men in preparing to go on the date,” he says. I dare anyone to argue.

Perhaps the best point of all came from Mike, 43, who lives in New York City but was raised in Alabama. “Guys often complain that it’s not fair to have to always pay for dates,” Mike says. “It’s also not fair that a 60-year-old male CEO can date a 30-year-old female model, but a 60-year-old woman would be very unlikely to get a date with a 30-year-old male model. Accept reality and be a gentleman.”

My conclusion

After concluding my research, I feel confident in my position that women are totally justified in expecting to be treated on the first date. Men seem to appreciate “the reach,” but most of them really do prefer to pay. After you’ve been dating awhile, by all means, work out a way of divvying the cost of dates that makes sense for both parties’ finances and preferences. And guys? Choose a first date that you can afford. THEN PICK UP THE BILL.

As for Larry, he did pay for our wine and burgers on that date after I made a feeble reach, though I sensed a bit of begrudgery on his part. When we proceeded to a bar that night, I paid the tab, and that he didn’t argue irritated me a little. That was six months ago. And though he doesn’t want you to know this, he’s very graciously insisted on picking up most of the checks since.

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All about Single Family Office!!!!

A families and business plans should be mutually supportive, matching the family’s interests and the business’s goals. Key points included
1) family values and business philosophy are the core, foundation
2) strategic thinking affects family commitment and the business
3) establishing a shared future vision for the family and the business is a recipe for success
4) long-term success requires formulating family and business plans

Families are self-governing and complex systems, and as family business and family wealth intersect, these elements form the basis for responsible ownership, and if well managed success into future generations. Promoting family commitment and growing great owners through the management of the family’s wealth enable families to stay together. It is however process dependent – there needs to be a structure which enables this to happen. At times of transition, in addition to considering the needs of the business and the family financial investments, the family can also look at other sources of wealth, and how to sustain and engage them.
As a family business becomes more separate from the family, the family must find a way to manage its multiple investments and business ventures. This entity is often called the Family Office. It may begin as a room in a family business, but over time it may take up independent residence, or affiliate with a financial entity that contains multiple family offices.

A single family office (an “SFO”) is an entity created by a family to manage its investments and financial affairs. As a management entity, the SFO doesn’t itself own family assets. Instead, its job is to administer and manage investment and financial matters for the family and its investment entities, trusts, foundations and other wealth holding vehicles. An SFO typically employs a staff of skilled individuals and may also contract with outside firms to provide necessary services, such as investment advisory, asset management, tax and accounting, legal, risk management, compliance and other wealth-management services.

Single Family Office

Structure of a Single Family Office
An SFO is typically structured as a separate, stand-alone entity, such as a limited liability company (“LLC”), to limit its legal liability and protect the family’s privacy. For tax purposes, the SFO generally is structured as a pass-through to avoid two levels of taxation on any profits generated and distributed by the SFO. (Note that most SFOs, being service-providing entities, are not designed to make a profit, though there are exceptions to this rule.) Many SFOs are structured similarly to hedge funds, with a single management company serving a number of different family investment holding vehicles.
Delaware is a favored jurisdiction for forming domestic SFO entities, because of its well-established body of corporate law and its minimal disclosure requirements.

Ownership of Single Family Office
Ownership of the SFO entity depends on the family’s objectives. In many cases, the SFO is owned by one or more of the family investment entities or individuals whose assets it manages. In other cases, the entity may be owned by a family or non-family executive of the SFO, who typically is deeply involved in management of the family’s financial assets and may receive a fee or carried interest as part of the total compensation package.
Fees charged by Single Family Office
An SFO typically is compensated for its services via a flat fee or payments based on assets under management, and/or a carried interest. As noted above, an SFO is not usually a profit-making venture; the fee income earned by the SFO typically is calculated to cover its costs. Care should be taken in capitalizing the SFO and establishing the amount and timing of fees and payments to the SFO, particularly during start-up, to ensure that the SFO has adequate cash to cover its operating costs. Fees and payments to the SFO made by the client investment entities may not be deductible for income tax purposes by the payor, and so a family setting up an SFO should consult with their tax advisor to discuss options for minimizing the tax “drag” of the structure.

RIA Registration
If the SFO provides investment advice to the family and its entities (rather than outsourcing this responsibility to an investment advisory or investment management firm), it may be required to register as investment adviser or make other disclosures or filings with the Securities and Exchange Commission (the “SEC”). However, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which was signed by President Obama in July 2010, with rules set to become effective in July 2011, eliminates an exemption on which many SFOs have relied to avoid registration with and regulation by the SEC as an investment adviser. Even so, some SFOs may not be required to register with the SEC due to a new “family office” exclusion in the Dodd-Frank Act. Although the SEC has issued a proposed definition of family office, whether this exclusion will be applicable to a particular SFO will not be known until the SEC finalizes the definition, which will not occur until spring 2011 at the earliest. New and existing SFOs should discuss the current state of registration requirements with qualified counsel on a regular basis.
SFOs are unique since they are organized and legally structured as an entity, yet the ‘business’ of the office is to serve the family within the focus the family has set for the office. Some of those focuses include entrepreneurialism, sustaining a legacy, managing global interests, lifestyle management, or a collective long-term investment strategy.

Services offered by Single Family Office


Services provided by SFOs vary widely, and the structure and staffing of the SFO should reflect its specific roles and functions. Almost all SFOs provide investment oversight and reporting services; many also provide accounting and tax advisory, risk management, trust administration, compliance and reporting services to family members and entities. Some SFOs pay bills and manage residential properties and staff for their families. As the family grows and members set up households of their own, the array of services provided by the SFO can become quite extensive and expensive, raising questions about how the cost of such services should be allocated among family members.
Many of the world’s greatest families have seen philanthropy as an ideal way of expressing their values, and celebrating their history. Perhaps the most famous example is that set by John D. Rockefeller Sr., the twentieth-century industrialist, and his son John D. Rockefeller Jr., who in 1913 established their family’s foundation so that they and his descendants might “promote the well-being of mankind throughout the world.”

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What is a Family Office? What are its benefit???

Office Mate

“An old Chinese proverb “The best time to plant a tree (– or build a resilient plan for your family) is 20 years ago. The second best time is today’.”

Family Office

At the top level of private wealth comes a structure called the family office. This is when a wealthy family incorporates its wealth into a separate legal vehicle, sometimes employing in-house staff to manage it, or other times employing external consultants.

A family office acts as a Personal CFO or Chief Advisor to wealthy families, with a dedicated team of professionals who oversee and manage the complete financial affairs of client families.

A family office is a private company that manages investments and trusts for a single wealthy family. The company’s financial capital is the family’s own wealth, often accumulated over many family generations. Traditional family offices provide personal services such as managing household staff and making travel arrangements. Other services typically handled by the traditional family office include property management, day-to-day accounting and payroll activities, and management of legal affairs. Family offices often provide family management services, which includes family governance, financial and investment education, philanthropy coordination, and succession planning. A family office can cost over $1 million to operate, so the family’s net worth usually exceeds $100 million. Recently, some family offices have accepted non-family members.

More recently the term “family office” or multi-family office is used to refer primarily to financial services for relatively wealthy families.

To enhance their appeal to potential clients, family offices strive to be an all-contained, one-stop-shopping experience to a degree that goes far beyond what the typical integrated, full-service financial firm offers. A prime example is tax preparation, a line of business that major financial services firms typically avoid at all costs, fearful of the potential liabilities. Another is bill payment, in which the firm assumes this responsibility on behalf of the client.

Family offices also tend to offer an array of concierge services that are totally unrelated to their primary function as financial services providers. However, these activities vastly increase their value to wealthy clients who will pay to be relieved of these responsibilities. Some family offices act as travel agents for their clients, or secure hard to obtain event tickets. Others may post bail for unruly clients who land in jail. The list of these ancillary services is potentially limitless.

As of 2011, the Family Office Exchange estimated that there were between 3,000 and 5,000 family offices in the U.S., with an average of $400 million in total client financial assets each.

Benefits of the Family Office approach:

  • Advice is provided with a complete understanding of all the family assets and liabilities
  • Services are provided to the entire high net-worth family
  • It ensures all advisors work together in a coordinated manner toward an integrated wealth strategy
  • It provides benefits of combined purchasing power, allowing for reduced costs
  • Investments are managed in the context of the overall family balance sheet

SOME MORE BENEFITS

1. It provides integrated plan for family’s complete financial affairs, including investments, wealth transfer strategies, proactive tax planning and optimal ownership structures.

2. A comprehensive approach to risk management, so we know our family and wealth are protected.

3. A well thought-out investment policy and process that includes selection and oversight of money managers, effective diversification and consolidated performance reporting.

4. Time saving and complexity management, by having a family office act as the quarterback to coordinate and oversee all the components of integrated financial affairs.

5. The cost saving benefits of pooled purchasing power (with full confidentiality).

6. Coordination of professional advisors – including lawyers, accountants, investment and insurance advisors – to ensure that our family’s objectives are met.

7. A strategic approach to family philanthropy.

8. The confidence that, if something happens to the main family decision maker, there will be someone in place who knows the family and the family wealth to help them manage through the transitions and into future generations.

9. The proactive, personalized and highly responsive service of an employee-owned, boutique firm.

Types of Family Office

A single family office (SFO) is dedicated to just one family. A multi-family office (MFO) serves several.

Some venerable family offices, notably the Phipps family‘s Bessemer Trust, have accepted clients from outside their founding families, thus converting from single family offices to multi-family offices. The primary motivation for doing so has been to spread the considerable operating costs of the family office over a wider base of clients and assets.

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What is the difference between Wealth Management and Financial Planning???

Sowing the Investment SeedThese two terms Financial Planning and Wealth Management are very confusing and most people generally consider them as synonyms. But actually they are not synonyms. We have tried to find out how they both differ.

Financial Planning, like any planning for that matter, does not mean that you really execute that plan. We all have many plans and ideas. Most investors use Managers to actually execute their plan and to oversee and manage it = Wealth Management.

Wealth Management considers all aspects of asset allocation into appropriate asset classes for each client (one approach will not work for every client). You have to understand the risks of various assets classes such as U.S. equities, global equities, corporate bonds, municipal bonds, futures, physical commodities (gold, platinum, silver), real estate, gems and other collectibles. A good wealth manager will actually manage the assets, in my opinion financial planners will simple allocate investment capital into appropriate mutual funds, will sell the client various insurance products, annuities, and other ” quasi investment ” products and leave it to the mutual fund managers to perform which may upset the client if the investments chosen by the financial planner don’t perform as anticipated.

There’s a geographical issue here too. In the UK we have sweeping regulatory change on the horizon (the RDR) and this is altering how advisers badge themselves. Many IFAs now call themselves Financial Planners and increasingly use passive instruments. Their focus is on the clients objectives and meeting them with as little risk and cost as possible.

The term Wealth Manager has historically belonged to investment managers, but many of these firms are incorporating financial planning into their offerings, to give their investment performance context. Active fund managers are expecting and indeed already experiencing price pressure, brought about by increased transparency and competition from passives.

The strongest model for firms in the UK would seem to be one that includes a holistic financial plan at the core, with investment management delivered in-house (smaller firms without the resources often in source and white-label) and a range of periphery services (tax, insurance broking, estate planning and so on) round the outside. This model cements the adviser/client relationship (good for long term profit if you can get the delivery right) and makes the assets nice and sticky (another useful metric when valuing the business).

Wealth Management shall mean something wider than financial planning. Wealth management would include not only financial assets but any kind of wealth the advisor is hired for its maintenance, preservation and growing. From our point of view, domestic and international tax Law, corporate Law and Family Law should be considered as a part of the Wealth Management knowledge.

One way to view Wealth Management, would be as a comprehensive or specific set of plans and strategies designed to manage a set of assets or one large category of assets (e.g. an investment portfolio, closely held business, commercial real estate, etc.) towards specific outcomes. Whereas, Financial Planning is a supportive or auxiliary component that addresses broad goals or issues (e.g. college funding, cash flow modeling, estate tax estimates and funding, spendthrift provisions within a trust, multi-generational family lifestyle funding, etc.)

Wealth Management deals with creation, accumulation, preservation and enjoyment of wealth which includes qualitative aspects of wealth enjoyment whereas a financial plan relates to creation and execution of a strategy to achieve a set of financial goals. This strategy would necessarily deal with the financial aspects of wealth creation whereas wealth management also deals with the emotional aspect of wealth. A Financial plan is passive management of wealth through asset allocation and risk management whereas wealth management involves active management in terms of identifying and taking advantage of opportunities to create and enjoy wealth and can even include sharing of wealth through philanthropy.

Some of the distinctions drawn are a function of the countries and financial disciplines of persons who are associated with these two domains. In the US, we would argue Wealth Management is a term best understood as holistic. Wealth Management includes Financial Planning, Investment Management, as well as other disciplines such as banking, trust and estate planning. It involves requisite expertise to support a HNW individual/family as they plan and execute against their financial and non-financial goals.

Financial Planning is the construction of the basic “blueprint” for an individual or family to follow. It will include many of the following: asset allocation, taxation, cash flow management, a “safety fund”, insurance and basic risk management, educational funding if appropriate and the construction of a foundation estate plan including living documents.
Once an individual accumulates enough wealth, and this is a moving target for each person, where their wealth will survive them, now we are into “Wealth Planning”. We can’t tell you precisely where this change in thought process may occur for the client. Wealth beyond the current US applicable exclusion amount, $5,120,000, or twice this sum for a couple is a reasonable proxy.
At this wealth “breakpoint”, an individual starts to think differently. They will entertain more advanced strategic ideas to transfer wealth efficiently and minimize taxation. They are faced with the problem of potentially leaving heirs with a life changing sum of money This change in thinking may also happen at a lower level for an individual that believes in planning for responsible wealth transfer to heirs.
They may start entertaining the idea of asset protection and generational trust planning. Studies by the VIP Forum show that the vast majority of this demographic will be business owners. Planning for an orderly business transition and monetization of the owner’s equity is also a consideration.

We have global certifications in both the Financial Planning and Wealth Management domains. For the financial planning domain we have the “Master Financial Planner” Certification and for Wealth Management we have the “Chartered Wealth Manager” Designation.

Wealth Planning

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10 Great Feng Shui Ideas For Enhancing Wealth

Three Legged Toad With A Coin In Its Mouth

 Attract plenty of wealth into your home using three-legged Toads with a coin in its mouth! This auspicious creature attracts good fortune into your home. Place the toad in any of the corners diagonally opposite your front door for best effect. The best to have in a room is NINE but you can also keep them in THREEs or SIXes. At the very least, you should have one toad facing out to collect the money and one facing in to bring the money back into the house. Keep your toads below the table, behind the couch or in other discreet public areas of your home, but never in the bedroom.

Sailing Ships For Wealth

Enhance prosperity luck with a wealth ship sailing into your home or office. Returning home triumphant from its various conquests, the prosperity ship docks into your ‘harbor’ bearing wonderful treasures and other valuables as trophies symbolizing its many victories. Display the wealth ship sailing into your house from your sheng chi direction. Fill your ship with coins, ingots, crystals and other treasures to symbolize a wealth ship laden with money. Place metal ships in the northwest or west, wooden ships in the east or southeast, crystal ships in the northeast or southwest.

Prosperity Money Plant

This auspicious plant has luscious green leaves that are heart shaped. They signify growth and are especially good for enhancing money luck. Display this plant in the southeast sector, which is the universal corner for activating money luck.

The money plant can also be placed in the East or South. You can have these money plants in your living room or office but never put them in your bedroom or bathroom.

Treasure Pot Of Gold

This Treasure Pot is overflowing with gold ingots of varying sizes and precious jewels to signify the accumulation of an abundance of wealth and material assets in your home. Display this wonderful energizer of prosperity luck in the living or dining area of your home to attract lots of wealth and good fortune into your life. For best results, place in the west, northwest or north sector of your living or dining area. Remember, a bucket of gold equals an abundance of wealth.

Personal Wealth Vase

Assemble your own wealth vase and watch the money roll in! A personal wealth vase is one filled with precious items, and is an excellent way to attract wealth luck to its owner. Just pack all the precious items provided into your vase and tightly secure the vase with the cover provided. Your personal vase must be kept hidden away from the eyes of others, preferably inside a cupboard in your bedroom, and never facing the front door, as this symbolizes your wealth draining away.

Auspicious Arowana (Golden Dragon Fish)

The arowana, or golden dragon fish, is an especially powerful energizer of wealth, luck and happiness. In Hong Kong, many well-known Chinese businessmen swear that their good fortune is due to keeping live arowanas in their offices. This arowana swimming on a seabed of coins conveys auspicious meanings of wealth! Those who wish to benefit fully from the use of arowanas as a feng shui wealth enhancer should display them on the desk or table in a group of nine.

Prosperity Gold Coins

These Chinese coins are round with a square hole in the center. They represent the powerful union of heaven and earth. Display them with the yang side facing up. The Yang side has four Chinese characters. The reverse is the Yin side. Carry three coins tied with red cord in your bag to bring endless wealth luck. Alternatively, hang nine coins above the front door of your house to attract wealth and luck into your home. Hang six coins in your car to bring happy ventures and good tidings whenever you travel. Tape nine coins to the underside of your floormat. Stick three coins to all your important files. Attach three coins to your telephone for successful conversations.

Feng Shui Jewellery

For the best kind of career and business luck, invest in feng shui jewellery. Wear the golden dragon on your body to generate the cosmic chi that brings great good fortune. Wear a total of nine gold coins on your body to signify and simulate the fullness of heaven and earth luck. Wear the golden arowana to capture instant wealth luck. Wear the golden three-legged toad to bring wonderful money-making opportunities into your life. Keep these good fortune symbols close to your body always and soon your career will flourish and your business luck will take off.

Prosperity Gem Trees

The Prosperity Gem Tree signifies continual growth; hence, it assists business people to acquire more wealth and helps to maintain the state of finances as well. Its branches are laden with gold coins to symbolize the growth of prosperity. Crystal empowers the mind and expedites problem-solving by promoting creativity with intelligent decisiveness. Display in your office to give you an edge in business negotiations. In the home, the gemtree brings wealth luck to the household.

Auspicious Turn-Tables

Display an auspicious double carp turn-table on your dining table to enjoy abundant good fortune and success in the household. Alternatively, display the auspicious five fortune bat turn-table to attract five blessings from heaven, which encompass happiness, prosperity, health, virtue and peace. These auspicious turn-tables make excellent energizers for endless good fortune and harmony in a household.

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