Category: Wealth Management

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Equinox Racing is a London based horse racing syndicate like no other. Focused on delivering immersive experience to its members, Equinox Racing recently opened its horse’s shares to cryptocurrency. From now on, you can use your Bitcoins to buy yourself the thrill of horse racing and the privilege of horse ownership.


Rob Edwards, co-founder of Equinox Racing, commented: “There is a huge amount of capital in the crypto world, and not too many tangible opportunities out there. A lot of the people who invested in crypto, particularly in the early days, are punters. They are our kind of people!” 


Equinox Racing believes horse racing should not be limited to the chosen few but made available to enthusiasts and new audiences on a wider scale. Having nine horses and about 100 club members and owners to date, Equinox Racing offers a range of exciting experiences. Visit your horse at the stables, speak with the trainer and the jockey, follow his evolution on social media and support him at the race!


D Millard from Norwich, Norfolk (horse owner), commented: “Equinox Racing delivers fantastic days out, real prize money winning opportunities, and its stable of horses just continues to grow.” 


For the equivalent of £34,99 per month in crypto, which is the average price for gym memberships, Equinox Racing enables you to be part of something greater than a pair of weights. And ownership is available from £150 pounds (in crypto as well)! Thrill, suspense, joy, grace, excitement, exclusivity, are the words that describe the emotions experienced during a horse race.


J MacLeod from Ayr (horse owner) commented: “Simply amazing.  My passion for racing has grown now that I have affordable ownership.  I never thought I would be able to own any part of a horse with such a stunning pedigree.” 


Equinox Racing is currently expanding its horse’s portfolio and looking at new acquisitions. It is now the perfect time to get involved!


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BankingFinanceFundsWealth Management

WisdomTree launches Artificial Intelligence ETF (WTAI)

WisdomTree, the exchange traded fund (“ETF”) and exchange traded product (“ETP”) sponsor, has partnered with Nasdaq and the Consumer Technology Association (CTA) to launch an ETF providing unique exposure to the Artificial Intelligence (AI) sector. The WisdomTree Artificial Intelligence UCITS ETF listed on the London Stock Exchange today, with a total expense ratio (TER) of 0.40%.


The ETF will provide investors with liquid and cost-effective access to this exponential technology megatrend that is driving efficiencies and new business capabilities across all industries globally and redefining the way we live and work.


Christopher Gannatti, WisdomTree Head of Research in Europe says, “We are delighted to partner with Nasdaq and CTA, who are experts in AI and technology markets. We have worked together, leveraging our combined expertise, to re-define the AI investment landscape.”


“To capture the full economic value of AI we place companies in three categories; Engagers, Enablers and Enhancers*. When investors think of what this can bring to a portfolio, they should be thinking over a long time horizon and about how advances like autonomously driven cars, a digital workforce, mass facial recognition and other applications of intelligent machines could change the world,” Gannatti added.


Rafi Aviav, WisdomTree Head of Product Development in Europe comments, “AI is a revolutionary technology and the market for AI products and services is expected to more than triple over the next three years[1]. This fund offers a unique approach to capturing this expected growth, which is the result of a year-long collaboration between WisdomTree, Nasdaq and CTA.”


“The fund broadly represents the upstream[2] and midstream[3] parts of the AI value chain and so balances diversification with a focused exposure on those parts of the AI value chain that stand to gain the most from growth in the AI market,” Aviav added.


There is no commonly used classification system that allows one to automatically choose companies engaged in the emerging AI space, so the research for the selection of index portfolio companies is conducted by experts with deep familiarity of the AI value chain and the technology markets more broadly. This ensures the portfolio remains focused on AI opportunities rather than becoming just another broad tech fund.


We believe the fund’s unique approach offers the best of both the active and passive investment worlds in accessing the AI megatrend. The fund’s portfolio companies are already capitalising on the AI opportunity across industries and are well positioned for AI’s growth,” Aviav commented.


“AI is one of the key ‘ingredient technologies’ over the next decade – deployed everywhere from factory floors and retail stores to banks and insurance offices, creating new opportunities,” said Jack Cutts, senior director of business intelligence and research, CTA. “We’ll see this play out in January at CES® 2019 – the most influential tech event in the world – where AI will be a dominant theme, showcasing the massive potential AI has to change our lives for the better. We’re excited to partner with Nasdaq and WisdomTree to make AI investible.”


“Artificial Intelligence is at an inflection point to drive further economic growth and create new areas of opportunity,” said Dave Gedeon, Vice President and Head of Research and Development for Nasdaq Global Indexes.  “The Nasdaq CTA Artificial Intelligence Index serves as an important benchmark for tracking the adoption of AI across a broad range of economic sectors as this influential technology hastens advancements in productivity and capacity.”


WisdomTree Artificial Intelligence UCITS ETF: Under the hood

The WisdomTree Artificial Intelligence UCITS ETF tracks the Nasdaq CTA Artificial Intelligence Index.  This enables investors to gain diversified exposure which is focused on companies that stand to gain the most from growth in AI adoption and performance. The index can evolve as new AI trends and companies come on stream through a semi-annual update. The Index is currently comprised of 52 constituents globally with stringent eligibility criteria:

  • Define Universe: Companies must be listed on a set of recognized global stock exchanges and satisfy minimum liquidity criteria and market capitalization criteria to be included in the index.
  • Identify and Classify: Companies are identified as belonging to the AI value

chain and classified into the following categories: Enhancers, Enables and Engagers (see below for definitions.)

  • Determine AI Exposure: The AI exposure for each individual stock is investigated and scored.
  • Top Selection: Only companies with the top 15 scores in each category (Enhancers, Enablers and Engagers) are selected for inclusion, and their weight is allocated evenly in each category.
  • Allocate Weight: In total Engagers comprise 50% of index exposure, Enablers comprise 40%, and Enhancers comprise 10% of index exposure.

*Engagers: Companies whose focus is providing AI-powered products & services.

Enablers: Companies who are key players in this space, with some of their core products and services enabling AI. They include component manufacturers (including relevant CPUs, GPUs etc.), and platform and algorithm providers that power the development and running of AI processes.

Enhancers: Companies who are a prominent force in AI but whose relevant product or service is not currently a core part of their revenue. They include chip manufacturers, and platform and algorithm providers that power the development and running of AI-powered products & services.


Share Class Name



Trading Ccy

Exchange Code


WisdomTree Artificial Intelligence UCITS ETF – USD Acc







WisdomTree Artificial Intelligence UCITS ETF – USD Acc







ArticlesFinanceRisk ManagementWealth Management

IVA or bankruptcy: what is the best solution for your debts?

If you are suffering from severe cash flow issues, you may be considering both bankruptcy or an individual voluntary arrangement (IVA). Bankruptcy and IVAs are both legally-binding and formal insolvency options between you and your creditors. However, while they might appear similar, there are some vast differences to consider before entering into one of the procedures. Most importantly, you should always seek insolvency advice before doing so to ensure you are not impacting your future finances.


With that in mind, Business Rescue Expert – a licensed insolvency practitioner firm – is sharing the difference between the two and what you can expect from both insolvency procedures.


Choosing an IVA or bankruptcy

Recently, both insolvency procedures have hit the news due to a number of high-profile celebrities suffering cash flow issues. Katie Price is the most recent victim, with her bankruptcy woes documented in the media. However, she is certainly not the only to face cash flow issues, with the total number of individual insolvencies continuing to rise in 2018. The Q2 Insolvency Service report made for particularly tough reading, with the number of individual insolvencies at its highest since Q1 2012. IVAs accounted for 62% of the total, with bankruptcy behind a further 14%.


Individual voluntary arrangements were, originally, intended as a better alternative to bankruptcy. IVAs are, generally, considered the more suitable option for those with assets they wish to protect. The procedure is defined as ‘less extreme’ than bankruptcy and also provides moratorium for the individual, with the breathing space helping to regain control of the issue and get to the root cause of the cash flow problems. However, an IVA is a much longer procedure than bankruptcy, and you could be tied up in the process for up to seven years.


Bankruptcy, on the other hand, is often considered as it is much shorter than an IVA – typically lasting no longer than 12 months. Unlike an IVA, however, your assets will be forfeit, and that could include your vehicle and house.


There are both advantages and disadvantages to each and, if you are not particularly savvy as to those, we suggest seeking advice to ensure you go down the right path.


Can the procedures affect my home?

The effect of the procedures on your home is a common cause of worry for many. If you do enter an IVA procedure, you will not be forced to sell your home. However, if it is highly possible that you could be asked to remortgage six months prior to the end of your IVA to free up any capital to repay your debts. This will only ever happen, though, if it is affordable for you. If not, an additional 12 months may be added to your IVA.


In the case of bankruptcy, however, your home will likely be affected. If there is any equity tied up in the house, your creditors may ask you to sell to repay their debts. Either way, you should seek advice at the earliest possible opportunity.


What about my car?

Another major cause for concern is your vehicle. IVAs ae much longer procedures than bankruptcy and, as such, you are likely to be able to keep your car. The same, unfortunately, cannot be said for bankruptcy, as the sale of your car could offer a large contribution to your debts. However, if you do require your car/van for your trade and rely on the vehicle to make money and repay your debts, you will, likely, be able to keep it. If this is the case, you must speak to your bankruptcy trustee immediately.


Could my job be impacted?

When you do enter insolvency or bankruptcy, the details will be made public. While that doesn’t mean a front page story in your local newspaper, your details will be placed on the Insolvency Register. Similarly, a notice will be placed in The Gazette for your creditors to find. If you work in the finance industry or are a director of a company, both procedures can significantly affect your standing.


If you file for bankruptcy, you cannot act as a director of a limited company. However, there is no such prohibition with an IVA. But, there is likely to be restrictions on handling client’s funds and some companies may have stipulations in their contracts for hiring those who have entered or are in the procedures.


Why choose an IVA?

There are many reasons to choose an IVA – especially as the consequences appear less severe than bankruptcy. The IVA will be completed after no more than seven years and you can then begin building your credit. Whilst you are in the procedure, your creditors cannot make further demands for repayments or take legal action against you for the debts. Similarly, your assets are afforded more protection, with also far less consequences on your future career – particularly if you are hoping to act as a director for a company.

It’s also important to note the disadvantages, however. If you are looking for a short arrangement with your creditors, you must be aware than an IVA can last up to seven years. Your credit rating will also be affected due to the procedure, meaning you will have to work to build your credit report once complete.


Why choose bankruptcy?

Filing for bankruptcy does come with advantages, especially for those that are looking to repay their debts quickly. It is completed in around 12 months. However, if there is any evidence of fraud – such as hiding your assets or not detailing all finances – the trustee could apply for a bankruptcy restriction order, meaning you could be deemed bankrupt indefinitely.


Similarly, if you don’t have many belongings/assets or equity tied up in your house, bankruptcy could prove a suitable option. Creditors cannot also demand anymore payments while in the procedure.


Like an IVA, bankruptcy does have its disadvantages. The procedure will, almost certainly, affect your ability to work in the finance sector and will stop you from acting as director of a company.


Ultimately, there are many differences between the two and any advice you can obtain can only help to ensure you choose the correct option.

ArticlesCash ManagementFinanceWealth Management


Borrowing more for a car loan could save you money, according to research by What Car? 



Borrowing just £50 more for a new car loan can make it cheaper than taking out a smaller loan according to new research by What Car?, the UK’s leading consumer advice champion.

Analysis of the UK’s leading high street lenders suggests that borrowing the extra amount could save motorists up to £1600 over the course of the repayment period.*

Loans of £5000 typically have lower interest rates than smaller loans. For example, the repayment total of a £5000 loan from TSB over four years comes in around £1300 cheaper than the repayment of a £4950 loan over the same period.

Similarly, at Lloyds the repayment on a £7500 loan over four years is £1601 less than the repayment for borrowing £7450.

What Car? editor Steve Huntingford said: “We would always recommend borrowing as little as possible, but where the loan amount is close to the threshold for a lower interest rate, borrowing as little as £50 extra could save you 10 times that amount, so borrowers should do their homework.”

This trend was most commonly seen when analysing borrowing of amounts between £4500 and £8000.

Research shows that UK motorists are increasingly using finance options to aid with the purchase of cars. Within the first six months of 2018 there was a rise of 8% in car finance lending, with it topping £10 billion.**

However, while taking out a slightly bigger loan can save you money, there is a cut-off point, with loans of more than £8000 costing the borrower more the more they borrow.Savvy shoppers are able to capitalise on these trends by not only borrowing smartly, but by using the What Car? Target Price on What Car? New Car Buying to ensure they get the best deal. 

Car finance top tips: 

Shop around – compare the types of finance available and choose the best option available to you

Don’t stretch yourself – only borrow within your means, making sure you can afford the repayments

Additional charges – be aware of additional charges and always read the small print of your loan to be sure you don’t end up with any nasty surprises

High Net-worth IndividualsWealth Management

Under the radar cyber attacks costing financial services companies $924,390 and getting worse

EfficientIP’s DNS Threat Report reveals alarming 57% attack cost rise in last 12 months

Global DNS Threat Report, shared by EfficientIP, leading specialists in network protection, revealed the financial services industry is the worst affected sector by DNS attacks, the type cyber attackers increasingly use to stealthily break into bank systems. 

Last year, a single financial sector attack cost each organization $588,200. This year the research shows organizations spent $924,390, to restore services after each DNS attack, the most out of any sector and an annual increase of 57%.

The report also highlights financial organizations suffered an average of seven DNS attacks last year, with 19% attacked ten times or more in the last twelve months. 

Rising costs are not the only consequences of DNS attacks. The most common impacts of DNS attacks are cloud service downtime, experienced by 43% of financial organizations, a compromised website (36%), and in-house application downtime (32%). 

DNS attacks also cost financial institutions time. Second to the public sector, financial services take the longest to mitigate an attack, spending an average of seven hours. In the worst cases, some 5% of financial sector respondents spent 41 days just resolving impacts of their DNS attacks in 2017.

While 94% of financial organizations understand the criticality of having a secure DNS network for their business, overwhelming evidence from the survey shows they need to take more action. Failure to apply security patches in a timely manner is a major issue for organizations. EfficientIP’s 2018 Global DNS Threat Report reveals 72% of finance companies took three days or more to install a security patch on their systems, leaving them open to attacks. 

David Williamson, CEO, EfficientIP, comments on the reasons behind the attacks. “The DNS threat landscape is continually evolving, impacting the financial sector in particular. This is because many financial organizations rely on security solutions which fail to combat specific DNS threats. Financial services increasingly operate online and rely on internet availability and the capacity to securely communicate information in real time. Therefore, network service continuity and security is a business imperative and a necessity.”

Working with some of the world’s largest global banks and stock exchanges to protect their networks, EfficientIP recommends five best practices:

Enhance threat intelligence on domain reputation with data feeds which provide menace insight from global traffic analysis. This will protect users from internal/external attacks by blocking malware activity and mitigating data exfiltration attempts.

Augment your threat visibility using real-time, context-aware DNS transaction analytics for behavioral threat detection. Businesses can detect all threat types, and prevent data theft to help meet regulatory compliance such as GDPR and US CLOUD Act.

Apply adaptive countermeasures relevant to threats. The result is ensured business continuity, even when the attack source is unidentifiable, and practically eliminates risks of blocking legitimate users.

Harden security for cloud/next-gen datacenters with a purpose-built DNS security solution, overcoming limitations of solutions from cloud providers. This ensures continued access to cloud services and apps, and protects against exfiltration of cloud-stored data.

Incorporate DNS into a global network security solution to recognize unusual or malicious activity and inform the broader security ecosystem. This allows holistic network security to address growing network risks and protect against the lateral movement of threats.

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Number Of Retail Investors Seeking IHT Advice Set To Rise

Advisers highlight expected increased use of flexible IHT solutions for clients

More than three out of four (78%) financial advisers expect the number of retail investors seeking help for IHT planning to increase over the next three years, according to new research from TIME Investments, which specialises in tax efficient investment solutions.  The findings come as IHT receipts hit a record £5.2 billion in 2017-18 despite the introduction of an additional nil-rate band.

Six out of ten (63%) advisers also predict an increase in the number of IHT products and investment solutions to be launched in the UK.  However, whilst this will offer more choice to investors, it also comes with a health warning – 88% of advisers questioned are concerned that new products will be launched by firms that don’t have the appropriate track record and/or expertise.

Two thirds of advisers predict an increase in the use of Business Relief (formerly known as Business Property Relief) over the next three years to help people reduce their IHT liabilities.  To encourage investors to support UK businesses, the Government allows shares held in qualifying companies that are not listed on any stock exchange and some of those listed on AIM to qualify for Business Relief. This means that once owned for two years, the shares no longer count towards the taxable part of an inheritable estate and are free from inheritance tax at point of death.

The accessibility of Business Relief investments and the range of investment opportunities available help to provide flexibility in IHT planning.  Three quarters of advisers felt that the increasing use of Power of Attorney due to rising dementia rates would contribute to the growth in the use of these flexible IHT solutions.

Henny Dovland, TIME Investments’ IHT expert comments: “The number of families in the UK being caught in the IHT net is increasing.  This represents a significant opportunity for advisers specialising in IHT and intergenerational planning and is reflected in our findings that reveal more specialist products are set to be launched in this market. However, care needs to be taken to ensure any new solutions are fit for purpose.  Our specialist team has a track record of over 22 years in this complex area.”

For further information on TIME Investments and its range of products, please visit

Private ClientWealth Management

Preserving a Heritage of Excellence

Preserving a Heritage of Excellence

Proserv is a global leader with a worldwide presence, offering a fresh alternative in the delivery of engineering and technical services to the energy, process and utility markets. We spoke to Andy Anderson, Regional President MEA at Proserv, to find out more about the company and its innovative services.

Andy, could you begin by providing our readers with a brief overview of Proserv Middle East and the services you offer?

“Proserv is a global leader and a fresh alternative in the delivery of engineering and technical services to the energy, process and utility markets, supporting clients throughout the lifecycle of their assets. We operate in six regions throughout 22 facilities and 12 countries, offering 24/7 local support services. Core to the Proserv offering is our ability to manufacture, deliver and support solutions locally through our highly experienced pool of technicians and engineers.

“We have been based in the UAE for over 25 years, largely servicing customers across the energy sector, including offshore and onshore services, equipment design and manufacturing. Proserv has supplied the vast majority of installed wellhead controls in the region through its legacy brands – Brisco, CAC and eProduction Solutions.

“We deliver a broad range of hydraulic safety shut down systems for wellheads, chemical injection systems, downhole and surface sampling systems, from bases across the region; all of which are backed up by a strong technical team who are able to install, commission and maintain equipment in the field.”

Talk us through your approach to client service. How do you maintain the high standards synonymous with the Proserv brand?

“Meeting and exceeding our clients’ expectations is vital to ensuring our ongoing success. We strive to develop and maintain this through establishing business relationships built upon experience, competency and trust. We focus on regular face-to-face engagement with our clients, taking the time to understand their requirements.

“We then revert with a solution that is in line with our company ethos – Ingenious Simplicity. This concept is based upon challenging convention in an industry that continues to ‘over engineer’. Ingenious Simplicity is about being flexible and responsive to clients’ needs, while reducing unnecessary levels of complexity in order to get the job done in a cost effective manner.”

Following on from this, what is it that makes Proserv Middle East unique? How do you distinguish yourselves from your competitors, and present yourselves as the best option for your clients?

“Proserv has an extensive brand heritage spanning over 40 years. Through our acquisitions, we have shown the importance of embracing this heritage alongside a commitment to constantly evolve and develop innovation.

“A key topic in our industry right now is ageing wells, and as a result E&Ps are searching for adequate partners to support their OEM requirements, without full system replacement. Many parts for the old wells are now obsolete or superseded and so Proserv has recognised this and positioned itself as a partner of choice who can re-engineer the part required to maintain production.

“Also, we actively listen and collaborate with our clients to find cost effective solutions for their maintenance and production issues. A great example of this was the development of our cost-effective Smart Box solution. Also, we are currently working on the development of an Asset Enhancement Global Intelligence Solution (AEGIS), which will be released, to our customers this June.

In order to provide quality services, exceptional staff are crucial, so please tell us more about the culture within Proserv Middle East and the things you do to maintain and develop it. What do you look for when attracting new staff and how do these traits help them integrate into your company?

“Our growth is driven by a team of dedicated and talented people who provide the company with expertise in engineering and business, creating pioneering solutions that allow us to remain competitive. As a service EPC, our people are our biggest asset and we nurture an environment that encourages creativity and employee-driven innovations.

“In the UAE, we employ more than 20 different nationalities and unite through a clear set of values. The five values – encompassing teamwork, service, communication, entrepreneurship and right thing, right way, guide each of our decisions and behaviours. When we recruit new people to join our team, we look beyond a person’s technical ability and experience and place emphasis on ensuring a person’s values are aligned to Proserv’s. Internally, we provide training for our staff, encouraging continuous development and learning through our internal ‘Proserv Academy’. One example is our ‘technician training school’ which we have developed and implemented for the needs of our Saudi business. The school will enable many young Saudis to gain the necessary skills to learn and develop as part of the Proserv family.”

As your regional headquarters are in the UAE, can you please tell us a bit more about the opportunities and challenges you experience being based there?

“The UAE has the world’s seventh largest proven reserves of both oil and natural gas, estimated at 97.8 million barrels and 215 trillion cubic feet. There is no doubt that oil will continue to provide income for both economic growth and the expansion of social services for decades to come. In the coming years, natural gas will play an increasingly important role in the UAE’s development – particularly as a fuel source for power generation, petrochemicals and the manufacturing industry.

“The industry itself is going through a difficult transition; CAPEX is not always a viable option for our end user clients and OPEX is typically only being spent to perform safety or production critical work. However, with ADNOC being restructured and the oil price creeping up towards $70 per barrel, new investments are planned for the short/medium term. These challenging times have called for a fresh approach in maintaining operational efficiency, whilst decreasing OPEX through scheduled and maintained inspections, but also longer term planning. Our approach has been to offer services across the complete life of field through locally supplied products and services. We have existing long-term service contracts with our clients, where we have proven we can repair or upgrade existing assets, rather than replacing them, thus enabling them to maintain production and reduce downtime at a fraction of the cost.

“The UAE serves as a Centre of Excellence for Proserv’s growing business and organisational presence in the Middle East and Africa market. Our regional headquarters and equipment-manufacturing facility is located in Dubai, while the service centre is located in Abu Dhabi.”

In your opinion, what are the key advantages to being based in the UAE? Are there any core areas of growth that you believe make it the ideal hub for your business?

“For some time, the UAE has been viewed as an energy hub/gateway for the Middle East region. While many companies located in the UAE solely distribute products made in the USA/EU across the Middle East market, Proserv manufactures and provides services from its local facilities in both Dubai and Abu Dhabi.

“Proserv recognises that the best support for our clients is achieved by local, in country support. The energy industry is a 24-hour operation, and, as such, has a need for timely service capability. We are able to immediately mobilise service engineers/technicians with local visas/work permits to address unplanned events that can cause our clients expensive downtime via lost or reduced production. Also, we provide client specific intelligence solutions to map and track inventory parts, enabling us to provide or quickly call off replacement parts. Our focus remains on world-class respond and resolve solutions.”

Reflecting on the past 12 months, what have been the most prevalent trends in your industry and how has your business adapted around these?

“Last year was a year of innovation for us. Our track record, coupled with our ability to create new value for our clients, allows us to continue to expand our business. The opening of our facility in Saudi Arabia – an Aramco Approved Manufacturing and Service Facility – was a key moment for us back in 2016 with the region very much continuing to be a key growth market for us.”

Looking ahead, what does the future hold for Proserv in the Middle East? Do you have any future plans or projects you would like to share with us?

“Moving forward, Proserv will continue to secure its footprint within the GCC through the establishment of a Manufacturing & Service facility in KSA, as well as investing in expanding our service centre in Abu Dhabi. This will further strengthen our capabilities and capacity to service the increasing demand for our product and services within the region.”

Contact Details 

Company: Proserv Middle East

Address: Jebel Ali Facility, Jebel Ali Free Zone, Dubai, 16922, UAE

Phone: 00971 4 808 3500


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Private FundsWealth Management

Wealth management and digital engagement

“Hey, Siri, how do I keep my clients?” Wealth management and digital engagement

By John Wise, Co-founder, CEO and Chairman, InvestCloud

Many wealth managers are wondering why millennials fire them after an inheritance. It’s a daunting problem with a very simple cause: millennials don’t see the value that wealth managers add. This is primarily due to a lack of empathy and resonance on the wealth manager’s part with younger generations.

There is a lot of money in motion right now. As Baby Boomers retire and Gen X’ers start planning for retirement, many are selling small businesses, downsizing their homes and starting to tap their retirement plan assets. Because of these dynamics, in the US alone, over $60 trillion of assets are becoming liquid and transitioning between generations now. This money is up for grabs.

The primary inheritors are millennials, and they are becoming a major presence. This generation represents approximately 30 percent of the US population. They are the largest age group demographic in the country and a close third of the investor base – around 30 million investors. This generation is already the next big thing in investing.

Millennial money

What are millennials going to do with this money? Well, it is not the same as previous generations, as the adoption of wealth managers is low among millennials. A recent report from Accenture shows that only 20 percent of millennial investors say they will work with an advisor exclusively. This is partly due to 57 percent feeling their advisor is only motivated to make money, and about one-third feeling their advisor doesn’t get to know them.

The result is devastating for the sector: up to six 6 out of 10 clients leave their benefactor’s advisor upon inheritance – i.e., the millennial fires the advisor upon receipt of the money. This is coupled with a distrust bias toward large brands – with an exception until recently for the tech platforms they use every day. This distrust is especially true of financial brands for a generation defined by the recent global economic crisis.

This is illustrated in that 70 percent of polled millennials would rather go to the dentist than listen to what their banks are saying. Worse still, a further 70 percent – across all age groups – say they would accept financial advice from a Google, Facebook, Apple or robo-advice platform instead of a traditional financial business. This is an engagement crisis for wealth managers.

So how do managers reverse this trend and engage investors?

Re-booting engagement – offline and online

Millennials are reported to have poor attention spans, a fear of missing out (FOMO) and a love of digital communication methods. While these observations don’t apply to all millennials, there probably isn’t going to be a mass exodus from short playlists and social media to steak dinners and golf.

Empathy is the key to better engagement – both offline and online. First of all, an obvious point: wealth management businesses need younger people to better engage with the latest generation of investors and to speak their language.

But empathy must be both in-person and digital. If in-person means connecting with investors in real life, then digital means relating it both in browser and through mobile apps. Digital is one of the saving graces for wealth management businesses – it makes them appear younger, and millennials clearly value digital, especially in finance.

Digital requirements

Any digital offering needs to meet certain requirements. Firstly, it needs to be available at any time, any place and via any device to give millennial clients power over how and when they interact with their wealth. Think of how the services they use every day work, such as Google, or how they choose to connect – i.e., a preference for mobile, app-based platforms.

It also needs to distinctly appeal to the user. This means it must be intuitive, involved and individual. The user experience needs to appeal directly to the client, all content should be unique to them and it must be worth their time to use the platform. When it comes to engagement, it’s not just other financial service providers that are the competition. Wealth managers are up against social media and entertainment streaming platforms as well.

Thought also needs to be given to specific functionality – what does your digital platform offer? The Accenture report mentioned above goes some way to calling out the specific requirements from this generation.

For example, 67 percent want a robo component and real-time tracking of transactions, payments and other financial data from their investment manager. A further 66 percent want a self-directed investment portal with advisor access, with 65 percent needing gamification for engagement and to help them learn more about investing. Those requiring social media and sentiment indices in the platform to help with investment decisions is around 62 percent.

Remember, though, that these offerings are not one-size-fits-all – they still require tailoring to the individual.

Using the best of both worlds

This doesn’t mean a complete shift to digital-only services. If a client has significant assets – and particularly as his or her life gets more complicated – a broader advice scale is needed, rather than simply having assets allocated to a handful of ETFs. The interaction of digital and human empathy is the key to effectively servicing these specific needs.

This is hybrid wealth management: offline and online services that work harmoniously together to create a better experience for the client, and greater levels of engagement for the manager. It means a better understanding of clients and therefore leads to more opportunities to expand the share of wallet, impacting the all-important bottom line.

So, how do financial businesses resonate better with millennials? Appoint younger people. Use digital. You can still be full service – helping manage life events like retirement planning, college planning, trusts, wills, parental long-term care planning and the like. But make sure you focus your business model on delivering from a place of empathy both in-person and digitally.

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High Net-worth IndividualsWealth Management

2017 Was The Year Of The Bull 2018 May Not Be

2017 was the year of the bull – 2018 may not be

January is an important month in the investment calendar – this year more than most. After a bullish 2017, where most risk asset classes made consistent, if not impressive gains, many feared this long bull run would come to a shuddering halt. However, a month in to 2018 and with a round of solid economic data coming out, the mood of market participants has become increasingly optimistic.

But should they be? It is undeniable that after the tumult of 2016, 2017 saw markets perform exceptionally well, despite a tense geopolitical backdrop. Take major indices as an example. Over the course of the 2017 calendar year the FTSE100 was up 7.6%, the FTSE250 was up 14.65%, the Dow Jones closed 25% higher and the NASDAQ climbed 28%.

2018, however, will be more difficult. The aftermath of the financial crisis and the monetary policies pursued by central banks in the form of quantitative easing has led to stretched valuations across the board. The impact of an increased money supply has even trickled down in to the valuations of newer, less tangible asset classes like cryptocurrencies.

In 2017, the S&P saw 12% earnings growth against a backdrop of a 20% price rise. In other words, share prices are rising faster than earnings and this year there are similar expectations and extrapolations in terms of earnings growth across most major markets.

However, with high expectations and high valuations, danger is never far away. Global economic growth will generate some momentum, alongside the tax reforms in the US. With most major economies growing simultaneously, there may well be an accretive effect which feeds through in to global GDP growth. However, we are at a late point in investment market and economic cycles respectively.

At London & Capital we are advising clients to proceed with caution and to remember the importance of protecting capital especially when the market environment is driven by greed.

Part of the reason for caution is the prospect of further monetary policy tightening. At the very least there will be a series of interest rate hikes in the US with the prospects of a reduction in monetary stimulus in Europe and even in Japan.

However, it is the UK that represents the best example of the pitfalls from the interest rate cycle. The Bank of England Monetary Policy Committee’s recent hawkish rhetoric may potentially lead to a trigger for a downturn from the interest rate cycle. The uncertainty around Brexit and the stretched British consumer means that rate hikes in the UK would be a blunt instrument in dealing with temporary cost inflation from a currency devaluation which has now passed.

Additionally, with the UK consumer having taken on significant levels of personal debt since the financial crisis, interest rate rises at this stage may hamper the spending of Britons further still and create a bust in consumption from a classic rate cycle trigger.

It is on the subject of debt that we need to talk about another significant economic player: China.

China’s debt risk is considerable. Its debt to GDP ratio has surpassed 200% as the Chinese economy has pivoted from being production and export-led, to being consumption based. The 200% threshold represents a watershed moment. This is the point at which in the past countries from Japan, Spain and the Tiger economies of the Far East in the late 90s reached before they slowed significantly and endured economic discomfort.

China will likely be unable to continue growing at the 6% clip it has in the recent past given this debt level. As the world’s second largest economy, even a relatively small drop in the rate of growth could have significant consequences – not just for manufacturers, industrials and those who have seen China as the world’s workshop. It will also have an impact on retailers keen to target an increasingly wealthy Chinese consumer. Commodity prices could also be affected.

China’s demographics are also changing quickly. With the effects of the one-child policy promoted by the Chinese Communist Party in the latter part of the 20th Century becoming more apparent, China’s population is peaking, meaning a supersize generation of retirees may need to be supported by a smaller, younger cohort. This again could constrain disposable income with all the consequences that brings to business. As such, it may well be that the Middle Kingdom grows old before it grows rich.

There are plenty of warning signs which should make investors cautious about the investment landscape in 2018. This year, the old investment adage that past performance is not a reliable indicator of future results has never been truer.

Roger Jones is Head of Equities at London & Capital. London & Capital is an independent wealth and asset manager. This article has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for investment advice. Always seek appropriate professional advice.

Man About Town
Family OfficesWealth Management

Man About Town

Founded by Andrew Heiberger in 2010, Town Residential has cemented its position as New York’s foremost luxury real estate services firm with an exhilarating foundation and seamless execution of best-in-class customer service by an unparalleled team of more than 500 Representatives and professionals strategically located in ten prime Manhattan, Brooklyn and Queens locations.

Town Residential boasts a unique fully integrated luxury real estate platform and specializes in luxury residential sales; leasing; the marketing, sales and leasing of property developments; commercial and retail. With uncompromising principles, Town Residential has established a new standard of excellence within the industry.

At all price-points, Town Residential implements a hand-crafted approach to the marketing of sale and leasing properties with unequalled distribution online and in print; through press and events; and industry syndication. Town Residential’s innovative platform extends beyond traditional print and digital exposure. We have cultivated strategic relationships and focused on events that provide our Representatives with personal access to thought leaders, trendsetters, and tastemakers.

Debra Stotts, licensed Real Estate Broker specializes in luxury property in New York City, with deep-rooted expertise in – and a passion for – the vibrant, international Midtown East neighborhood. Her credentials include unparalleled knowledge of the iconic, award-winning residential building, 845 United Nations Plaza.

Debra has consistently been a leading broker at Town Real Estate. With over $550 million in transactions, her success is the result of 25 years of experience, immersive market intelligence, a history of providing exceptional service, and – especially – the strength of the client relationships she has built on mutual understanding, respect, and trust.

Whether buying, selling, leasing, or managing, Debra’s focus is on her clients; her clear-headed guidance and tireless work ethic ensure that their goals – whether financial or personal – are achieved. She has been entrusted to transact real estate for investors around the globe and for families making their first home purchase, for foreign governments, relocating executives, international institutions, diplomats, downsizing empty nesters, and everyone in between.

Debra firmly believes that Midtown East offers the best value for a NYC investment – so much that she makes her own home here. Ask and she’ll tell you about the hot restaurants, the different parks, and where to go for the best artisanal pastries. She can tell you about the history of the international. Turtle Bay neighborhood and who’s lived there, about the stunning, protected views from 845 United Nations Plaza -and about its inner workings. Informed by her seven years as the onsite sales and leasing director, she knows the building intimately and firsthand.

Drawn to neighborhoods that, like Midtown East, offer nearby parks and water views – a respite from the city bustle – Debra previously worked in on-site sales for luxury properties in Battery Park. Prior to that, she built her real estate business helping to relocate United Nations Representatives to New York. Early in her career, in the days of luxury flying, Debra was a TWA flight attendant, a job she credits for instilling in her the value of providing top-quality, exemplary service.

A Manhattanite since she was in her early 20s, Debra raised her family and nurtured friendships here. From the tranquil early mornings to the rush of the workday to the throbbing pulse of the nightlife, she relishes the city’s changing energies. She enjoys the multi-cultural foods and experiences and the easy access to Broadway Theater, to the world’s best museums, and to Central Park. Debra especially cherishes the striking view from her own home, which overlooks the vast and varied East River.

A World of Opportunity
Private ClientWealth Management

A World of Opportunity

A World of Opportunity

Kehrli & Zehnder is a multi-family office that advises wealthy individuals and families on how to manage, organise, allocate and protect their wealth. The firm oversees all aspects of its clients’ wealth with core strengths in asset management and the selection of correlated and non-correlated alternative investments.

Dominik E. Zehnder is co-founder of the firm, serves as Chairman of the Board and co-runs the business. “Restructurings and lay-offs at banks and financial institutions is a great opportunity for us to showcase our firm as an anchor of stability and reliability,” he says. “The partners at Kehrli & Zehnder only have one goal at the core: over-deliver on the service and performance expectations of our clients. We provide high quality, independent, unbiased and professional advice.

“The current restructuring wave also paves the way for us to hire qualified and experienced staff who look for a more dependable environment for their clients and for their own professional future.
“When clients come to our firm, they are served by one of the partners” (rather than being covered by a junior member of the staff). “Our belief is clients have given us their trust and we have a duty to make sure they have a good experience.” Every partner has a unique skill that benefits all clients of the firm.

Dominik firmly believes that the best way to measure the firm’s success is how long clients stay with them. “I am happy to report that we have clients who have been with us since we were with our previous employers (in the last century!)” he enthuses. “The best endorsement for us is when clients refer their friends or business partners to us” and those who give us a larger portion of their assets over time.”

Dominik embellishes a little on the firm’s history. “We started Kehrli & Zehnder in 2003 and grew it one client at a time, step by step,” he begins. “We want to grow organically and in a sustainable manner. Our industry is one built on trust, and trust is not created overnight. Kehrli & Zehnder is a firm for the long-run.”

Kehrli & Zehnder is off to a successful start in 2017 with two new mandates. In the first, “the principal sold the family business and asked us to set up a wealth-preserving structure that focuses on non-correlated investments,” states Dominik. “The second is from one of our largest (and longest standing) clients who has given us a second mandate to invest in non-correlated assets.”

“Many like our open-minded and international orientation. In addition to our home market in Switzerland, we have representative offices in Hong Kong and Lugano. We travel to Asia, the U.S. and London at least once a year to perform due diligence on existing asset managers and identify new investment opportunities.”

As part of his day-to-day role, Dominik attends to clients, meets managers and writes the firm’s monthly investment comment. Client acquisition is mostly focused on their core target pool (entrepreneurs and wealthy families). This comes only after having established a rapport of trust.
“The key challenges these days are high valuations, markets that are distorted by central bank actions and political risks. Clients want capital preservation but also capital appreciation. We will achieve the first goal by diversifying across asset classes, regions and strategies.

By picking attractively valued and partially overlooked strategies or geographies we seek to achieve the second objective. Depending on our clients’ profile, we overweight one objective over the other.
“The regulatory environment and administrative requirements have become increasingly cumbersome and continue to absorb resources. By choosing our clients carefully, we are minimizing regulatory issues.”

Building a strong and loyal team is imperative. “Our staff is instrumental to the success of our firm and they ensure the quality and consistency of our service. Staff turnover is very low as we strive to provide a good work/life balance.”

Company: Kehrli & Zehnder Global Wealth Management
Name: Dominik E. Zehnder Email: [email protected]
Web Address:
Address: Gartenstrasse 33, CH-8002 Zurich, Switzerland
Telephone: +41 44 222 1818

10 Relationship Challenges in Family Businesses and Legacy Families
Family OfficesWealth Management

10 Relationship Challenges in Family Businesses and Legacy Families

At Aspen Consulting Team (ACT), we work with family businesses and legacy families as they walk the balance beam between love and money, socio-emotional wealth. Using a metaphor from the golf course—we go into the deep weeds and thicket of family dynamics and get the ball out to the short lgrass—so family members and their financial and legal advisors can move it forward. We work with family businesses and legacy families at the top 1% financial level.

The organizing principle in our consultation, including work with our colleagues David Bork and Dr. Will Bledsoe at Family Business Matters Consulting, is based on the Biblical message— build before the rain, from the story of Noah. There will be “rain” in a family business and a legacy family. We believe four pillars—alignment, boundaries, communication, and competence—provide a framework for building strategy, synergy and structure for managing the relationship challenges and conflicts in a family business and legacy family.

Over the years, we have worked for family businesses with 5 employees to over 15,000 employees and legacy families with $50 million to $5 billion in assets under management. At the ownership level, the relationship dynamics are very similar. It is first about trust, then alignment, boundaries, communication and competence at the ownership, family and management levels.

Recently, we helped a third generation (G3) family business transition to the fourth generation (G4). This involved the owners doing both strategic and succession planning for the business and establishing a Family Council. We have worked with several family businesses where there was a death by suicide of an heir. Helping these families understand and heal from such a tragedy was critical to their continued success.

How ACT helps families sustain and grow their wealth
Both psychological and economic theories frame our work. Our task is to resolve and restore breakage in relationships that block and prevent positive economic interaction, longevity and harmony in a family business and legacy family. The foundation of a good family is love and care, and the goal of a successful business is profit and return on investment. These can be in conflict in a family business and legacy family.

We define a family business as a company in which two or more family members hold a management, board or ownership position. We define a legacy family as a family unit or office that has $50 million dollars or
more in assets under management. Our work is influenced by six theories as we help families sustain and grow their wealth and at the same time, maintain personal and relationship harmony.

1. Love and money in a family business or legacy family are symbiotic and immiscible—they are connected but don’t mix together naturally. Love and money, what we call emotional economics, influences nearly everything in business and family relationships. There are no major emotional decisions without an economic dimension, and no major economic decisions without an emotional dimension. Pre-nuptial agreements are an example.

2. Family business and legacy family members must have “thick trust”. The first stage of psychosocial development is trust versus mistrust. We believe there are three types of economic trust. Exchange trust is the basic form, “trust, but verify”’, where we expect to be served and to pay for the meal we ordered. Mutual trust, “tit for tat”, is the most typical type of transaction in business, where we move in response to the first actor. Thick trust, long-term interactions and exchanges, is the only, but hardest, trust strategy for family members to avoid discord and have the advantage of effectiveness and speed. Negotiations are an example.

3. When emotions compete with economics, both lose. In many important decisions, the emotional tail can wag the economic dog. The oldest part of our brain is the emotional system. It evolved long before our economic system to help us survive. When our emotional system works in a healthy and mature manner it will provide a positive guide to decisions, when it malfunctions in business and economic decisions it will derail productivity, profit and reputation. Succession is an example.

4. A healthy endowment effect can turn into an unhealthy entitlement effect if not managed. Nearly every parent wants to endow his or her child with special opportunities. There is a thin line between endowment and entitlement. Entitlement happens when endowment expectations are not clearly defined and managed and financial gifts enable negative behaviours. Addiction is an example.

5. Every generation must manage their ‘commons’. The Boston Common, the historical park in downtown Boston, is an example of what economists call “the tragedy of the commons”. After 200 years of commercial use by many, it was closed because of overuse by a few. Affluent families and family businesses must have agreements on how to grow resources, limit extravagances and avoid rivalries and feuds that divide and destroy the common assets. Family constitutions are an example.

6. Parents must identity, understand and manage the dynamics of equality and equity, the ‘fairness monster’, among their children. Equality is identical apportionment and exact division of quantity. Equity is justice tempered by ethics and division based on contribution and need. One illustration is how the turkey is carved at the dinner table. Equality would mean that everybody would get the same size and type (white/dark meat) of turkey. Equity would mean that the carver would divide the turkey according to needs and perhaps even wants. Balancing these two dynamics in a legacy family requires the Wisdom of Solomon. Gifting and distributions are examples.

How love and money are mixed for the best possible outcome for families, businesses, and individuals is where the rubber meets the road. Relationships follow predictable, evolutionary life cycles that can either create advantage or discord. For legacy families and family businesses to successfully grow, share and transfer financial assets and social values, attention needs to be given, equally and systematically, to wealth, interpersonal, spiritual and human capital, what we call WISH™ investments.

Family wealth has a history of not surviving beyond the 3rd generation, called “shirtsleeves to shirtsleeves”. Dr. John Ward, professor at Kellogg School of Management and co-founder of Family Business Consulting Group, Inc., conducted a study on family business succession. He found that only 30% of family companies survive through the second generation, 13% survive through the third generation and only 3% survive beyond the third generation. Less than 5% continue through appointment of a successor from the next generation.

In one effort to answer the question of why the transfer of wealth in an affluent family is so problematic, Roy Williams and Vic Preisser, authors of Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, interviewed members of families with net worth ranging from $5 million to over $1 billion. They asked questions about how the failed transitions of wealth differed from the successful ones. They found that the involvement of all family members in the decisions about the transition of wealth required both trust and communication skills, which helped avoid the dynamic of parents dictating the future to their children.

Conducting a quantitative assessment, Dr. Michael Morris, along with Roy Williams, Jeffrey Allen, and Ramon Avila, interviewed 209 family business owners from the second and third generations. Their report, “Correlates of Success in Family Business Transitions’” concluded that relationships within the family had the single greatest impact on the successful transition of ownership and wealth: The dominant variable in successful business transition appears to be family relationships. Family business leaders’ first priorities should be building trust, encouraging open communication, and fostering shared values among the family members.’

The work of Morris, Williams and Preisser reached the conclusion that the major causes of financial failure have more to do with psychological patterns in the family than with legal, financial or business planning. According to their research, 30% of legacy families are successful in transiting wealth, but 70% lose control of their assets.

• Success rate in legacy families (30%);
• Collapse in trust and communication in the family system (42%);
• Failure of parents to adequately prepare their heirs for creating and managing the wealth (17%);
• Lack of proper governance structure (8%); and
• Insufficient tax and legal planning (3%).

Both financial interest and interpersonal dynamics can be successfully managed when family leaders give systematic attention to the following four areas.

Alignment in a family business and legacy family requires collaboration, coalition and movement to the same target. Family businesses are poised for long-term success when family members, owners, executives and employees have similar values and are united toward the same goals. The best companies are the best aligned. Strategy, purpose and organisational capabilities must be in sync. Without clear alignment family businesses are vulnerable. Even hairline cracks in the family business can widen and invite disaster.

On the one hand, family businesses are the source of family happiness; on the other hand, they can be the source of family heartbreak. Misalignment creates discord, tension and conflict. Alignment creates a process that reinforces the company strategy, increases family and organizational harmony and promotes accountability and profitability. Keep the focus on the business! Its success is what makes other things possible.

Like a Trefoil clover, family businesses have three components: the family, ownership and enterprise. Boundary skills determine how family members, owners, non-family executives and employees will interface for the advantage of the business. ‘Good fences make for good neighbours.’ Unclear boundaries are at the root of many of the problems in family business. Boundaries need to be clear and constantly maintained if they are going to do the job for which they were intended. In order to create and maintain good boundaries family business leaders must define roles, responsibilities and accountability for owners, managers and employees and methods for handling certain personal matters. Family members must not meddle in areas for which they do not have responsibility. When a business is large enough to hire family and non-family professionals, use outside advisors, and establish governing boards clear boundaries prevent conflicts of interest.

Communication is one of the recurring issues that owners and executives in family business identify as a major obstacle to productivity. In a business with more than 200 employees, about 14% of the working week is wasted because of poor communication between staff and management. In a family business, poor communication can turn into personal and professional conflict. It is a family’s ability to manage and resolve conflict that determines its maturity and emotional health. Communication is more than transmission of information; it is the interactional heartbeat of the organisation.

All communication is grounded in relationships. Unless we’ve been otherwise educated, most of us unconsciously enact styles of communication and conflict we learned in our families and carry them into the workplace. Whether it’s resolving relationship issues, confronting challenges, managing conflicts or planning for succession, effective communication skills guarantee that every situation will be addressed and resolved in a thoughtful, deliberate, constructive and comprehensive way. Clear, constructive communication must always be the goal.

Competence is about the maturity, fortitude and talent to be an effective leader and team member in the business and successful leader in the family. In a survey of directors serving on boards of family-owned businesses, only 11% reported that the company was effective at developing talent. From those making decisions in the boardroom to those carrying out the day-to-day operations, everyone contributes to the success of the business by knowing how to play his or her position at the highest level. You can’t afford people who are doing just OK. You need high performers.
Due to the unique and subtle connections in a family business, leadership and employment standards must be clearly defined, established, reinforced, and rewarded (or not) at every level in the company. This is critical in any succession plan and process. The family in business must understand sound business practice and how it is affected by family dynamics. Competency principles and procedures of leadership and employment improve the company culture.

Roles and responsibilities must be consistent with the company strategy and at the same time encourage every employee to have a personal feeling of ownership and investment, to think and act like a leader, and to give their best efforts. This entails attracting, training, retaining and rewarding talent, having the right people in the rights seats and the appropriate family members at the Family Council table.

MAPS for Men, A Guide for Fathers and Sons and Family Businesses (first person – Edgell)
MAPS for Men, A Guide for Fathers and Sons and Family Businesses (M4M) involves over forty years of studying male psychology and working with professional men, especially around the relationship between fathers and sons. I first presented a paper on this topic in 1995 at the Vienna Chief Executive Organization University.

Tom had a very successful career with a national business before starting his training firm. When Tom, who has a master’s in psychology, joined me at ACT, we decided we needed to work on our relationship before we worked with other fathers and sons on their relationships. M4M is one of the results. We are both a little intense and competitive, so it was an interesting and fulfilling process.

MAPS for Men is about how our relationships with our fathers shape much of our self-esteem and professional drive and how this impacts a family business. Interestingly, before writing M4M, I had never worked with a female CEO; since writing M4M I now work with two female CEOs.

Succession planning in a Family Biz
Succession in a family business is often the greatest challenge and it impacts many people, from family members to employees. We have been and are currently involved deeply in helping family business founders’ deal with what we call ‘succession anxiety’. David Bork, in his book, Family Business, Risky Business, identified the issue within a family business, “When succession is left to the whims of fate, the family’s empire begins to crumble under waves of emotion”. There are two succession paths, often walked at the same time, management succession and ownership succession.

On average, succession in a family company happens about every twenty years and can create a flood of anxiety, rumours and speculations. In the best of times, succession is a form of stewardship, where our legacy is not limited to what is accomplished in our lifetime, but extends in the hearts, minds and actions of those who follow us. One measurement, in the words of Ken Blanchard from his book, Lead Like Jesus: Lessons for Everyone from the Greatest Leadership Role Model of All Time, is “how well we have prepared others to carry on after our season of leadership influence is completed”.

The endgame and often the most challenging issue in a family business, is the process of transitioning ownership and management from one generation to another. Ivan Lansberg, co-founder of the Family Firm Institute and author of Succeeding Generations: Realising the Dream of Families in Business, emphasises the central problem, “the lack of succession planning has been identified as one of the most important reasons why many first-generation family firms do not survive their founders.” In our work, we address the father-son succession process in a family business as both a management and ownership issue.

Family financial, political and psychological anxieties can be roadblocks and barriers to succession development and execution. John Davis, an expert on family business management and lecturer at Harvard Business School, believes that family elders are appreciated for their wisdom, but not necessarily liked by all the relatives. “Leaders tell me that they have a gratifying but tough and often thankless job. Many successful family business leaders tell me that they spend half of their time working to address family and ownership issues and to maintain unity.”

It is a guarantee that tension will increase during what John Ward and Denise Kenyou–Rouvinez, in their book, Family Business Key Issues, call the “hot phase” of the succession process because of the intense work of combining emotions and economics. Customers, clients, non-family managers, financial institutions and family members can apply pressure. The tension can cause announcements, solutions and directions to be presented before issues are clearly defined and processed. How important decisions are handled and communicated will depend on the family and company culture developed over many years.
Relationships follow predictable stages that can either create advantage or discord. In healthy families, an endowment effect takes place the day a child is born, we give our children special emotional and economic attention simply because they are our children. When an adult child joins a family business this can carry over into the business in the form of an entitlement effect and a special position that can create tension in the family and the business.

Succession anxiety can come from many directions. The father-son team and their advisors, must manage not only the corporate process but also the relationship dynamics. A basic psychological rule is that the first thing to fall into a void, real or perceived, is anxiety. There are two types of anxiety. Normal anxiety, like fear, is essential to the human condition, proportionate to the threat, and disappears when the risk is adjusted or removed. Neurotic anxiety is unspecific, vague and attacks the core foundation of a person’s life.

Rollo May, a minister and one of the best known American existential psychologists, wrote in his book, The Meaning of Anxiety, “Anxiety is the apprehension cued off by a threat to some value that the individual holds essential to his existence.” Succession can be a time of anxiety, when a father is measuring how he lived his life and a son is planning how he will live his life. Spouses, siblings, children, employees and customers will often have an emotional and perhaps a financial stake in the process and outcome.

Working together in a family business can be a long trek of personal development and organisational transformation for a father and son. The succession hot phase can be like be a fork in the road or a mousetrap on a major highway. Relationship issues, like entitlement, parentage and nepotism, must be understood and managed. The primary skills needed, by both the father and son as they move through this process, are high trust and clear communication around ownership and management issues.

Succession benchmarks are driven by time. The first issue is the transition style of the founder/owner, the second is the selection of the next family business leader, (either family or non-family) and the third is in the task of transitioning resources and power to the next generation.

The first step in the transition and succession process is to define the retirement style of the founder/CEO to overcome a sense of impermanence and indispensability. Harvard Business School Professor, Dr. Jeffrey Sonnenfeld, interviewed executives from over thirty of the best-known corporations for his book, The Hero’s Farewell: What Happens When CEOs Retire. He concluded that many chief executives become like folk heroes within their organisation and depart (or not) in four ways.

• Monarchs – who do not leave until they are forced out or die
• Generals – who leave only when forced out, but plan a return to power
• Governors – who rule for a defined term, then pursue other ventures and interests
• Ambassadors – who leave willingly, then returns to a high advisor role

It is naturally tempting, but simplistically dangerous, for founding parents to direct, or coerce, their children into the family business or for children to assume a role in the business without maturity and autonomy. Every founder/parent needs to do a realistic assessment of what the business permanence, its economic potential, governance structure and management systems, would look like with one of more of his or her adult children in control.

Many younger generation members grew up in the business, doing summer jobs and listening to business conversations at the dinner table. This does not qualify them for a serious management role in the company. While blood may be a qualification for entry into the family business, adult children must have the following attributes in order to grow and succeed in the business. The founder parent is in charge of filling out the details on this list.

• Character: trust and communication
• Competence: education and performance
• Commitment: loyalty to the company and family
The question of when a family heir should start working in the family business is one we are often asked. There is no obvious answer. The life cycle between a family business leader and his or her adult child will have an impact on the decision.

Psychological development influences the business relationship between a father and son. John A. Davis, co-author of Generation to Generation: Life Cycles of the Family Business, earned a doctorate from Harvard Business School. Renato Tagiuri received his PhD from Harvard and completed the program in psychoanalysis at the Boston Psychoanalytic Institute, before teaching and writing extensively on the topics of management, leadership and family business.

Davis and Tagiuri used their business and psychological backgrounds to conduct a research project focused on the quality of the work relationship between a father and son. They identified and examined the respective life phases of the father and son based on Erik Erikson’s concept of life stages.
They concluded that the quality of the work relationship varies as a function of the respective life-stage development of the father and son. They presented their research in a paper entitled “The Influence of Life Stage on Father-Son Work Relationships in Family Companies.” At an early age, most sons admire and even worship their fathers. In a family business, this could be the beginning of a thirty-year journey resulting in the father also being the boss.

The successful long-term growth of a family business, as with every organisation, requires turning over power to a successor. Max Weber, the German sociologist, referred to this process as the institutionalisation of charisma and saw it as one of primary challenges of leadership.

Succession in a family business is a process not an event. In the best-case situations, it is a 3-5-year process, where a strategy is in place before the tension or crisis of transition. This requires a realistic assessment of the skill level of their candidates for handling the wealth or business, pragmatic discussion with all involved family members, practical involvement of senior management and balanced advice from outside legal, financial and business advisors.

The paradox is that only a few family companies give serious attention to the task of handing the business down to the next generation. Resistance factors can come from the founder, family owners, senior management teams and/or family members.

The second step of succession—outlining if, when and how a successor from the family will be the next leader—can be a time of celebration or challenge. The heir should be graded against these twelve ideal standards.
1. Innate interest in the business (pre-teens)
2. Natural leadership abilities in the family and school (teens)
3. Exposure and work in the company (late teens)
4. Excellent education and training experiences (early 20’s)
5. Apprenticeship in similar industry (middle 20’s)
6. Success in a comparable business (late 20’s)
7. Desire and commitment to join the family business (early 30’s)
8. Successful progression through different department (mid 30’s)
9. Senior managerial responsibilities (late 30’s)
10. Partnership with the company CEO (early 40’s)
11. Executive and personal leadership respect in the family and company (40’s)
12. Mature succession, the ‘de facto leader’ (mid 40’s)

It is important to determine the qualifications of the successors and to avoid the trap of an inadequate successor, from within or outside the family, such as the following persons.

• Good Son – a person with family loyalty, but limited leadership skills
• Loyal Servant – a conscientious helper, but impotent leader
• Watchful Waiter – a good performer, but with inadequate executive abilities
• False Prophet – a talented person, but with the wrong expertise
• White Knight – an exceptional leader, but with limited commitment to the business

The third step is to create a successful succession. In a family firm this will have four stages.
1. Owner-Management Stage – father is the only family involved in the business
2. Training and Development Stage – the son learns the business
3. Partnership Stage – father and son share percent of ownership and management
4. Power Transfer Stage – responsibilities and control shift to the successor

When family leaders and members work well together in the family and the family business, they can promote a level of leadership transition, company loyalty, brand commitment, long-range investment, effective decisions, rapid action and stewardship impact for which nonfamily businesses yearn, but seldom achieve.

Though we have been involved with many families at their most intense levels, we have never been fired from a case and only once left a case unresolved. The feedback we get is that we are genuine and pragmatic. As financial success increases in a family the relationship complexity and intensity also increases, thus we have worked with some clients over several years.

We are a small consulting firm in a mountain resort town. Professional relationships are key to our success and how to scale is always a challenge.

Company: Aspen Consulting Team, LLC
Name: Edgell Franklin Pyles, PhD Thomas Edward Pyles, MA
Email: [email protected]
             [email protected]
Web Address:
Address: Box 503, Snowmass, CO USA 81654
Telephone: Edgell +1 970-948-1415, Tom +1 303-518-3520

Adar Capital Partners: Hedging Their Bets
Private ClientWealth Management

Adar Capital Partners: Hedging Their Bets

Adar Capital Partners provides a range of investment vehicles which stand out thanks to their forward thinking attitude and collaborative work ethic, as Diego outlines.

“Here at ACP our investment decisions are not biased by the media, we invest in fundamentals. As such we prepare portfolios for significant political and social events such as Brexit and the US Elections, so that we are able to consider the options. We have a small and efficient structure with great communication and full support between our team, all of
whom work together to ensure that we offer our clients the best possible service. Our staff share the same values, investment philosophy and culture, which makes for a great team whose core focus is always our investors’ interests.”

The firm’s investment approach concentrates on a few annual investments with mid-term horizons of two to five years. After fundamental analysis of each investment, the firm keep it until they reach a target, even when in the short term it does not perform as expected. This patience, dedication is what sets the firm apart, as they go the extra mile, traveling to every company they invest in in order to understand the essence of the deal and monitor the investment.

Moving forward, the future looks exciting for ACP, as Diego concludes by discussing how well the firm has performed over the past 12 months and how the company is prepared to adapt around new developments it foresees.

“During the past year we obtained 30% net return in US dollars for our investors. We believe that current portfolios still have more success to achieve, and as such we are confident that 2017 is going to be also an excellent year achieving good results and providing great satisfaction to our investors.”

“Looking ahead, we believe that the world is changing and that brings new challenges for us to adapt to and educate our investors around. Economy, politics, information and technology are changing the way to invest and these all represent opportunities which we look forward to exploring.”

Company: Adar Capital Partners Ltd
Name: Diego Marynberg
Email: [email protected]
Web Address:
Address: One Capital Place, Shedden Road, George Town, Cayman Islands

Winners Announced October 2016
Private ClientWealth Management

Winners Announced October 2016

Best in Financial Communications & Investor Relations 2016
Company: Capital Link, Inc.
Name: Nicolas Bornozis
Email: [email protected]
Web Address:
Address: 230 Park Ave, Suite 1536, New York, NY 10169
Telephone: 1 (212) 661 7566

Business Elite – CEO of the Year 
Name: Company Fusion Ltd 
Email: [email protected] 
Web Address:
Address: 3rd Floor, Tring House, 77-81 High Street, Tring, Hertfordshire HP23 4AB United Kingdom 
Telephone: 44 (0)207 993 3368

International Real Estate Excellence 
Company: UK Legal Estates
Name: Mohammed Usman 
Email: [email protected]
Web Address:
Address: 99-101 Wolseley Road, Sheffield S8 0ZT
Telephone: 0114 2585750

International Real Estate Excellence Awards
Company: Zest Sales Lettings & Investments
Name: Glenn Perry
Email: [email protected]
Web address:
Address: 1a Mile End, London Road, Bath, BA1 6PT Telephone: 01225 481010

Rising Cost of Risk in Wealth Management
High Net-worth IndividualsWealth Management

Rising Cost of Risk in Wealth Management

Can you tell us about what your company does?

As innovative online investment managers, we offer clients direct low cost access to high end wealth management that is smart, commonsense and modern. Everything we do is underpinned by 100%
transparency and treating our clients fairly.

How long has the firm been going for and where are your offices based?

The company was launched in 2009 as a reaction to the 2008 financial crisis and a desire to challenge the status quo. We are based just off Sloane Square, Westminster, in London which is very central but not in the traditional heartlands of either Mayfair or the City and the cultures that purvey the traditional establishments there.

What kind of clients do you serve and how do you approach them?

Investors who come to us are looking to bypass expensive advisers, layers of inefficiencies and high fee underperforming traditional active funds. For UK clients our entry level is £15,000, either direct or via an ISA or SIPP wrapper. For overseas clients our entry level is £150,000 or the equivalent in Euros or US Dollars. We are also delighted to work with corporates and charities but whatever the size of our clients, the same levels of fees, openness, approachability and respect apply to all.

Our approach is simple, straightforward and personal. We do not believe that anyone should invest with us unless they fully understand our offering and appreciate that no manager has a crystal ball or can predict the future. What we aim to do is to minimise costs and risks, preserve capital and produce consistent positive returns. Everything we do is underpinned by 100% transparency and treating our clients fairly.

How are wealth management firms fighting battles on two fronts; financial regulations resulting in increasingly squeezed margins, and – fundamentally – the rising cost of risk?

As originators of the True and Fair Campaign, launched in 2012, calling for 100% transparency of fees and holdings, as well as a Code of Ethics, we do not believe that financial regulations have created a truly competitive, or customer centric, market in fund management.

The industry has operated more like a cartel, profiting from a lack of price competition, new entrants, and embedded conflicts of interest.

Rather than take a strong hand on regulation, the UK regulator has seemingly deferred its responsibilities to conflicted trade bodies. The end result of this dereliction of duty is a complete lack of transparency of fees or holdings, product mislabelling, closet index tracking, inflated research costs and risk and suitability tools that are not fit for purpose.

The industry only has itself to blame for increased regulation as they have failed to put their own houses in order.
In terms of margins, the average operating margin for a UK drugs company valued at more than £2 billion is 23.4%, compared to a stonking 44.8% for a UK large fund management company in this bracket. It is no wonder that the industry is so reticent to be honest with their customers regarding their charges and fights any transparency reforms – like turkeys they do not seem to want to vote for Christmas.

To what extent do you agree that as many as 81% of wealth managers cite conduct risk as a significant focus in their firm. With this is mind, how is your firm tackling risk in your company?

According to the FCA, conduct risk centres on Politically Exposed Persons (PEPs), anti-money laundering and sustainability, but I think it can be encapsulated by how a wealth manager’s proposition and service builds and maintains trust. We focus on trust because it is fundamental to everything.

We tackle risk by ensuring we treat our customers fairly, abiding by the FCA’s very pragmatic overarching principles of ‘fair, clear and not misleading’ and apply the ‘would I tell or sell this to my mother’ test. I believe actions speak louder than words. So our proof of promise is that we invest significant sums of our own money alongside clients, on exactly the same terms and fees.

If a firm is confident they are delivering on these principles, they should not be concerned about conduct risk – the issue is that behind the slick marketing most are not putting customers first, so they should be worried.

How you can give our readership a high return on their investments?

We cannot control or predict future returns – no one can. In our investment team’s long experience, the best recipe to preserving wealth and achieving consistent returns is by staying vigilant, focusing on fundamentals, having a contrarian mind-set, concentrating on asset allocation not stock picking, which accounts for over 90% of returns, and constantly seeking to minimise costs and risk.

What challenges lie ahead for your company in 2016?

As a new challenger, our challenge is connected with brand building.

Our seven-year track record proves our innovative approach delivers, we just need to continue building consumer / investor awareness without the deep pockets of the bigger traditional brands.

Another challenge is operating a 100% fee transparency model with no hidden costs at any level when we are not playing on a level industry playing field. Traditional wealth and investment managers continue to hide between 50 – 85% of their true Total Costs.

Can you outline any specific industry based challenges you are facing now and in the future?

Via our True and Fair Campaign, which led to us contributing text for Article 24 in MiFID II, as well as the fee calculator in PRIPS, the industry is facing a seismic change in 2018. All wealth and investment managers will have to show all costs in one Total Cost number. This will be a huge challenge for tradition wealth managers as their clients will realise the fees they think they are paying are typically only one third of the true total. New entrants such as SCM Direct will finally be competing on a level playing field, and investors will finally be granted the basic consumer right of knowing how much they are paying.
Looking ahead to the future, if we can continue to thrive as a company and identify any opportunities in the market from which we can achieve more success for both our clients and ourselves, without compromising our principles and ethics, we shall be delighted.

Company: SCM Direct
Name: Gina Miller
Email: [email protected]
Web Address:
Address: 2 Eaton Gate, Westminster SW1W 9BJ
Telephone: 44 (0) 7838 8650

Three Quarters of High-net-worth Individuals plan to Invest more in 2016
Private BankingWealth Management

Three Quarters of High-net-worth Individuals plan to Invest more in 2016

When asked “Do you intend to invest more in the first six months of 2016?” 76 per cent of clients contacted by deVere Group, one of the world’s largest independent financial advisory organisations, said Yes.

14 per cent responded No and 10 per cent did not yet know.

767 people with investable assets of £1m or more from countries including the UK, the U.S., Australia, the United Arab Emirates, Qatar, Hong Kong, South Africa and Switzerland were surveyed in January 2016.

Of the findings, Nigel Green, founder and chief executive of deVere Group, comments: “The results of this poll clearly show high-net-worth individuals now have a strong appetite to use the cash that they have held in reserve to top up and diversify their investment portfolios.

“The survey overwhelmingly demonstrates that they are aware of the opportunities to buy high quality equities at the prices they want to pay. They are seeing more favourable choices to boost their portfolios for the longer-term.

“It is a sound investment strategy to put new cash to use in the market whilst prices are relatively low. Capitalising like this on the attractive long-term performance of stock markets is a time-honoured way that investors can successfully build wealth.”

He adds: “No-one can predict exactly what the markets will do in the immediate future and it’s too early to say if this is or isn’t the bottom of the market. But our poll suggests that high-net-worth investors believe that it is close to the bottom and that there are major buying opportunities.”

The deVere CEO concludes: “It would appear that many high-net-worth individuals kept their powder dry during 2015, as the markets rose then fell and as we braced ourselves for the first Fed rate hike in almost a decade. But any qualms they might have had last year are now countered by more attractive prices.

“They are moving away from a preservation approach by diversifying their investment portfolios. As shown by decades of financial market data, this is the correct approach to risk management.”

BlueCrest to Become Private Investment Partnership
Private FundsWealth Management

BlueCrest to Become Private Investment Partnership

Following the transition, BlueCrest will manage assets solely on behalf of its partners and employees.
It will continue to trade all current major strategies and retain all the firm’s offices around the world and anticipates strong growth in employees and AUM over the next several years under the new business model.

During its 15 year history, BlueCrest has delivered trading profits of over $22bn for its investors, and has won numerous industry awards for excellence. It has built an industry leading global team of over 250 investment professionals in nine offices operating in fixed income, currencies, emerging markets, credit and equity trading.

However, ongoing secular changes in the industry, including trends in fee levels, the cost of hiring the best trading talent, and the challenges in tailoring investment products to meet the individual needs of a large number of investors, have weighed on hedge fund profitability. A Private Investment Partnership strategy of concentrating on a reduced number of funds, managed exclusively on behalf of BlueCrest’s partners and employees, will facilitate higher returns and greater profitability for the firm’s stakeholders, and give it greater flexibility to compete aggressively for trading talent.

BlueCrest’s existing partner fund, BSMA, will continue to hold assets managed in the fixed income, currency and credit trading strategies, and the BlueCrest Equity Strategies Fund and the BlueCrest Emerging Markets Fund will be retained as the vehicles through which partners and employees invest in equity market and emerging market trading strategies respectively. All other funds, including BlueCrest Capital International, and the AllBlue Fund, are expected to close during 2016.

The process of closing the client funds has been agreed with the Boards of Directors of those funds and communications with clients as to the timetable is now taking place. Clients are expected to receive approximately 75% of their investment capital before the end of January and 90% by the end of Q1 2016. The divestment of investment portfolios will be carried out in an orderly manner, balancing the requirements for speed and value for investors.

BlueCrest’s founder and Chief Executive, Michael Platt, said:

“Firstly, I would like to thank all of the investors who have entrusted money to the BlueCrest funds over the last 15 years and to wish them well in their future investment endeavours.”

“We are embarking on an exciting new phase in the development of BlueCrest. We will be stronger and more flexible under our new business model, and see exciting opportunities to grow significantly in terms of numbers of trading teams and assets under management. The new model provides the opportunity to create significant value for our partners, our traders and our staff, due to a step-change in our profitability. It will also allow us to enhance further our ability to attract the highest quality investment talent in markets across the globe. We have delivered industry-leading returns to our investors over the past 15 years but believe that BlueCrest is now better suited to a Private Investment Partnership model.

We have always been an industry innovator, and this transition will be no exception. We have sold and repurchased a stake in our business, we have seeded new strategies using bank loan financing, and been among the first to launch a permanent capital vehicle in the UK. We seeded and spun out BlueMountain Capital and more recently have spun out and divested of a significant stake in Systematica, a major business division. This transition, though not unique, will make us one of the largest and most diverse managers to adopt a Private Investment Partnership model.”

Wealth Management Tech Firm WDX Reports 115% Revenue Growth
Private BankingWealth Management

Wealth Management Tech Firm WDX Reports 115% Revenue Growth

Increasing demand for regulatory compliance, digitisation and business insight within the UK’s wealth management sector has enabled WDX, the sector’s leading CRM software company and only dedicated Microsoft Gold Partner to announce 115% growth in revenues over the past 12 months to £5.4 million, with further significant growth envisaged in the next year. Announcing its listing as the 11th fastest growing start up company in the UK in the coveted Sunday Times’ Sage Start Up Track 15 and further client wins and project completions including most recently Brown Shipley, WDX has become the fastest growing technology provider in the UK wealth sector.

The wealth and investment management industry is finally coming to terms with the use of the web as an important client engagement tool and the need to ‘join’ digital interaction with the client engagement, client management and operational processes within firms. A recent study by Scorpio Partnership found that 63% of UK wealth clients would now consider leaving (their WM) if they cannot make investments directly and firms now understand that technology is the key enabler to remain relevant to this changing demographic.

WDX’s focus for 2016 is to continue to drive digital transformation and business change to the wealth sector and to provide exceptional client insight capability; providing a future-proof and best-of-breed CRM backbone to UK wealth firms.

Along side the exceptional technology and digital connectivity capabilities of its award-winning Microsoft Dynamics-based CRM platform, WDX is launching ‘WDX Insight’; a business intelligence module that will bring wealth firms unrivalled data mining and analytics capability to deliver fast and efficient client and intermediary insight, sales and marketing metrics and enable best-in-class performance across all areas of Client Suitability, KYC, sanctions checking, revenue generation and conduct risk mitigation.

WDX’s success over the past three years has been founded on the concept that a Customer Relationship Management framework, specifically tailored for the Wealth Management sector, can change the way an organisation acquires prospective clients through digital and traditional marketing engagement. It also allows forward thinking firms to transform the way they organise, manage and communicate with existing clients and intermediaries allowing innovation and new efficiencies in day-to-day activity while evidencing all aspects of client interaction and adherence to conduct of business guidelines.

WDX has continued to grow its team to over 40 staff and has office locations in Shoreditch London, Luxembourg and the Baltics. An office in Singapore is planned for 2016 to launch WDX in Asia and increased focus on the UK and more traditional European markets remains key for 2016. The existing UK and maturing regulatory frameworks in Europe and Asia will drive technology innovation and demand in the areas of conduct risk and client management.

Commenting on the firm’s success, Mr Gary Linieres, CEO, said: “For the first time in the 15 years I have been involved, the wealth management industry in the UK is genuinely going through a period of fundamental technological change. This is being driven by a vigorous and motivated regulator, a new generation of demanding clients, innovative competition and apprehensive boardroom directors, all of whom are demanding better insight, detailed data, modern tools and a general raising of standards in conduct, client management and new client acquisition.

“I find it amazing that many wealth management firms still have only scratched the surface of what is possible with modern CRM and Digital technologies. Many firms are facing a demographic time bomb within their ageing client bases and have no real strategy of how to modernise the engagement models and business processes required to meet the needs of a demanding new generation of wealth. Those that embrace change will not only improve their growth potential, they will be able to drive a cultural change in their organisations and gain real insight in to how well their business and people are performing.

“WDX’s growth over the past two years has been a reflection of the changing market and the development of a leading technology solution to help meet that change. However, what really pleases us is getting strategically important clients like Brown Shipley live and leveraging technology to evolve the way they operate and fundamentally change the culture of their organisations for the better.”

Rob Kitchen, Chief Operating Officer at leading UK Private Bank, Brown Shipley part of the KBL group, said, “We have been working hard with WDX over the past twelve months and are delivering a CRM solution that will build upon our reputation for exceptional customer service. This is a significant technological advancement for us and dramatically improves our ability to manage our internal client management, compliance and new client on-boarding activities efficiently.”

The WDX CRM solution is based on the very latest Microsoft Dynamics CRM platform and is specifically deployed to enhance digital marketing and communications, sales performance, client on-boarding, suitability, risk profiling, client management, client operations, business insight and the mobile experience of wealth managers.

Outliving Money is Top Retirement Concern According to New AICPA Survey
High Net-worth IndividualsWealth Management

Outliving Money is Top Retirement Concern According to New AICPA Survey

The AICPA PFP Trends Survey of CPA financial planners—many of whom work with high-net worth individuals—found that more than half (57%) of CPA financial planners cited running out of money as the top retirement concern for their clients. This was followed by uncertainty on how much to withdraw from retirement accounts (14%) and healthcare costs (11%). The survey, which includes responses from 548 CPA financial planners, was fielded from February 3 to February 26.

When asked about the top three sources of clients’ financial and emotional stress about outliving their money, planners cited healthcare costs (76%), market fluctuations (62%) and lifestyle expenses (52%) as the primary issues. Additional causes for financial stress were unexpected costs (47%), the possibility of being a financial burden on their loved ones (24 percent) and the desire to leave inheritance for children (22%).

“With all of the financial uncertainty surrounding retirement, running out of money is directly tied to a number of issues that high-net worth clients are juggling simultaneously,” said Lyle K. Benson, CPA/PFS, and chair of the AICPA’s PFP Executive Committee. “To help alleviate their clients’ longevity concerns, CPA financial planners integrate tax planning strategies to maximize income in retirement. This approach considers a client’s current situation and anticipates their lifestyle spending in retirement to ensure they stay on track in the event of an unexpected life event.”

The survey results showed that unexpected events are not abstract concerns; they are having an impact on retirement planning for a large number of clients. These issues include long-term healthcare concerns (impacting 42% of clients), caring for aging relatives (28%), diminished capacity (26%), divorce (18%), job loss (18%) and adult children returning home (18 percent).

Some of these concerns are becoming prevalent. When asked to compare to client experiences five years ago, respondents reported increases in clients being unexpectedly impacted by long term health care concerns (59%), taking care of aging relatives (43%) and diminished capacity (39%). Taken together, these issues demonstrate the competing challenges individuals face when planning for their retirement and the need for sophisticated planning advice to meet their goals.

“The PFP Trends Survey found that the issues impacting retirement planning are constantly evolving, underscoring the need for a sophisticated financial plan that changes with a client’s situation,” said Jeannette Koger, CPA, CGMA, AICPA vice president of Member Specialization and Credentialing. “The AICPA’s Personal Financial Planning Division is dedicated to offering our members tools and up-to-date guidance and resources so they can continue to meet the complex retirement needs of their clients.”

UK Employers Favour Initial Tax Relief for Pension Contributions
Private FundsWealth Management

UK Employers Favour Initial Tax Relief for Pension Contributions

The survey reveals that a significant majority (68%) of employers favoured retaining at least some level of initial tax relief for pension contributions.

Offering one level of tax relief for all savers was the most popular option (29%), with no changes to the current structure close behind (27%). The Chancellor’s proposal of levelling pension tax relief with the Individual Saving Accounts (ISA) regime polled less than 1 in 4 (24%) of the vote. A further 12% of delegates favoured removing higher rate tax relief for high earners.

Commenting for Jelf Employee Benefits, Steve Herbert, head of benefits strategy said: ‘Employers have had pension duties forced upon them by successive governments, so it is only right that their voice should be heard on this really important issue. And the message is clear – employers want to retain some form of initial tax-relief to encourage pension savings by their employees.

‘It’s also worth pointing out that this is very much a view from the UK employer coalface, with small and large private sector employers represented, as well as many organisations in the third sector and even some large public sector departments. This broad cross-section of organisations provides a very good indicator of the wider employer views on this key topic.’

The survey also revealed that, should a major change to tax reliefs take place, employers want and expect adequate time to adapt current practice and employee communications to the new tax relief environment. More than half of the employers questioned (52%) would ideally like a minimum of two years to undertake such change, with 12% expecting at least three years for this exercise.

Herbert concluded: ‘The employers we questioned have been under increasing and unrealistic time pressures with regard to recent changes to pension legislation, so it’s to be hoped that HM Government listen to this call for adequate planning and implementation time should any major changes arise from this consultation.’

Growth Slows in Challenging Period for Fund Managers
Private FundsWealth Management

Growth Slows in Challenging Period for Fund Managers

Assets managed by the world’s 500 largest fund managers rose by just over 2% in 2014 to reach a new high of $78.1trn, compared to $76.4trn the year before, according to research by global professional services company Towers Watson and Pensions and Investments, a leading U.S. investment newspaper. The Pensions & Investments/Towers Watson World 500 research shows that asset managers have added almost $30trn globally since 2004, despite growth slowing to its lowest rate in a decade.

For the first time, we have observed asset growth at the very large and smaller ends of the size spectrum, but not much in the middle,” said Brad Morrow, Towers Watson’s Americas region head of manager research. “The big, passive houses are the beneficiaries at the large end, while smaller managers are attracting a greater proportion of active mandates as they ‘resource up’ and become more competitive.”

The research reveals that in the past 10 years, the number of independently owned asset managers in the top 20 has more than doubled and now accounts for the majority, overtaking both banks and insurer-owned firms, which both declined in the same period. In 2014, there were 11 U.S.-based managers in the top 20, accounting for nearly two-thirds of all assets, with the remaining managers all being Europe-based.

“We’re in the longest period of almost uninterrupted asset growth since the research began,” said Morrow. “However, headwinds persist not only from markets and the medium-term outlook for the global economy but also regarding asset management’s perceived value proposition and its general role in society. This challenging environment presents an opportunity for innovative and adaptable investment companies to stand out, and we have seen more willingness to engage on these issues than ever before.”

According to the research, traditional assets make up almost 80% of reported assets (45% in equity, 34% in fixed income), an increase of about 12% from the previous year and now totaling over $37trn. Since 2004, assets managed by the leading passive managers have also grown, by almost 13% annually compared to around 5% annually for the top 500 managers as a whole. In 2014, assets managed by the leading passive managers grew by around 12% to reach a record high of over $15trn, up from around $4.6trn a decade ago.

“It’s hardly surprising that passive managers continue to attract institutional assets at such a rate, given the competition for diminishing returns as well as significant innovation in the passive space,” said Morrow. “We would caution investors to look very carefully at some of these passive product claims and to remember that, governance permitting, they are no substitute for real investment skill and good active management.”

Demand for advice surges since the introduction of pension freedoms
Private ClientWealth Management

Demand for advice surges since the introduction of pension freedoms’s head of advice, Claire Walsh, has discussed the figures, which highlighted the increased need for advice following new reforms.

The new data from also shows that:
•Pensions accounted for 49% of all search refinements on the site since the introduction of pension freedoms
•Pension search queries increased 68% from April 2014 – April 2015
•Pension searches on spiked in Jan-April 2015, in the immediate run-up to pension freedoms coming into force, and in July 2015, following the Chancellor’s interim Budget

Claire Walsh is an award-winning Chartered Financial Planner at a Brighton-based independent financial advisory firm. She advises consumers on all areas of personal financial planning including pensions, investments & savings, protection and tax planning, with retirement and inheritance tax planning a particular focus.

Strategic Governance for Family Offices: Why Do It and How to Approach It
Family OfficesWealth Management

Strategic Governance for Family Offices: Why Do It and How to Approach It

Amelia Renkert-Thomas, Co-founder of family business consultancy Withers Consulting Group, outlines the need for governance and the different approaches family offices can take to it, in partnership with the Family Office Association.

Governance, at its most basic, is a system for decision making. Every organisation, from single family offices to multinational businesses, needs some level of governance.

For a family office, effective governance has the following benefits:
– It promotes the shared purpose of the family and helps the office to achieve the family’s vision of success while acting in accordance with the family’s values;
– It can be scaled up or down in line with the complexity of the family, the assets, the clients and the services;
– It creates accountability and so ensures that the family office abides by relevant laws and regulations;
– The governance structure helps to manage risk and complexity while promoting efficient decision-making and transparency;
– The structure operates as designed even in times of extreme stress and conflict.

Many single family offices work effectively with natural governance, where informal decisions are made as and when they are needed. A family office without formal structures, written policies and procedures for making decisions does not lack governance. It simply uses the system of “the way we do things around here”.

Other family offices, particularly those which are more complex or change in a way that makes decision-making more difficult, require a more formal method to ensure that they operate effectively. The respective rights and responsibilities of three separate and distinct groups will need to be clarified. Each will see the family office from a different perspective, having its own needs and objectives:

– Clients look for the family office to provide appropriate investments and/or financial, reporting, tax and admin services. They are concerned about return on investment, timeliness, accuracy, compliance, privacy and risk management. Clients want to make sure that the cost of delivering these services is reasonable and fairly allocated among the various clients
– Members of the management group, who run the family office on a day-to-day basis, have much the same interests as other senior executives. They seek appropriate compensation with upside bonus potential, a safe, efficient and comfortable working environment, the right staff, equipment, third-party relationships and the budget to accomplish the work, the right balance of responsibility and authority, and opportunities for job and personal advancement

– Family members expect the family office to provide services in a way which supports, not hinders, the family’s shared purpose and promoted family legacy and values. They want the family office to make their lives simpler and to enable them to reach their own individual goals

There are simply not enough resources in family offices to satisfy all the wants and needs of each group. As a result, conflict at some stage or other is highly likely.

It doesn’t have to be damaging, though. The different perspectives, needs and objectives of each group can create the energy that, properly harnessed, will make the single family office more successful. The point is to design a decision-making or governance system that will promote optimal intra-group or inter-group decision-making to resolve conflicts effectively and achieve the strategic objectives of the family office.

Natural governance
Natural governance can be efficient and effective, particularly when a small group with common background, values and objectives work together. It is particularly common in smaller family offices where a charismatic individual founded the venture and controls it. But as the family grows and its structures become more complex, it can be very difficult to maintain a natural governance system. New employees, spouses and next gen family members don’t have the background, experience or tacit knowledge to understand ‘the way we do things around here’.

While nimble and adaptable, natural governance can be prone to catastrophic failure when circumstances change. Generally speaking, natural governance will fall short and a more formal governance system will be needed when a larger, more diverse group seeks to exercise joint control and decision-making over the family office. This situation typically arises as the family and the family office grow more complex over time.

Formal governance
Designing a more effective governance system for family offices is a four-step process:
1. Understand the Shared Purpose of the family
The Shared Purpose of a family is a combination of the family’s vision for the future, it’s plans for achieving that vision, and the individual life aspirations of family members, all shaped by the family’s values. No two families have the same Shared Purpose, hence the saying “If you’ve seen one family office, you’ve seen one family office”.

2. Understand the complexity of the family office
The more complex the family office, the more important formal governance will be. This is because the nuanced and unspoken rules that make up a natural governance system, will tend break down as multiple decision-makers try to make complex interlocking decisions. Decisions such as ‘how much liquidity should be maintained at all times?’ implicate management, clients and family; to be made effectively, will require balancing the short and long-term needs and interests of all three groups.

3. Determine appropriate governance structures and policies that suit the shared purpose and complexity
Governance structures and practices need to be formal enough to allow the family office, clients and family to make effective decisions about the assets being managed, but not so formal that decision-making bogs down. Generally, the more complex the family and its assets are, the more structure will be necessary.

4. Implement the new system, including feedback systems to ensure organised accountability
In an effort to design better governance, more than one single family office has adopted a handful of so-called ‘best practices’, written them up in a manual and thrown the manual on a shelf. Those family offices that follow this path are often surprised when conflict resurfaces and everyone in the system reverts to their old patterns instead of following the practices in the manual. ‘Best practices’ are a good starting point, but they are rarely specific or targeted enough to handle the particular circumstances that a family office finds itself in. If instead, family, clients and management have worked together to design a governance system that will fit the family’s Shared Purpose and the complexity of the family office system, the odds of success will increase.

For appropriately situated families seeking greater control and co-ordination over the management of their affairs, a family office can be a valuable tool. However, establishing a family office is only the first step of what should be viewed as an ongoing process, rather than a permanent fix. Much as you would never expect a ten-year-old child to fit into the shoes he wore when he was five, governance that was sufficient in a family office’s earlier years, can’t be expected to function effectively as it evolves and becomes more complex.

Reassessing the suitability of the family office’s governance over time, based on its ability to satisfy a family’s shared purpose and degree of complexity, is key to ensuring that a family office’s benefits are optimised. Designing effective governance requires an understanding of each family’s unique and changing circumstances, and a departure from the notion that ‘best practices’ are always best.

Socially Responsible Investing: The Next Big Thing?
Private FundsWealth Management

Socially Responsible Investing: The Next Big Thing?

There has been an increasing trend in some parts of the world to focus on Corporate Social Responsibility (CSR). CSR is a term frequently used to encompass a whole range of corporate activities but which fundamentally encompasses corporate self-regulation: how large corporates ensure that their businesses respect the law and certain ethical and moral standards and in many cases give something back to the community.

A good example is companies ensuring that their products are not made by children or people working in unsafe factories. This has impacted and raised standards in many countries which previously took a more relaxed approach to such concerns, with the rag trade in particular suffering first-hand the tragic consequences of inadequate and unstable warehouse foundations.

In many parts of the world CSR remains an alien concept or at least one which is not embraced as it is seen as interfering in the ultimate goal of maximising profit.

Also, there are and presumably always will be industries which require investment but are perceived by some as antisocial, immoral or contrary to public decency. Arms, gambling, cigarettes, alcohol, pornography and no doubt others may be considered to fall into this category, but it is unlikely that these industries are going to disappear soon and therefore innovation and investment will continue in those sectors and there will be entrepreneurs investing in existing and new businesses occupying those spaces, and there will be start-ups seeking to exploit those markets with new solutions and products. Such start-ups are likely still to attract investment.

Socially responsible investing (SRI) takes CSR a step further and seeks to encourage corporate practices that promote sustainability, consumer protection, human rights and diversity. Certain investors and funds will deliberately avoid the above mentioned sectors and make a virtue of not investing in, what some may perceive as, these ethically lacking concepts.
Impact Investing, Community Investment and Positive Investing are all terms used in the context of SRI and which are self-explanatory.
But does SRI mean lower profitability? Morgan Stanley produced a report in April 2015 which concludes that sustainable investment has “usually met and often exceeded, the performance of comparable traditional investments”.

Many jurisdictions have responded to and also encouraged SRI by introducing corporate vehicles with, in some cases, fiscal incentives, to create a legal framework for businesses with a social purpose – for example, B-Corporations in the US and Community Interest Companies in the UK.

It is of course emotive to seek to label entrepreneurs as social or antisocial depending upon how the sectors they invest in are regarded. Views on this change frequently and often with the fashion du jour. The biggest proponents of gambling are the world’s governments hungry for hefty tax revenue generated by casino houses and online betting companies. Given that many of these are elected governments, can gambling really be branded antisocial?

It is worth noting, too, that a business engaged in what might be regarded as an “antisocial” sector is also capable of engaging in considerable positive action through CSR, SRI etc.

Investing Elsewhere
Inheritance TaxWealth Management

Investing Elsewhere

The value of business property relief claimed by investors in small businesses has also increased considerably in the last two years, up 5% from £540m in the previous year and up by 47% from £385m in 2012-13. Radius Equity explains that the increase in the value of tax reliefs on Inheritance Tax (IHT) bills is evidence of the increasing popularity of Government backed schemes, designed to encourage investment in small businesses, such as the Enterprise Investment Scheme (EIS).

The Government permits those who have inherited shares in unlisted businesses to exclude the value of these assets from the Inheritance Tax (IHT) bill for the estate.
Radius Equity adds that despite the changes to IHT announced in the Chancellor’s Summer Budget – where property worth up to £1m can now be inherited free of tax – it is anticipated that HMRC will still collect more than £3.5bn in IHT in 2017-18, emphasising the scope for further potential savings in IHT payments.

In 2014/15, HMRC collected £3.8bn in IHT receipts, up by 23% from £3.1bn in the previous year. Radius Equity adds that the value of business property relief has not kept pace with the surge in IHT receipts, suggesting that there are many more families who could benefit from lower tax bills by investing in SMEs.

Gary Robins, Director at Radius Equity, explains: “The increased take-up of tax reliefs emphasises the growing investor appetite for investing in ambitious SMEs. The large increase in the amount of Inheritance Tax collected by HMRC shows that there is still more capacity for more investors to take advantage of the generous reliefs on offer. These reliefs not only minimise investors’ Inheritance Tax bills, they also unlock a wider range of funding opportunities for SMEs – vital for their growth as many still find it difficult to secure lending from banks.”

Business property relief allows investors to benefit from a 100% inheritance tax relief on the value of unlisted shares after two years, provided the investments are still held at the time of death. Business property relief is available on almost all investments which qualify for Enterprise Investment Scheme tax reliefs.

EIS investments offer attractive tax reliefs. Investors can enjoy an upfront 30% income tax rebate on money they invest through the EIS and an exemption from paying capital gains tax on the investment if they hold it for at least three years.

Britons’ Top 5 Misconceptions About Debt Revealed
Private FundsWealth Management

Britons’ Top 5 Misconceptions About Debt Revealed

Research from the UK’s top discount brand has discovered that only a fifth of respondents understand the possible repercussions for missing a debt repayment.

The team at conducted the study as part of ongoing research into the financial habits of Britons. A total of 2,439 adults over the age of 18, all of whom stated they had at one point been in debt, either with a credit card, finance deal or loan, were quizzed about their knowledge of finances and debt.

Initially, all respondents were asked ‘When you took on the debt, did you fully read the terms & conditions?’ to which the majority of respondents, 63%, stated ‘no – not at all’. The remaining respondents stated either that they ‘started to read them and gave up’ (25%) or ‘yes – read them fully’ (12%).

Wanting to delve a little deeper and see how much the respondents understood about finances in general, all those polled were then provided with a list of financial statements and asked to state whether they believed each statement to be true or false. Once all of the results were collated, the top 5 misconceptions that Britons have about debt were revealed as:

1. If you ignore the company you owe money to for long enough, they’ll eventually go away and the debt will be forgotten / cleared – 42%
2. Once you declare yourself bankrupt, you are bankrupt for life – 39%
3. I’ll lose my home if I miss a mortgage repayment – 35%
4. All debt is bad for your credit rating – 33%
5. Banks will give you a mortgage based solely on how high your salary is – 27%

All respondents were then asked ‘When you initially took on your debt, did you understand the repercussions if you were to miss one or more payments?’ Only 27% stated that ‘yes’ they did, with almost half of respondents, 49%, stating that they ‘had a rough idea’ and the remaining 24% stating ‘no’ they didn’t understand at all.

Chris Johnson, Head of Operations at, commented:

“The results of this survey are, quite frankly, shocking. Not just the fact that Britons access credit without fully knowing all of the facts, or that we seem to be so blasé about being in debt, but also that Britons don’t understand the repercussions of what debt mismanagement can do to them and their future.

“Britons needs to educate themselves on all matters of debt, whether it currently effects them or not – because it might do one day. Credit cards, loans, mortgages, every type of debt, whether considered a good or bad, can land you in trouble if you don’t fully understand the legal agreement that you’re entering into.”

Reuters Wealth Management Summit
Private FundsWealth Management

Reuters Wealth Management Summit

Wealth managers and regulators from Hong Kong, Singapore, Geneva, London and New York will visit Reuters bureaus on June 8 through 11 to discuss where people are putting their money and topics including digital currencies, alternative investments, millennials and Generation X, regulatory issues, consolidation and more. The stories and videos from the closed on-the-record sessions at the Reuters Wealth Management Summit will be posted online at

Wealth management is changing faster than ever, with managers battling to keep up with developments in regulation, technology and demographics. They are doing so against a backdrop of uncertainty following the worst financial crisis in decades, making investment decisions tougher and returns harder to achieve. Wealthy clients from established and emerging markets want trusted advice, returns, flexibility and security, while regulators demand transparency, increased surveillance and more capital.

This week at the Wealth Management Summit, Reuters will interview wealth managers and regulators asking how they are adapting their business models to serve “Generation X”, what greater regulatory scrutiny means for margins and where they are looking for growth and consolidation to secure their future.

Reuters Wealth Management Summit, which will generate exclusive stories and investable insights, as well as online videos and blog postings.

Guests speaking at the Summit will include:
• Merrill Lynch Head of Wealth Management John Thiel
• Citi Private Bank Global Head Peter Charrington
• President of Morgan Stanley Wealth Management & Morgan Stanley Investment Management Greg Fleming
• Financial Industry Regulatory Authority Chairman and Chief Executive Richard Ketchum
• Nutmeg Founder and Chief Executive Nick Hungerford
• Lombard Odier Asia Head of Private Banking and Singapore Chief Executive Vincent Magnenat
• Securities Litigation and Consulting Group PhD and Principal Edward O’Neal
• Banque Reyl CEO Francois Reyl
• DBS Managing Director and Group Head of Consumer Banking and Wealth Management Tan Su Shan

Reuters Summits bring together top executives from key industries in exclusive sessions with Reuters News global teams of specialist journalists. During the course of Reuters Summits, exclusive news stories and video interviews are posted on, providing valuable insight into specific companies, business sectors, and economies.

InvestYourWay Offer Bitcoin as Part of a Fully Diversified Fund
Private FundsWealth Management

InvestYourWay Offer Bitcoin as Part of a Fully Diversified Fund

InvestYourWay, the bespoke online fund building platform, today announced the addition of Bitcoin as a new investable product, offering more choice to clients. InvestYourWay believes in making such products available as part of a diversified portfolio and not just to those who can afford personalised fund management services, as clients only need as little as £2,500 to begin using their service.

From the start, InvestYourWay has done things differently. In partnership with IG, a FTSE 250 company, InvestYourWay created a unique no leverage Contract For Difference (CFD) designed for long term investment. CFDs are widely used by professional traders and do not require people to lock their capital up in the underlying markets; instead, money sits in an instant access brokerage account with the broker crediting or debiting the account as the underlying markets move. This makes them an ideal product to use when investing in Bitcoins as clients benefit from the changes in the value of Bitcoin without incurring the risk of needing to hold the product directly.

InvestYourWay is a completely new way to invest money in the market, giving clients complete real-time control over their investments. In under a minute clients can build a bespoke fund tailored to meet their needs. Be it a low risk fund investing in Europe and gold, to a high risk fund investing in Asia and the UK tech sector, InvestYourWay funds are constructed and managed with each client receiving a completely unique and bespoke solution. With this latest development clients can request that these unique, personalised funds include Bitcoin.

Bitcoin is still a relatively new product and the value of them can be quite volatile. To ensure that this risk is managed appropriately, InvestYourWay will only include Bitcoin as one holding within a diversified fund, thereby reducing exposure and managing risk. InvestYourWay are also only making Bitcoin available to those clients who are able to demonstrate a sufficient amount of investment experience when signing up to the service.

Michael Newell, CEO of InvestYourWay, said: “Unlike traditional fund managers who are restricted by the funds they have on offer, we have built this business on the principle of the right for a client to be able to choose the type of investments we include in their bespoke fund, from particular global regions to individual products. With this latest enhancement clients can now choose to include Bitcoin as part of that solution. We believe it is all about providing the kind of bespoke service that would be available to the high net worth individual but making it accessible to all within a well managed and balanced portfolio.”

Technology Enables Inclusion of Alternative Assets in UMA
Private ClientWealth Management

Technology Enables Inclusion of Alternative Assets in UMA

The growing interest in UMAs is amplified by investor demand for portfolio diversification to limit risk, enable better returns and achieve long-term household financial goals. While UMA portfolios have traditionally included mutual funds, stocks and bonds, managers are quickly appeasing the growing appetite for alternative strategies like hedge funds, variable annuities, futures, and options. As these assets are highly sought-after, their inclusion in UMA programs is helping raise awareness of the entire managed account industry.

The Power of the Sleeve
Sleeves are synthetic UMA partitions, which can facilitate access to the broader pool of assets in demand by investors, while providing a cost-effective and highly-efficient apparatus for managers and sponsors. Most notably, though, sleeves provide the functionality for managers to include both alternative and traditional investments in UMA portfolios. 
By permitting multiple strategies and sleeves in a single account, UMA offers a natural flexibility and incentive for managers to present spon¬sors with a wider array of investment opportunities. 

Accordingly, UMA platform providers are taking notice and enhancing their technology to allow for the trading and accounting of more assets and currencies. As this happens, the UMA structure can easily accom¬modate newer sources of funds with additional sleeves.

Industry Consequences
It is clear that investors are driving the need for multi-sleeve, multi-strat¬egy UMA platforms. That said, managers and sponsors have an impera¬tive to support this evolving service model.
The multi-sleeve UMA structure enables tremendous benefits for all managed account participants:
• Managers have greater opportunities for product adoption among individual investors
• Sponsors reserve more investment options to help clients meet their respective financial goals
• Investors can reduce risk by diversifying assets within a single account – in lieu of opening and managing multiple accounts

In the bigger picture, we are also witnessing a subsequent evolution among large UMA providers, as many are consolidating and integrating legacy managed account systems onto a single platform. While this denotes an extensive undertaking, it will allow for the streamlined delivery of many different asset classes – particularly those in hot demand by investors.

Another reason for the growing relevance of a single UMA platform stems from the industry’s commitment to deliver the Unified Managed Household (UMH). Broadly defined, UMH provides a comprehensive approach to manage all assets and liabilities of a household, helping investors achieve an overriding set of household goals.

A UMA platform capable of holding a variety of asset types and investment strategies in a single account, with sleeves essentially acting as sub-ac¬counts within a master, providing the technological infrastructure for the in¬dustry to deliver UMH. Once investors make the connection between UMA and UMH, logic tells us there will be even greater adoption in the future. When all is said and done, the continuous ascension of UMA is expected in the years ahead, and leveraging alternative assets in UMA portfolios will help drive this outcome.

By Tirdad Shojaie, SVP Product, Marketing & Business Strategy, Investment Services, Fiserv.

Peer to Peer Lending
Private FundsWealth Management

Peer to Peer Lending

In simple terms, peer to peer lending connects individuals or companies looking to borrow money with investors who would like to invest it, usually over the medium to long term. On average interest rates are between 4% and 15% which makes peer to peer lending an appealing option for savers stifled by record low interest rates. One of the unique advantages of peer to peer lending is that as well as being used to preserve and grow capital it can also be used to provide a regular monthly income. This is made up of the capital and interest payments received each month from the business or individual you have lent to. A SIPP is very similar to a pension but there is one key difference. A SIPP gives you much greater choice about where you invest your pension whereas a traditional pension will limit your options to the providers fund selection. This means you can maintain a tax efficient way of saving into your pension but have greater freedom about where it is invested.

1. How/where would you start if you wanted to invest your P2P loan in a SIPP?
Do your research. As with any investment make enquiries into what you are investing and what each provider offers. Some providers focus on personal loans whilst others on property or business loans. Any provider worth their salt will be a member of the P2PFA and regularly publish performance statistics on their website. The P2PFA has a useful video explaining what peer to peer lending is

2. What is the minimum/maximum amount you can invest in a SIPP?
There doesn’t tend to be a minimum amount you can invest through a SIPP, but it all depends on which firm you ask to manage it. However, it is important to compare the fees that you’ll be charged for managing or administrating your SIPP.

3. What are the benefits of investing your P2P loan in a SIPP?
Investing in Peer to peer through a SIPP means get the same tax relief that comes with a traditional pension whilst also getting access to higher interest rates than offered by most pension funds or high street savings options. Additionally, if you are looking to preserve your capital and take a monthly income peer to peer enables you to do this.

4. How can you take an income from a peer to peer lending through a SIPP?
Peer to peer lending means you get your capital repayment from the borrower each month plus the agreed interest payment. You can either take both as monthly income or preserve your capital by just taking the interest payment as an income.

5. What are the main risks of this type of investment?
Peer to peer lending is very different from investing in the stock market which can go up or down. With peer to peer lending the interest rate you agree to at the start of the investment will remain the same until the loan term is over. It is important to recognise that if a borrower defaults you could lose all of your investment. You can spread your investment over a number of loans and look at whether the peer to peer provider offers secured loans. Secured loans mean that the borrower provides security so in the event they cannot make repayments their security can be called upon to repay the lender.

6. Is P2P investment in a SIPP just for the sophisticated investor?
SIPPs are generally considered to only be suitable for those who feel confident choosing and managing their own investments. And as with all investments if you do not feel confident seek advice or don’t invest in it.

7. What words of wisdom would you give to an investor?
P2P is a comparatively new asset class but has shown a reliable growth pattern over the past five years as well as low default rates. The P2P Finance Association is the trade body which controls standards and the FCA also regulate the industry too. I’m a big believer in getting different points of view, so I’d recommend before any investment speaking to as many people as possible before investing in anything. ThinCats have an online lender forum packed full of people who have been investing through peer to peer.

8. What does the risk and return profile of a typical P2P SIPP look like?
Loans on the ThinCats platform are currently returning an average of 10% gross interest. With % interest determined on each loan where the risk is reflected in the interest rate it attracts through the auction process. All loans are available to the SIPP and therefore it is up to the lender to determine the level of risk they wish to take. You must also factor in the additional tax relief that come with a pension.

9. What are the charges/fees involved in peer to peer lending?
This varies depending on the provider but as a ThinCats lender it costs

Nothing to join or transact on the ThinCats website. As previously mentioned though, it is important you check the SIPP provider’s management and administration charges.

Kevin Caley, Managing Director and Co-Founder of ThinCats comments:
“Low interest rates have in the most hit those who are saving for the long term hardest but new pension rules have provided more options for people to invest their pension savings where they see fit and take a more flexible approach to taking an income. An increasingly popular way of investing for retirement is through a SIPP. SIPPs allow people to maintain all the tax benefits of a traditional pension plan but give allow a wider range of investment options, including peer to peer lending.

One of the unique advantages of peer to peer lending in a SIPP is that as well as being used to preserve and grow capital it can also be used to provide a regular monthly income. This is made up of the capital and interest payments received each month from the business or individual you have lent to.”

ThinCats is a peer to peer lender founded in 2011, under Kevin Caley, Peter Brown and Paul Meier. ThinCats connects experienced investors with established UK business borrowers and provides a real alternative for investors and for businesses that need funding. Investors registering on the platform are able to bid directly on UK businesses, all of which have been vetted by ThinCats’ sponsors, who each have local, industry specific and banking expertise. The network is expertly placed to meet the needs of anyone managing an investment portfolio (including individuals, pension fund managers and companies with cash deposits), and provide direct access to the low risk market sector traditionally occupied by high street banks.

The personal lending/borrowing experience at ThinCats is underpinned by a minimum loan size of £1,000. This was deliberately designed to interest serious investors able to carefully consider the businesses they choose to lend to. Now, more than 4 years later less experienced investors are benefiting from that expertise and intensive ‘crowd due diligence’.

Advise on Pensions and Investments
Private FundsWealth Management

Advise on Pensions and Investments

In time for the upcoming elections, where the future of pensions is uncertain, Harewood Associates Managing Director, Peter Kiely, believes that it’s imperative to be equipped and aware of any possible pitfalls when investing pension funds into private companies and properties.

Peter stresses that it is vital to research any companies, using Companies House to ensure there is a strong set of accounts and testimonials present. There are also several reasons to be wary of any cold calling companies or upfront fees, reputable companies would never advocate this.

Above all, questions should be asked and you should have access to any legal agreements prepared by a reputable Solicitor, the Land Registry can help with this.

“We don’t want to alarm people but believe that greater freedom within pension investment options is essential. Not all companies operate with the same integrity and honesty as Harewood Associates, we truly believe it is a privilege to be entrusted with client’s money and we look after their best interests to maximise their returns.”

Money expert, Martin Lewis, backs up Peter’s opinions by saying, “I’m concerned many will be nervous about releasing the cash in case they’re left with none in old age and will therefore sit on it, never spending it, depriving themselves of the benefit and living a worse life than necessary. If you’ve a sizable pension pot its worth spending the £300 to £1,000 it’ll cost to get an independent financial adviser.”

About Harewood Associates

Peter Kiely launched Harewood in 2010 which was during the middle of the recession. The company is now projecting a £40 million turnover next year and £50 million the following year with offices covering the North West and Mayfair, London.

Harewood offer up to 30% per annum return from investing in new residential developments.

The Share Deal gives investors the opportunity to invest in a variety of high profit residential developments. Each development is owned by a single purpose vehicle (or SPV). This is a simple, private limited company set up for the sole purpose of buying, developing and selling a single residential development. As an investor, you will own shares in this company and therefore when the property is sold, you will receive a share of the profits in proportion to the amount of the shares you own.

Technology Enables Inclusion of Alternative Assets in UMA
Private FundsWealth Management

Technology Enables Inclusion of Alternative Assets in UMA

While UMA portfolios have traditionally included mutual funds, stocks and bonds, managers are quickly appeasing the growing appetite for alternative strategies like hedge funds, variable annuities, futures, and options. As these assets are highly sought-after, their inclusion in UMA programs is helping raise awareness of the entire managed account industry.

The Power of the Sleeve
Sleeves are synthetic UMA partitions, which can facilitate access to the broader pool of assets in demand by investors, while providing a cost-effective and highly-efficient apparatus for managers and sponsors. Most notably, though, sleeves provide the functionality for managers to include both alternative and traditional investments in UMA portfolios.

By permitting multiple strategies and sleeves in a single account, UMA offers a natural flexibility and incentive for managers to present sponsors with a wider array of investment opportunities.

Accordingly, UMA platform providers are taking notice and enhancing their technology to allow for the trading and accounting of more assets and currencies. As this happens, the UMA structure can easily accommodate newer sources of funds with additional sleeves.

Industry Consequences
It is clear that investors are driving the need for multi-sleeve, multi-strategy UMA platforms. That said, managers and sponsors have an imperative to support this evolving service model.

The multi-sleeve UMA structure enables tremendous benefits for all managed account participants:
• Managers have greater opportunities for product adoption among individual investors
• Sponsors reserve more investment options to help clients meet their respective financial goals
• Investors can reduce risk by diversifying assets within a single account – in lieu of opening and managing multiple accounts

In the bigger picture, we are also witnessing a subsequent evolution among large UMA providers, as many are consolidating and integrating legacy managed account systems onto a single platform. While this denotes an extensive undertaking, it will allow for the streamlined delivery of many different asset classes – particularly those in hot demand by investors.

Another reason for the growing relevance of a single UMA platform stems from the industry’s commitment to deliver the Unified Managed Household (UMH). Broadly defined, UMH provides a comprehensive approach to manage all assets and liabilities of a household, helping investors achieve an overriding set of household goals.

A UMA platform capable of holding a variety of asset types and investment strategies in a single account, with sleeves essentially acting as sub-accounts within a master, providing the technological infrastructure for the industry to deliver UMH. Once investors make the connection between UMA and UMH, logic tells us there will be even greater adoption in the future.

When all is said and done, the continuous ascension of UMA is expected in the years ahead, and leveraging alternative assets in UMA portfolios will help drive this outcome.

Written By Tirdad Shojaie
Head of Product, Marketing and Business, Fiserv

Title Here

Cryptocurrency: How Bitcoins Could Transform Consumer Communication Services
Private FundsWealth Management

Cryptocurrency: How Bitcoins Could Transform Consumer Communication Services

Cryptocurrency is a term that has not seen wide recognition. Among those involved in international banking, though, the concept is becoming more important and, in fact, is seen by many experts as a game changer. For the first time in history, currency, the primary medium of exchange, can be issued by individuals without recourse to governments. The implications of such a change are profound: money, after all, is more than simply a surrogate for value that supports economic transactions based on a common assessment of worth; it is a system by which government manages the flow of trade, collects taxes and imposes economic control.

Now, imagine that a government need not issue currency – need not even know about a financial transaction – and one begins to understand the threat that cryptocurrency poses to existing banking and economic structures. Once money is an artifact of one- to-one transactions, the economy moves largely out of the control of central banks.

Communication services are increasingly compatible with cryptocurrency: as communications migrate to broadband delivery, there is an opportunity to integrate financial experiences into the overall communication experience. Although the evolution of cryptocurrency is very preliminary, communication service providers should begin considering the implications of synthetic currency now.

For more information please visit


Cinedigm Prices Private Offering of $64
Private FundsWealth Management

Cinedigm Prices Private Offering of $64,000,000 Aggregate Principal Amount of 5.5% Convertible Senior Notes

Cinedigm Corp., a leading independent content distributor in the United States, announced today that it priced its previously announced private offering of $64,000,000 aggregate principal amount of 5.5% convertible senior notes due 2035 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The size of the offering was increased from the previously announced aggregate principal amount of $60,000,000. The Company expects to close the note offering on April 29, 2015, subject to the satisfaction of customary closing conditions. After deducting specified uses of proceeds and estimated offering expenses and fees, the sale of the notes will generate approximately $28.5 million of cash proceeds for the Company’s balance sheet.

The notes will be senior unsecured obligations of the Company and will bear interest at a rate of 5.5% per year, payable semiannually. The notes will mature on April 15, 2035, unless earlier repurchased, redeemed or converted. The notes will be convertible at the option of holders of the notes at any time until the close of business on the business day immediately preceding the maturity date. Upon conversion, the Company will deliver to holders in respect of each $1,000 principal amount of notes being converted a number of shares of its common stock equal to the conversion rate, together with a cash payment in lieu of delivering any fractional share of common stock. The conversion rate for the notes will initially be 824.5723 shares of common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $1.21 per share of common stock), representing an initial conversion premium of approximately 25% above the closing price of the Company’s common stock on The Nasdaq Global Market on April 23, 2015. The conversion rate will be subject to adjustment if certain events occur. Holders of the notes may require the Company to repurchase all or a portion of the notes on April 20, 2020, April 20, 2025 and April 20, 2030 and upon the occurrence of certain fundamental changes at a repurchase price in cash equal to 100% of the principal amount of the notes to be repurchased plus accrued and unpaid interest, if any. The notes will be redeemable by the Company at its option on or after April 20, 2018 upon the satisfaction of a sale price condition with respect to the Company’s common stock and on or after April 20, 2020 without regard to the sale price condition, in each case, at a redemption price in cash equal to 100% of the principal amount of the notes to be repurchased plus accrued and unpaid interest, if any.

The Company estimates that the net proceeds from the note offering will be approximately $60.7 million, after deducting the initial purchaser’s discount and estimated offering expenses payable by the Company. The Company expects to use approximately $18.2 million of the net proceeds from the offering to repay borrowings under and terminate the Company’s term loan, approximately $11.4 million of the net proceeds to fund the cost of repurchasing approximately 11.8 million shares of its common stock pursuant to the forward stock purchase agreement described below, approximately $2.6 million of the net proceeds to fund the cost of repurchasing approximately 2.7 million shares of its common stock concurrently with the closing of the offering from certain purchasers of notes in privately negotiated transactions and the remainder of the net proceeds for working capital and general corporate purposes, including development of the Company’s OTT channels and applications and possible acquisitions. However, the Company has no current commitments or obligations with respect to any acquisitions.

Concurrently with the offering of notes, the Company is entering into an amendment to its credit agreement. Upon repayment of the term loan under the credit agreement with approximately $18.2 million of proceeds from the offering, the amendment will, among other things, extend the term of the revolving loans to March 31, 2018, provide for the release of the equity interests in the Company’s subsidiaries that are currently pledged as collateral without affecting the remaining collateral, change the interest rate as described below, replace all financial covenants with a single debt service coverage ratio test commencing at June 30, 2016 as applied to the revolving loans and a $5.0 million minimum liquidity covenant, and provide consent to the issuance of the notes. After the effectiveness of the amendment, the revolving loans will bear interest at Base Rate (as defined in amendment) plus 3% or LIBOR plus 4%, at the Company’s election, but in no event may the elected rate be less than 1%.

In connection with the offering, the Company intends to enter into a privately negotiated forward stock purchase transaction with a financial institution, which is one of the lenders under the Company’s credit agreement (the “forward counterparty”), pursuant to which the Company will purchase approximately 11.8 million shares of common stock, subject to adjustment, for settlement on or about the fifth year anniversary of the issuance date of the notes, subject to the ability of the forward counterparty to elect to settle all or a portion of its forward stock purchase transaction early. The forward stock purchase transaction is generally expected to facilitate privately negotiated derivative transactions between the forward counterparty and holders of the notes, including swaps, relating to the Company’s common stock by which we believe holders of the notes have established or will soon establish short positions relating to the Company’s common stock and otherwise hedge their investments in the notes.

The Company’s entry into the forward stock purchase transaction with the forward counterparty and the entry by the forward counterparty into derivative transactions in respect of shares of the Company’s common stock with the purchasers of the notes and the Company’s repurchases of shares of its common stock from certain purchasers of notes in privately negotiated transactions could have the effect of increasing, or reducing the size of any decrease in, the price of the Company’s common stock concurrently with, or shortly after, the pricing of the notes.

The notes and the shares of the Company’s common stock issuable upon conversion thereof have not been, and will not be, registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful.

One Year On
Private FundsWealth Management

One Year On, Classic Plus Is Still Putting Money Back in People’s Pockets

Over three-quarters (78%) of people believe things generally get better with time – this is certainly true for people who have earned interest with TSB’s Classic Plus account.

One year on and TSB’s market leading account is still rewarding people with 5% credit interest on balances up to £2,000, without all the usual funny stuff. Unlike others, TSB’s Classic Plus doesn’t offer a ‘teaser rate’ so there is no need to worry about the interest being whipped away after 12 months.

TSB’s Classic Plus account was designed to be the most rewarding and accessible bank account on the market, and it’s proven to be just that – with 875 accounts opened daily.

Some things in life just keep improving with time and over a third (36%) of people believe interest earned on bank accounts should be one of these. Other things that people expect to get better with time include: wine (56%), relationships (46%), photo collections (28%), books and diaries (20%), money-saving perks (19%), leather sofas (18%) and jeans (17%).

One-in-five (21%) people say they put the interest earned on their current account towards everyday spending and over three-quarters (71%) would close their account and move to another bank if they stopped receiving interest.

TSB Classic Plus customers can earn up to £100 a year in interest, they must simply pay in £500 a month and register for internet banking, paperless statements and correspondence. People have the flexibility to manage their money however suits them best, either in branch, over the phone or online.

Andy Piggott, Head of Current Accounts at TSB says: “Earning interest on your bank account is a useful way of topping up your everyday spending. If people are looking to open an interest paying banking account, they should make sure the account doesn’t just offer interest for the first year as they may miss out further down the line.

“TSB isn’t like other banks. The 5% interest rate isn’t an introductory rate so we won’t whip it away after a year. We understand that banking is about the whole experience which is why we continue to put money back into our customers’ pockets, not just for the first year.”