Category: High Net-worth Individuals

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.”

Recommendations
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.

stock market
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.

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: www.scmdirect.com
Address: 2 Eaton Gate, Westminster SW1W 9BJ
Telephone: 44 (0) 7838 8650

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.”

Wealth-X Reveals: The Wealthiest Women In Tech
High Net-worth IndividualsWealth Management

Wealth-X Reveals: The Wealthiest Women In Tech

The 58-year-old boasts a US$1.3 billion fortune, the bulk of which is derived from profits from the sales of her shares in eBay, a company that she led from 1998 to 2008 during its dramatic expansion.

Ranking second on the list is Facebook chief operating officer Sheryl Sandberg, whose net worth totals US$1.22 billion. Upon joining Facebook in 2008, Sandberg received company stock as part of her compensation plan. Since 2012, she has been selling off her Facebook shares, generating more than US$700 million in cash before taxes. However, she still holds US$430 million in Facebook stock.

Alibaba co-founder Lucy Peng (also known as Peng Lei) took third place on the Wealth-X list with a personal fortune of US$1.2 billion. The 42-year-old executive, who heads Alibaba’s new Ant Financial Services Group, became a billionaire in 2014 upon the valuation of the Chinese e-commerce giant prior to its record-setting IPO.

The youngest female tech executive on the list is 39-year-old Marissa Mayer, CEO of Yahoo, who has a net worth of US$410 million.

The net worth of the women on the Wealth-X list still lags far behind their male peers in the technology sector. Microsoft founder Bill Gates, for example, has a net worth of around US$85.1 billion, according to Wealth-X estimates, while Mark Zuckerberg, the 30-year-old Facebook chairman, is worth at least US$35 billion.

ACE to Acquire Fireman's Fund HNW Personal Lines Business from Allianz
High Net-worth IndividualsWealth Management

ACE to Acquire Fireman’s Fund HNW Personal Lines Business from Allianz

ACE Limited today announced it has signed a definitive agreement to acquire the Fireman’s Fund high net worth personal lines insurance business in the United States from Allianz for US$365m. The acquisition expands ACE’s position as one of the largest high net worth personal lines insurers in the US.

The Fireman’s Fund business will be integrated into ACE’s existing high net worth personal lines business, ACE Private Risk Services, which offers a broad range of coverage including homeowners, automobile, umbrella and excess liability, collectibles and yachts. In 2013, Fireman’s Fund had US$891m in personal lines gross written premiums and ranked third among insurers serving the US high net worth consumer market.

“High net worth personal lines remains a strategic growth area for ACE and ACE Private Risk Services has quickly established itself in this space,” said Evan G. Greenberg, Chairman and Chief Executive Officer, ACE Limited. “The addition of the personal lines business of Fireman’s Fund will reinforce and advance ACE’s position as a premier provider of insurance to the high net worth market. We are proud to welcome their valued clients and producers to our company.

“ACE will also benefit from the addition of one of the industry’s most respected personal lines organizations including talented claims, underwriting, actuarial and marketing professionals. The Fireman’s Fund team joining us has a deep understanding of the high net worth market and strong relationships with the agents and brokers serving this discerning clientele. In addition, because we’ve built ACE Private Risk Services for growth, we have a robust infrastructure that gives us the opportunity to absorb the business, leverage our existing operations and systems and scale this business efficiently and immediately.”

The acquisition includes the renewal rights for new and existing business, reinsurance of all existing reserves, and access to an extensive network of approximately 1,100 agents and brokers. The transaction, which is subject to customary closing conditions, including insurance regulatory approval, is expected to be completed in the second quarter of 2015 and be accretive to earnings immediately.

Virgin Boss Richard Branson Offers Staff Unlimited Annual Leave
High Net-worth IndividualsWealth Management

Virgin Boss Richard Branson Offers Staff Unlimited Annual Leave

Writing on his website the entrepreneur said that every member of his 170 personal staff could:

“take off whenever they want for as long as they want”

He continued to state that staff would not need to ask for permission or give details as to the length of their break. He stated that the driver for the success of the initiative was that any leave taken would not cause any detriment to anyone or anything.

Explaining how he thought it was more important to focus on the work people get done as opposed to the time they are in the office, he continued:

“The assumption being that they are only going to do it when they feel 100% comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business – or, for that matter, their careers!”

Explaining why he was taking such a surprising decision, the Virgin chief said he had been inspired by his daughter. According to the 2014 winner of the Business for Peace Award she had told him about a similar process that is in place at online TV company Netflix.

The Virgin policy has been introduced for Mr Branson’s staff in the United Kingdom as well as employees in the United States where he said:

“vacation policies can be particularly draconian”

The blog entry on the billionaire’s website has been taken from a book that Mr Branson will be launching later this year.

 

London Overtakes Hong Kong to Become World's Most Expensive City
High Net-worth IndividualsWealth Management

London Overtakes Hong Kong to Become World’s Most Expensive City

Official figures show the average London house price is above £500,000.

IR Stone / Shutterstock.com

 The Savills Live/Work Index top 12 world cities analysed the annual cost of living in rented accommodation and office space for one person. House prices and exchange rates were among other determining factors to index the most expensive cities.

As well as beating Hong Kong into second place, London came higher than New York in third, Paris at four and Tokyo at number five.

The full list by annual cost of an employee is:

• London – USD120,568 (GBP73,513)
• Hong Kong – USD115,717 (HKD896,983)
• New York –USD107,782
• Paris – USD105,550 (EUR82,116)
• Tokyo – USD76,211 (JPY8,280,558)
• Singapore – USD74,890 (SGD94,919)
• Moscow – USD70,499 (RUB2,715,517)
• Sydney – USD63,630 (AUD71,866)
• Dubai – USD52,149 (AED191,548)
• Shanghai – USD43,171 (CNY264,991)
• Rio de Janeiro – USD32,179 (BRL77,638)
• Mumbai – USD29,742 (INR1,814,277)

Launched in 2008, the Savills index is a strong indicator to the stability of the markets in the countries and is dominated this year by the top four in the six years since it was first compiled.

The index is also indicative of how the more mature investment markets have performed against emerging economies, according to Savills.

This year saw London rise above Hong Kong largely because of a combination effect, said the estate agent.

A falling residential rental market and weakening Hong Kong dollar has seen total real estate costs fall by a half year annualised rate of 11.2% in US dollar terms.

Conversely, real estate costs in London rose by a US dollar annualised rate of 10.6% in the same period.

The latest figures from the Office of National Statistics in the UK show that London house prices have risen by 11.7% to July this year, with the average price exceeding £500,000 ($820,436.28).

Warning Issued to Gold Investors
High Net-worth IndividualsWealth Management

Warning Issued to Gold Investors

Gold Sovereign coins are available from just £197 – Picture courtesy of Shutterstock

 The Royal Mint is looking to expand the bullion business through the site, by offering what it called ‘relatively affordable’ coins for sale.

Shan Bissett from The Mint said:

“We want to help expand the bullion market, particularly as coins offer a relatively affordable introduction,”

Among the items the site offers for sale are:

• Gold Sovereigns costing £197 ($322)
• Larger gold Britannias costing £800 ($1310)
• Silver coins costing from £19 ($31)

With inexperienced investors being targeted, financial adviser Martin Bamford warned caution, saying:

“Gold can go up but it can plummet as well,” he said. “It is risky and there is no income attached.”

Larger investors are also being targeted by The Mint through the creation of a bullion storage facility. Coins will be held in a vault with Ministry of Defence guards at Llantrisant, The Mint’s secure site in South Wales.

Access will be restricted to people purchasing a minimum of 25 Sovereigns, a tube of 10 Britannias or equivalent value purchases.

The present price of gold is £743 ($1,214) per ounce, over £400 lower than the price three years ago.

Oracle Boss to Step Down
High Net-worth IndividualsWealth Management

Oracle Boss to Step Down

Courtesy of Shutterstock

Mr Ellison, one of the world’s richest people, will still remain an integral board member however.

The chief executive will be replaced by Mark Hurd and Safra Catz as co-CEOs, with Mr Ellison, 70, stepping into the chairman and chief technology officer roles.

Still an influential position, it means that Mr Ellison will head up the hardware and software engineering units.

In a statement, the board president of Oracle, Michael Boskin, said:

“Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy.”

Bright Future Despite the Cloud

Mr Boskin went on to say that the directors were ‘thrilled’ with the appointment of Mr Hurd and Ms Catz. Exclaiming that both were ‘exceptional executives’ he said they would oversee a bright future for the firm.

The company confirmed that Mr Hurd will direct the business, sales and service units at Oracle with Ms Catz running finance, legal and the manufacturing units.

The reshuffle at the top of Oracle takes place amid a challenging environment for the firm. With large organisations and corporates shifting to working on the cloud computing platform, a reduction in the number of software licences being sold is being seen.

The timing has left many analysts and commentators confused.

Analyst at FBR Capital Markets, Daniel Ives, said that despite there being widespread speculation that Mr Ellison would leave his CEO role, the timing had left him scratching his head.

Fifth Richest

Mr Ellison has an estimated personal wealth of around $51.3bn, making him the fifth richest man in the world. Funding the company with just $1,200, his is a dazzling success story.

Much of his fortune is tied up in Oracle however, where he has a 25% stake holding.

Somewhat of a character, with many activities in his personal life gaining the attention of the press, he was also a very good friend of the late Steve Jobs.

One notable mention of his personal interests away from work came last year.

Personally financing Oracle Team USA in the 34th America’s Cup yacht race, he celebrated the title win as the highly engineered double-hulled yacht clinched victory from Emirates Team New Zealand in what was an exciting final round in San Francisco Bay.

Trailing the New Zealand team by a significant margin, Oracle Team USA stunned everyone by winning the last eight races to come from behind,retaining international sport’s oldest trophy.

Report Suggests Half of China's HNWIs Want to Leave
High Net-worth IndividualsWealth Management

Report Suggests Half of China’s HNWIs Want to Leave

Courtesy of Shutterstock

 According to the survey by the British bank, many high net-worth individuals in China are looking to developed markets overseas to secure a better life for their families.

With many saying they are considering moving within the next five years, the driving force is all about getting access to better education and jobs for their children.

Canada and Hong Kong Favoured

Europe and the US are popular destinations, according to the Barclays Wealth Insights report, though Hong Kong and Canada were singled out as the two most attractive. London, New York and Singapore were also favoured by many.

Surveying over 2,000 investors and HNWIs with a total net worth of $US1.5 million or more, the report also found that globally, 29% are looking to relocate abroad. However, this is considerably shy of the Chinese figure of 47%.

The least likely to move were those living in India and the US, with just 5% and 6% respectively.

Analysing the report, Barclays said that the entrepreneurial spirit and greater appetite for risk that the wealthiest often display increases the likelihood that they will move abroad to look for opportunities to exploit.

For Sale: Tropical Island in the Maldives with Hotel Planning Permission
High Net-worth IndividualsWealth Management

For Sale: Tropical Island in the Maldives with Hotel Planning Permission

Courtesy of Debutesq

Orivaru is the next tropical holiday destination of note – a 14 hectare island which is ringed by the dazzling white sands for which the Maldives are renowned. One of the most popular destinations in the world for relaxing, romancing and scuba diving amid the stunning coral reefs, the Maldives is already a popular holiday destination for many.

And this island is the ideal location for a luxury hotel and spa – planning permission for which has already been granted.

With its stunning palm-rich Maldivian landscape the island is naturally tailor-made for the five-star hotel and spa which the Ministry of Tourism has already paved the way for. Planning permits already issued by the ministry allow for the development of a luxury island resort with:

• 100 five star private rooms
• Water villas around Orivaru‘s coastline
• Restaurants
• Guest lounges
• Swimming pools
• Wellness spa.

The island also boasts a natural port. Ideal for berthing boats and seaplanes without disrupting the natural beauty of the island, it is also perfect for the 100 mile transfer north from Ibrahim Nasir International Airport in Malé.

In the same group of islands as Minaavaru, home to the Hilton resort and spa, Orivaru is being marketed by the Debutesq Group.

Alan O’Connor, the director of Debutesq said:

“being just 45 minutes by seaplane from Male International Airport, this could no doubt become another very successful tourist destination.”

Going on the explain how a Russian investor recently bought an island in the Maldives for $65m, Mr O’Connor advised that the market for island purchases is strong.

Available at a price in the region of $14 million, the purchase comprises a long leasehold from the Maldivian government.

Hong Kong Entrepreneur Buys 30 Rolls
High Net-worth IndividualsWealth Management

Hong Kong Entrepreneur Buys 30 Rolls

Courtesy of Shutterstock

The cars, all personalised Rolls-Royce Phantoms, will be used solely to take guests to and from the hotel and casino at Hung’s new Macau gaming resort. The complex, which has been said to be the most extravagant in the world, sees the penthouse suite priced at $130,000 per night.

Most Expensive Phantoms

Of the 30 cars, two of them will be the most expensive Phantoms that the luxury car manufacturer has made. Said to be worth around $1m each, Hung, the chairman of the Louis XIII company explained the purchase:

“Louis XIII and Rolls-Royce Motor Cars share the same philosophy: to deliver the perfect experience to the world’s most discerning customers,”

Mr Hung was speaking at a signing ceremony for the record deal at the Goodwood, UK HQ of BMW-owned Rolls-Royce.

The personalisation of the long wheelbase Phantoms on the order include:

• custom red bodywork
• black leather interior with detailing echoing the lobby of the hotel
• bespoke clocks by Graff

Rolls-Royce, who has also designed the driveway for the Cotai Strip complex has said it will train the chauffeurs to handle the unique nature of the cars.

Under the terms of the contract, Louis XIII will pay Rolls-Royce a $2m deposit upfront followed by another $3m in December. The $15m balance will be paid upon delivery of the cars.

 

HNWIs Increasing Family Investments
High Net-worth IndividualsWealth Management

HNWIs Increasing Family Investments

High-net-worth-individuals are increasingly diverting investments into family businesses, according to the results of a survey by KPMG.

The trend is seeing a drop in the amount of funding family firms are raising from traditional banks and financial institutions. According to the findings of the report, 36% of family businesses have had recent problems accessing bank loans to finance their projects, fuelling a hunt for alternative investment.

The global survey by the professional services firm also found:

• 44% of HNWIs have previously invested in family businesses
• 95% have had a positive experience
• 76% hold a majority stake in the business
• 60% are actively looking for investments
• A ‘reasonable’ risk and return structure is sought
• Investments are taking a long-term capital appreciation view
• 58% of family businesses are seeking external financing

A Challenging Environment for Family Businesses

The survey, which asked the opinion of 125 family businesses showed that increasing numbers of them are facing a challenging environment to source adequate financing. The survey also asked 125 high profile HNWIs, asking them about their experiences with investing in family businesses and how they see the relationships working.

According to the findings, family businesses contribute over 70% of the world’s GDP. However, many of them are seeing their financing options being evermore restricted. This is risking the potential for growth, with families put off of securing offered private equity (PE) funding as demands often include selling 100% of the business to maximise exit events.

Despite this though, PE and venture capital remain the preferred route to funding.

Strategic investments from corporates, (the second preferred funding route), also see family business investment as a route to full ownership however, another reason for reticence on the part of the seeker, who want to retain control of their business and keep key information confidential.

This is seeing high-net-worth-individuals (HNWIs) take up the slack.

Global Wealth of $53 Trillion

Estimates by KPMG suggest that the top 14 million HNWIs are worth a collective wealth of $53 trillion on a global level, with their priorities often closely aligned with those of famil businesses. Many of them have direct experience in family business themselves.

Both target long-term capital appreciation as a top investment driver for example, 37% in the case of HNWIs and 23% in the case of family businesses. The route into top quality education is a factor in this decision, with the Global Head of Family Business at KPMG, Christophe Bernard saying:

“From the survey, education and awareness on the potential benefits of these partnerships have emerged as important first steps to link these two groups.”

With their collective worth and the investment route being largely under-optimised at present, advisors could see increasing engagements to facilitate Family Office and HNWI tie-ups.

High Net-worth IndividualsWealth Management

UK Prime Housing Market Hit by Tax Rises

According to the study by property data company Lonres and analysts Dataloft, the double impact of tax rises and fears over the introduction of a so called ‘mansion tax’ are affecting sales of homes worth £2m ($3.225m) (EUR1.25m) or more.

Properties Withdrawn

The findings reveal that in the last six months to the end of June, over half of all properties listed in London’s most exclusive areas have been taken off the market.

People looking to purchase homes worth over £2m have been hit with a 7% stamp duty charge.

Before the changes, the rate with which properties were withdrawn from the market settled between 20% and 30%. The increase to 50% is the high point of consistently increasing withdrawal rates since the increase in stamp duty.

The MD of Lonres, Anthony Payne, told the FT:

“The £2m stamp duty and mansion tax threshold remains a sticking point in the market.”

Mansion Tax

The market for high-end properties in the UK capital has been slowing down for some time now. However, the rate of slowdown seen at the moment could be set to increase exponentially.

With the general election slated for May next year, both the UK Labour Party and the Liberal Democrats have announced plans for a so called ‘mansion tax’. Under the plans, the annual levy will see the owners of high-value homes mandated to pay additional charges on their properties.

Mr Payne continued to explain:

“A raft of taxes aimed at the upper price thresholds, the strengthening of sterling, talk of a mansion tax, increased stability in the global economy and the upcoming general election have all combined to affect sentiment [of buyers].”

With the slowdown seeing discounts on many houses of 10% or more, the most luxurious postcodes in London seeing the highest rate of withdrawals and the tax increase affecting social mobility rates for many families, industry analysts are warning of more withdrawals.

Singapore's Top 10 Billionaires Revealed
High Net-worth IndividualsWealth Management

Singapore’s Top 10 Billionaires Revealed

In land-scarce Singapore, real estate is king. That is why Philip Ng, CEO of Far East Organization, is the richest man in the Southeast Asian city-state with an estimated net worth of US$5.2bn, according to a new list compiled by Wealth-X, the ultra high net worth intelligence and prospecting firm, of the top 10 Singapore-based billionaires. Nearly 80% of the property tycoon’s net worth comes from his real estate holdings.

Ng’s net worth accounts for about one-fifth of the combined wealth of the 10 individuals on the Wealth-X list, which includes citizens of Brazil, New Zealand and Indonesia who have established their primary business addresses in Singapore and reside there.

Ng, 55, became CEO of Far East Organization in 1991. His father founded the company 31 years earlier, and it has grown to become Singapore’s largest private property developer with 750 properties in the residential, hospitality, retail, commercial and industrial sectors. A notable philanthropist, Ng has given generously to universities and educational institutions in Singapore. The new Jurong General Hospital in Singapore is to be named after his father, Teng Fong Ng, following a donation of more than US$95m by the Ng family in March 2011.

In the number two spot – and the youngest billionaire on the list – is 32-year-old Brazil-born entrepreneur Eduardo Saverin, co-founder of Facebook. Saverin moved to Singapore in 2009 and renounced his American citizenship ahead of Facebook’s IPO filing in 2012, a move that reportedly saved him millions of dollars in taxes.

New Zealand-born Richard Chandler is third on the list. Chairman of the Chandler Corporation, a Singapore-based business group that invests in public and private equity, his net worth is US$2.8bn.

There are 27 billionaires in Singapore with a combined net worth of US$64bn, according to the Wealth-X and UBS Billionaire Census 2013.

Who are the World Cup’s Richest Players?
High Net-worth IndividualsWealth Management

Who are the World Cup’s Richest Players?

Cristiano Ronaldo, Portugal’s forward and captain, has been named as the wealthiest footballer competing in this year’s World Cup by ultra high net worth intelligence and prospecting firm Wealth-X.

With an estimated net worth of US$230m, Ronaldo’s personal fortune accounts for nearly one quarter of the combined net worth of the 10 players in the Wealth-X World Cup Rich List, beating other high-profile soccer players such as Lionel Messi from Argentina and England’s Wayne Rooney.

Nearly all of the footballers on the list are current or past players in the English Premier League, the only exceptions being Messi and Italian goalkeeper Gianluigi Buffon.

England has more ultra wealthy soccer players on the Wealth-X World Cup Rich List than any other country: forward Rooney (US$95m), and midfielders Frank Lampard (US$60m) and Steven Gerrard (US$55m).

The 2010 World Cup champions, Spain, have only one ultra wealthy footballer on the list, Fernando Torres, who has an estimated net worth of US$50m.

Host nation Brazil, which last hosted the World Cup in 1950 and since then has established itself as a dominant power, winning football’s greatest trophy a record five times, does not have a player on the Wealth-X list although their star player, Neymar, has an estimated net worth of US$25m.

Buffon, who has an estimated net worth of US$50m, is the only goalkeeper in the list, which primarily consists of midfielders or strikers.

 

Who Wants to Be a Millionaire? Not the Brits
High Net-worth IndividualsWealth Management

Who Wants to Be a Millionaire? Not the Brits

According to a survey by YouGov on behalf of direct bank first direct, for almost a quarter of people in the UK a sudden windfall of up to £50,000 would be enough to change their lives, with only 12% hankering to be millionaires.

They have no interest in “flashing the cash” by going on exotic holidays or buying expensive sports cars, the researchers found. Instead, they just want enough money to pay off their debts and treat their families.

And almost one in five (19%) confessed that even if they did come into life-changing wealth they would not change their jobs.

The poll of 2,300 adults was conducted to discover what “life-changing” means in post-recession Britain.
Andy Forbes, Head of Products at first direct, said: “We might dream about a Lottery jackpot, but the reality is that most of us aren’t interested in bigger houses or flash cars. Instead, we just want the simple security of knowing we can pay the bills each month and not get into more debt.

“These days we equate financial happiness with being able to provide simple treats for our families, rather than having enough money to quit our jobs or go on luxury holidays.”

The survey also found that:

For just over half the population (52%) a minimum of £100,000 would be a life-changing amount, while almost one in eight (12%) say they would need £1 million.

A quarter of people said paying off their debts would be the biggest priority.

Just over one in ten (11%) would invest a big windfall, with a similar number using the cash for a holiday or a new car.

60% of women said they would use any new-found wealth to change their looks

While only a third of women said a sudden financial windfall would lead them to changing their friends, 45% would look at swapping their partners

Londoners are most likely to ditch their partners, while the Welsh are tops when it comes to loyalty to partners and friends.

 

Millionaires' Top Five Past Investing Mistakes
High Net-worth IndividualsWealth Management

Millionaires’ Top Five Past Investing Mistakes

The top five most common mistakes made by millionaires are failing to diversify, investing without a plan, making emotional decisions, failing to review a portfolio, and placing too much focus on previous returns, finds a poll by one of the world’s largest independent financial advisory organisations, according to a new survey.

In the global deVere Group survey of 880 high-net-worth clients, when asked to reveal their number one investing mistake before seeking professional advice from deVere, 23% cited failing to adequately diversify their portfolio.

22% responded investing without a plan, 20% said it was making emotional decisions, 16% answered failing to regularly review the portfolio, and 14% claimed it was focusing too heavily on the history of an investment’s returns.

5% cited other errors, including impatience, investing near the top of the market, adhering to recommendations from acquaintances, and paying tax on the investments unnecessarily, amongst others.

Those polled by the organisation, which has more than 80,000 clients worldwide, are based in the UK, the US, South Africa, Hong Kong, Japan, the UAE, Indonesia and Thailand and have investable assets of more than £1m.

Of the survey, Nigel Green, deVere’s founder and chief executive, observes: “Interestingly, there are minimal differences between the top five most common investment mistakes previously made by high-net-worth individuals.

“This close weighting could suggest that, according to the respondents, all of them are almost equally as significant and costly – and therefore must be avoided.”

On the breakdown of the poll, he continues: “As the survey highlights, failure to diversify a portfolio is widely regarded as one of the most common investment pitfalls. Spreading your money around is a vital tool to manage risk. However, it must be used correctly. Diversification will only add real value if the new asset has a different risk profile.

“The poll underscores how 22% of today’s millionaires have also in the past fallen into the all-too-familiar trap of randomly investing, or investing without a structured, robust plan. Anyone who has an investment plan can expect their portfolio to outperform those without a plan. To my mind, unless you have a sound investment plan you are gambling, not investing.

“Most decisions in life are emotional to some degree but making excessively emotional decisions can prove deadly when it comes to investments because they are blighted by prejudices and biases. Working with an independent financial adviser is one recommended way to help take excessive emotion out of the equation.

“16% of respondents cited that failure to review their portfolio on a regular basis was their number one investment mistake. This is not surprising as even the best portfolios can go off-target over time. Investments need to be reviewed and potentially rebalanced at least annually, preferably more often, to ensure they still deserve their place in the portfolio and that they are still on track to reach your long-term financial objectives.

“Additionally, high-net-worth individuals told us that they have in the past been caught out by relying too much on historical returns and not giving enough importance to future expectations. The future investment situation is likely to be different from time-aged averages. Past averages may have little bearing on the current environment and therefore the actual returns you receive.”

deVere Group’s CEO concludes: “Mistakes investing can and do occur – it is how they are best avoided, or at least mitigated, that is the key to success. Learning lessons from people, like those we polled, who have overcome these common investment mistakes to go on to accumulate significant wealth in the longer-term is a way to reduce costly errors.

“Due to the complexities of investing and the potentially devastating effects of committing expensive avoidable errors, the best thing to do is to seek advice from a professional independent financial adviser who will help circumnavigate the common and not-so-common pitfalls. Avoiding just one of these mistakes – and there are many others – can literally make the difference between poverty and financial freedom.”

Jerry Seinfeld Hollywood's Richest Actor
High Net-worth IndividualsWealth Management

Jerry Seinfeld Hollywood’s Richest Actor

With an estimated net worth of US$820m, comedian Jerry Seinfeld is laughing all the way to the bank.

The 60-year-old entertainment icon emerged as the wealthiest actor on the Hollywood and Bollywood Rich List compiled by ultra high net worth intelligence and prospecting firm Wealth-X.

To compile the list, Wealth-X identified the wealthiest TV and movie actors from the US and India. The combined personal fortunes of the stars on the list total US$4.68bn.

The co-founder of the eponymous TV comedy “about nothing” significantly increased his fortune through off-network syndication deals for “Seinfeld,” giving him at least US$400m in the fifth syndication agreement last year. He has also acted in numerous films, including the animated feature “Bee Movie.”

Taking the second spot – and the only Bollywood actor on Wealth-X’s top 10 list – is movie star Shah Rukh Khan, who is estimated to be worth US$600m. Immensely popular around the globe as well as in his home country, India, where he is referred to in the media as “Badshah of Bollywood” or “King of Bollywood,” Khan is also a producer, TV host, co-owner of an Indian cricket club and a philanthropist. He has appeared in more than 50 Bollywood films and is a regular at the annual Cannes Film Festival.

Several Academy Award winners are featured on the list, including three-time Oscar winner Jack Nicholson, who has a net worth of US$400m, which puts the 77-year-old actor in 7th spot. Tom Hanks, who won best actor Oscars for “Philadelphia” and “Forrest Gump,” is in 8th place with a personal fortune of US$390m.

Clint Eastwood, who at 84 is the oldest actor on the Rich List, has an estimated personal fortune of US$370m, making him the 9th wealthiest actor on the list.

Vincent Mercer joins Oracle Capital Group Advisory Board
High Net-worth IndividualsWealth Management

Vincent Mercer joins Oracle Capital Group Advisory Board

Oracle Capital Group, the global independent multi-family office and wealth consultancy, have announced the appointment of Vincent Mercer to its Advisory Board. Mercer, an experienced lawyer, is recognised as an expert in the regulation of financial services in the UK.

Mercer began his career at the London Clearing House in 1983 where he worked on the then emerging UK regulatory structure, contributing to both the Financial Services Act 1986 and the market default procedures in the Companies Act 1989.

His subsequent roles included Head of Risk Management for the London Stock Exchange’s Traded Options Market (1987 to 1991) where his responsibilities included the clearing, settlement and risk management of the Stock Exchange’s former equity options.

Mercer established his own law firm in 1991 which later merged with top 50 city law firm Speechly Bircham, where he became a partner in its financial services group. Vincent retains an ongoing consultancy role with Speechly Bircham.

The most recent appointment to the Advisory Board prior to Mercer was former Home Secretary David Blunkett. The Board is chaired by Martin Graham, former Director of Markets and Chairman of AIM at London Stock Exchange.

Commenting on the appointment Martin Graham, Chairman of Oracle Capital Group, said: “We are delighted to welcome Vincent to our Advisory Board. The expertise he has gained over a long and rich career will be especially valuable in the current complex regulatory environment as we continue to develop and grow the business across our key markets.”

Mega Advisor Teams Control 42% of the Advisory Marketshare
High Net-worth IndividualsWealth Management

Mega Advisor Teams Control 42% of the Advisory Marketshare

New research from global analytics firm Cerulli Associates, predicts that target-date strategies will capture 63.4% of 401(k) contributions in 2018.

“Mega teams are well situated to attract high-net-worth clients,” comments Kenton Shirk, associate director at Cerulli.

“One of many reasons is their size, which allows advisors to offer a greater breadth and depth of expertise to serve the complex needs of affluent clients.”

The second quarter issue of The Cerulli Edge – Advisor Edition examines how established practices can build a scalable practice model to support continued growth, and takes a closer look at how advisors and service providers can shift their focus from mass-affluent clients to the high-net-worth market.

“Mega teams are also ideally positioned to make acquisitions,” Shirk explains. “Their financial success reduces the burden of financing, and the scale of their operational infrastructure makes it easier to service additional clients.”

“As a growing number of advisors near retirement age, acquisitions will help mega teams grow at even faster rates,” Shirk continues.

Cerulli believes that mega teams will continue to grow their marketshare of advisory assets. Broker/dealers and custodians that proactively help their advisorforces step up to the next asset bracket will be well positioned to share in their success.

Over Half Believe Wealthy Starts at £10m
High Net-worth IndividualsWealth Management

Over Half Believe Wealthy Starts at £10m

A recent survey by Oracle Capital Group, the independent international multi-family office, has shown that more than 55% of people believe that to be deemed wealthy today you need to be worth more than £10m.

More than 20% of these respondents believe that you can only be deemed wealthy if you enjoy a personal fortune of £100m or more.

In contrast to previous decades when the term ‘millionaire’ indicated significant personal wealth, it is clear that our perceptions of what it means to be wealthy have changed. Factors such as inflation and escalating house prices have driven living costs higher, and a million GBP in assets no longer has the cachet and purchasing power
it once did.

The results of the survey highlight the impact of the vast personal wealth accrued by many celebrities and other figures in the public eye. Two thirds of respondents believe that the high visibility of wealthy celebrities has skewed our perceptions of wealth, with almost half of all respondents attributing this to the earnings of sports stars.

Of the other respondents, a fifth felt that remuneration in the media and arts most skewed perceptions of wealth, while 18% chose the salaries and bonuses enjoyed by business executives and financial professionals. 13% of respondents believe that the technology sector has most affected our perceptions of wealth, a reflection of the high profile successes of tech start-ups such as facebook, WhatsApp and Twitter which have generated fortunes for
their founders.

Yury Gantman, CEO of Oracle Capital Group, commented: “Clearly the idea of wealth is relative, but what is clear is that the word ‘millionaire’ does not necessarily now conjure up the sense of significant wealth that it did until relatively recently; today, it’s more about being a ‘tenmillionaire’.

“Many people who own properties in the London area have become millionaires by virtue of the dramatic inflation of house prices, but would not necessarily regard themselves as HNWIs (high net worth individuals). This is undoubtedly a reflection of growing living costs which, alongside the housing market, have affected food prices, school fees, travel and other household outgoings, but also – as indicated by our survey – because their own personal assets are dwarfed by the immense and highly publicised fortunes of footballers, film stars, hedge fund managers and tech billionaires.”

deVere Group Backs IFS Concerns
High Net-worth IndividualsWealth Management

deVere Group Backs IFS Concerns

One of the world’s largest independent financial advisory groups is supporting a leading economic think tank’s warnings about the UK’s reliance on tax revenue from a small number of better
off individuals.

It comes after its own research finds a growing number of the well-paid are looking to move themselves and their funds out of the UK.

The Institute of Fiscal Studies (IFS) is raising concerns that “lumping more taxes on the rich” is putting the country’s long-term finances at risk; whilst deVere Group reports that more than half (56 per cent) of its UK-based ‘high earner’ clients say they want to leave Britain within the next five years.

Nigel Green, founder and chief executive of deVere Group, comments: “The IFS is absolutely right to raise the alarm on ‘soaking the rich’ because these people, typically, have the resources to move to lower tax jurisdictions if the tax burden in the UK becomes too great. They are internationally mobile.

“Should they emigrate – and according to a recent deVere poll a high number very well could – government finances will suffer considerably because they contribute a disproportionately large amount to the state’s coffers. 30 per cent of all income tax and 7.5 per cent of total tax revenue is paid by those earning £150,000 a year or more.

He continues: “In a recent survey of more than 190 high earning clients, more than half revealed that they are considering a move to live and work or retire overseas within the next five years. The primary reason for this is that they feel taxation in Britain is stifling their financial ambitions.

“They tell us that they believe their hard-work, aspiration and success is being punished and they fear more punitive taxes on achievement could be on their way. As such, many are considering their options outside the UK.

“This should be a wake-up call for political leaders because the state is reliant on these people’s taxes.”

Mr Green concludes: “If the government is serious about having the better-off pay more tax, they should cut rates further and allow them to become wealthier. This would incentivise top achievers, who prop-up ‘The System’, to remain in the UK. However, I suspect that implementing this economically-sound philosophy would be political suicide for many politicians in the current climate.”