Category: Wealth Management

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.

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.

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’.

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

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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.”

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.

GreenPath Announces 2015 Personal Finance Library Programs
Private FundsWealth Management

GreenPath Announces 2015 Personal Finance Library Programs

GreenPath has scheduled more than 30 programs at libraries in six states (New York, Florida, Wisconsin, Georgia, Michigan, and Texas) in April, May and June. This initiative will provide consumers with reliable, unbiased financial information and tools at convenient public library locations.

“At GreenPath, we think it is vital to go into the communities we serve to provide personal finance programs,” said GreenPath President and CEO Jane McNamara. “These free library programs are another way we can help people better understand budgeting, credit reports, identity theft prevention, and more.”

Nearly Half of Americans Saving Virtually Nothing
Private FundsWealth Management

Nearly Half of Americans Saving Virtually Nothing

Roughly one in five (18%) are saving nothing at all, plus 28% who are saving something, but not more than 5%.

America’s best savers are the middle class. More than one-third (35%) of households with annual income between $50,000 and $74,999 are saving more than 10% of their incomes, a rate that outpaces even the highest-income households.

“This proves the old adage that what counts isn’t how much you make, but how much you have left over,” said Greg McBride, CFA,’s chief financial analyst.
Overall, fewer than one in four Americans (24%) are saving more than 10% of their incomes. That figure includes 14% (one in seven Americans) who are saving more than 15%.

Those in the western U.S. are out-saving their counterparts elsewhere around the country; 31% of westerners are saving more than 10% of their incomes, compared with just 20% of southerners. The picture isn’t entirely rosy out west, however, because 19% of westerners aren’t saving anything. That’s worse than all other regions.
Although’s Financial Security Index dipped slightly from February’s all-time high of 104.8 to 103.7, it’s still at the second-highest level since its inception in late 2010. Readings above 100 indicate improved financial security compared to one year previous.

• Those who are feeling more secure in their jobs than one year ago outnumber those who are feeling less secure by a margin of greater than two-to-one (27% to 13%).

• Consumers’ comfort level with debt decreased slightly over the past month, but continues to remain positive relative to a year ago. 23% of respondents are feeling more comfortable with their debt and 20 % are feeling less comfortable than March 2014.

• Americans’ overall financial situation is progressing, with 29% stating that their situation has improved from one year ago and just 18% saying it has deteriorated.

• Savings remains the weakest of the Financial Security Index’s five components, but improvement is evident.

• 24% of respondents are more comfortable with their savings now compared to one year ago, while 27% are now less comfortable. That is the slimmest margin to date.

• For the first time, men are demonstrating more comfort with their savings than one year previous.

• Between 2010 and 2012, Americans who were less comfortable with their savings than 12 months earlier outnumbered those who were more comfortable by a three-to-one margin.

The survey was conducted by Princeton Survey Research Associates International (PSRAI).
PSRAI obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Interviews were conducted by landline (500) and cell phone (500, including 298 without a landline phone) in English and Spanish by Princeton Data Source from March 5-8, 2015. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.6 percentage points.

UK Retail Sales Beat Forecasts With 5.7% Rise
Private ClientWealth Management

UK Retail Sales Beat Forecasts With 5.7% Rise

Consumer spending continues to drive the UK economic recovery, with retail sales rising 5.7% in February compared with a year earlier. This was a whole percentage point higher than the 4.7% jump forecast by economists. February was the 23rd month of consecutive year-on-year growth. Average prices in stores fell by 3.6% in February, the biggest annual fall since records began in 1997.

A combination of rising wages and zero inflation means pay is recovering in real terms, having fallen significantly since the financial crisis. Lower fuel costs in particular are easing the pressure on household budgets, and the signs are that much of this extra disposable income is finding its way into retailers’ tills.

The majority of the sales growth in the year to February came from non-food retailers, such as department stores and household goods retailers – this willingness to spend on non-essentials suggests consumers are feeling better off. Given that CPI inflation is expected to fall below zero in the coming months, and stay close to zero for the rest of the year, the signs are positive that the UK consumer can remain in rude health. This is clearly good news for economic growth, but while domestic spending is always vital in a mature economy, there is a slight concern that the economy is becoming over-reliant on the consumer. Greater contributions from business investment and exports would arguably make for a more sustainable recovery.

Finally, the UK isn’t the only country experiencing a renaissance in consumer spending. Survey data released today showed German consumer confidence at a 13-year high, boosted by low inflation, a weak euro and a strong labour market.

Where Have All the Good Guys Gone?
Private ClientWealth Management

Where Have All the Good Guys Gone?

The growing firm has been on a consistent recruitment drive for the past 12 months and during this process managing partner, Colin Lawson, has felt that financial planners and paraplanners are not realising the exciting opportunity which faces the industry.

Colin said: “In the past five years the wealth management industry has been transformed: RDR shook bad practices out of the woodwork, pension reform revolutionised pension pot savings and banking restructures meant many HNW individuals found a gap in services and support.

“There is a need for a new breed of wealth planners and technical support staff who are head and shoulders above the rest. Not only do they need to understand the best products, tax planning and investment opportunities, they need to have the people and management skills to really understand clients personal needs and develop and deliver wealth management plans which provide clients with future financial confidence.

“Set traditional model approaches aren’t the norm, the wealth management industry needs to look for new avenues to explore. Proactivity and creativity is just as important as in-depth industry knowledge, and that’s what many candidates are failing to convey.

“I know there are talented, high calibre financial experts out there, (they can’t all just be in the current Equilibrium team!) and my advice is don’t be afraid to show your personality, passion and creative skills in the interview process. Yes, we work in the financial industry, but that certainty doesn’t mean we have to be boring suits!”

Equilibrium’s hands on approach to wealth management has led to the Cheshire-based firm increasing its assets under management by £80million in the last 12 months and being crowned ‘Firm of the Year’ (North England) in the New Model Adviser Awards 2015.

AVG Named Business Solutions Best Channel Vendor 2015
Private ClientWealth Management

AVG Named Business Solutions Best Channel Vendor 2015

AVG Technologies N.V. (NYSE: AVG), the online security company™ for 188 million active users, today announced it has been selected by Business Solutions Magazine (BSM) as a 2015 Best Channel Vendor in the Network Security category. The annual poll of Value Added Resellers (VARs) and BSM subscribers rated vendor partners in seven categories including service/support, channel friendly, product features, product reliability, channel program, product innovation and VAR margins.

“We are thrilled our industry partners have voted us Best Channel Vendor,” said Francois Daumard, VP Global Channel Sales, AVG Technologies. “2015 marks the start of a pivotal year for us as we work to make the Channel appreciate the new face of AVG Business. Still not enough partners truly understand the transition that has been taking place within AVG Business. Thanks to AVG Business Managed Workplace® we are first and foremost today a remote monitoring and management (RMM) applications vendor. Crucially, as business applications move towards an increasingly integrated future, the only established network security Channel vendor that is fully focused on integrated cloud and mobile applications development.”

Throughout 2014 AVG Business has continued to invest significantly in support of industry partners including holding its first Annual Partner Cloud Summit, introducing a new product portfolio, expanding its international distribution footprint and hiring some recognized industry big-hitters to head up its Global Channel Sales and Marketing teams.

Best Channel Vendor 2015 is the latest of many recent accolades for AVG that include recognition by Virus Bulletin’s VB100 for products and the 2014 MSPmentor 250 for excellence in managed services leadership and expertise.
During fall 2014, BSM partnered with Penn State University to conduct a Web-based survey capturing significant data from active VAR subscribers. A total of 8,848 validated votes were cast, continuing the tradition of one of the largest and most detailed surveys of its kind. Scores were tallied by BSM editorial staff using methodology provided by Penn State.
The full list of 2015 Best Channel Vendors appears in a special report in Business Solutions Magazine’s January issue.

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.


Barclays Fined for Risking Client Assets
Private ClientWealth Management

Barclays Fined for Risking Client Assets

Kiev.Victor /

The £38m fine issued by the Financial Conduct Authority (FCA) comes after it said the bank had risked around £16.5b worth of client assets. Issuing the fine for the practice which happened between November 2007 and January 2012, the FCA said:

“Clients risked incurring extra costs, lengthy delays or losing their assets if Barclays had become insolvent,”

Barclays responded by saying that it accepted the ruling but made no profit from the practice nor did any clients lose out. A statement issued by the firm said:

“Barclays has subsequently enhanced its systems to resolve these issues and to ensure we have the requisite processes in place. No client has suffered any loss as a consequence of this weakness in our processes which existed prior to January 2012,”

However, the director of the authority, David Lawton, said that ensuring client assets were safeguarded was essential for confidence in the financial services market, adding:

“Barclays lack of focus on the rules was unacceptable,”

The fine is the biggest ever handed down by the FCA for such an offence, despite the bank alerting the regulator to the issue itself and a 30% discount applied for early settlement.

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 /

 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.

Private BankingWealth Management

Keeping Your Finger on the Pulse of Your Finances

Rather than having to remember passwords, answers to secret questions and telephone length number combinations, bank account holders will instead be identified by their veins.

“It is in men as in soils where sometimes there is a vein of gold which the owner knows not”
– Jonathan Swift

The technology works with the use of an infra-red scanner. Portable and pluggable into any computer USB port, a customer simply places his or her finger inside the device with the unique patterns of their veins being read.

If the finger is approved, the customer will have access to their account within seconds.

The scanner will only be able to read the veins of a living finger, giving the technology a distinct advantage over fingerprint recognition and thwarting fraudsters much more effectively.

While it is the first time the technology has been on show in the UK, the new approach is successfully used in Japan and Poland. In both countries it is used on cash machines, (ATMs), with the customer not having to use a card or remember their personal identification number (PIN).

“Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs”
– Herbert Hoover

Initially, Barclays will only offer the vein scanning service to its business customers, with companies registering to use the technology able to register several members of staff. Barclays says the system will allow one person to request the payment with another approving it.

Barclays has said that the expense of the technology in its present form is unlikely to appeal to retail banking customers immediately, but the head of personal and corporate banking for the bank, Ashok Vaswani, explained it was ideal for larger firms:

“For corporate clients who do a lot of large transactions, this makes a lot of sense,”

However, retail devices and use-at-home devices could not be far away, which would create a whole new trend of finger banking.

Queen’s Bank to be Sold
Private BankingWealth Management

Queen’s Bank to be Sold

Reports are suggesting that the sale could generate £600m ($1bn).

The bank, founded in the 18th century, is likely to see interest from bidders across the world. However, it is unclear whether the new Coutts International will be kept as one entity or split up. If it is split, one operation would be based in the UK, the other in Zurich, Switzerland.

The Zurich operation would manage around £20bn of assets, primarily in Asian and Middle-Eastern countries such as Hong Kong, Singapore and Dubai.

A memo issued to staff by RBS ahead of the public announcement said:

“We will… work with local management teams to explore options including merging the remainder of the current Coutts International business, considering joint ventures or a sale, thereby reducing RBS’s footprint internationally.

“There are no immediate changes for individuals in these businesses and it is important that we continue to work together to deliver for our customers.”

It will be a further watering down of the bank which saw its, African, Caribbean and Latin American private banking operations snapped up by the Royal Bank of Canada in 2012.

In its present form, Coutts International has a presence in seven countries employing around 1,200 members of staff.

HMRC Targets Inheritance Tax Avoiding Trusts
Inheritance TaxWealth Management

HMRC Targets Inheritance Tax Avoiding Trusts

The plans intend to curb the use of trusts, with HMRC consulting over how to prevent people creating multiple small trusts to slash their inheritance tax (IHT) bills. HMRC say the proposals will:

“ensure fairness in the system”

The worst group hit is likely to be the moderately rich with estates valued up to £2m. Without the planning resources of the wealthiest groups they already shoulder a large IHT burden.

In 2011, the Mirrlees report said that the burden for the middle classes was disproportionate.

Official data released last week showed that estates valued at £1m or more paid 69 per cent of the total £3.4bn accrued in IHT through 2011-12. Advisers have said that conversely, the wealthiest paid comparatively little.

Trusts are a common tool used to manage the passing of assets to beneficiaries. However, they are less popular than they used to be, largely as a result of tougher restrictions, with HMRC figures showing that the number of trusts has fallen by 19 per cent since 2008-9.

Under the plans, individuals would be restricted to placing properties into a single ‘nil rate band’ trust. This has a £325,000 ceiling where no IHT is levied.

Under present rules, HMRC has said, a couple aged between 40 and 75 putting assets into trusts every seven years could shelter up to £3.25m from being taxed. That is five times the value the new rules would allow.

It went on to claim that it would be fairer to those who do not use trusts, rejecting criticism that it would disadvantage those using the facilities to make gifts to loved ones.

HMRC also said that a significant number of respondents to the consultation had objected because the plan:

“unfairly penalises sensible and moderate estate planning which up until now has been acceptable to HMRC”.

Advisers on the proposals expect full implementation of the plans with HMRC saying it will apply the new rules to trusts created after June 6 2014.

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.

Bitcoin to lead to "Tidal Wave" of Private Money
Private BankingWealth Management

Bitcoin to lead to “Tidal Wave” of Private Money

The innovation of non-conventional types of money – such as Bitcoin – has been fuelled by mounting restrictions on financial freedom. Constraints on commerce, the erosion of financial privacy and a wish for greater quality have been the driving forces in the emerging market for private money.

New Private Monies: A Bit-Part Player? by Kevin Dowd argues that states must allow a level playing field as far as private money is concerned. For too long the government has stifled competition between state-backed and private currencies. Instead, central banks should welcome competition as it forces them to offer consumers greater choice and improved quality.

A weakened ability to store value, growing restrictions on finance, oppressive taxes and a lack of financial privacy have resulted in growing frustration at state controlled money. The superior nature of private currencies combined with the financial freedom they offer has led to their increasing attraction.

Bitcoin enables its owners, among other things, to protect their wealth, make investments free from government control and retain a level of privacy, making it increasingly attractive. The price of Bitcoin rose from 3 cents in April 2010 when first traded, to over US$900 in January 2014.

The relationship between restrictions on individual freedom and demand for private money is also identified in the paper. The increasing constraints on personal freedom have led to private money becoming more and more popular as it enables people to do what would otherwise be illegal. The market for private monies will continue to thrive as long as states restrict and prohibit various forms of commerce.

Commenting on the report, Mark Littlewood, Director General at the Institute of Economic Affairs, said: “If government were to embrace private monies rather than suppress them, there would be profound implications for individual freedom. Bitcoin has proved widely successful as an alternative form of exchange and as way of restoring financial freedom. It is just the beginning however. Fierce demand for private money will drive innovation, creating a tidal wave of new and superior forms of exchange.”

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.