For the past 16 years, Melanie White Terry has been working through her financial advisory firm, Harbor Financial Group. Her clients are primarily busy and highly successful professionals or entrepreneurs that have comfortably broken the six-figure barrier and want to secure their legacy.
Harbor Financial Group helps clients crystalise their objectives and take the time to understand what they want to accomplish from a business and personal perspective; giving them piece of mind.
What are the typical challenges that clients approach you with in relation to the management of their finances?
Most people don’t have the time, knowledge or inclination to implement all of the ideas and opportunities they want to pursue. Many have done some good planning. They have existing relationships with very good advisers. They have spent a lot of time talking about these things but, for some reason, the job never gets done. We will never undo any of the good work that they may already have in place, we tend to focus on their areas of vulnerability. We take responsibility for seeing their plan to fruition.
We typically explore some or all of the following seven areas:
- Family income and security
- Asset Shifting
- Asset Distribution
- Estate Equalisation
- Business Succession
- Asset Protection and Estate Depletion
- Charitable opportunities
What are the most important aspects that need to be ironed out in order to achieve satisfactory result and a well-organised retirement plan for your clients?
Understanding my clients’ objectives is paramount. I want to know how they feel about the areas they would like for us to consider: security for themselves and their spouse, estate distribution, general terms of their will or plan, succession plan, key employees, and tax issues.
It is also important to gather information about their family, business, real estate, liquid assets, qualified plans, life, disability and long-term care insurance, liabilities, charitable giving, and advisers.
Identifying issues and gaps in their planning and how they feel about them is critical.
Lastly, our clients should have enough discretionary income and/or sufficient assets to be able to either execute or at least begin the plan and the willingness to learn about what might be non-traditional planning opportunities.
How do you assist clients with finding out if they are compliant with federal requirements applicable to retirement? What are the key issues that they face in relation to compliance?
We collect statements to support all of the information that we gather and keep up with the changing laws and regulations by taking applicable continuing education courses and leaning on the consultants on our team that have a wealth of expertise in tax law as attorneys and CPAs.
Additionally, we do a proper fact-finding analysis to determine their time horizon, investment risk tolerance and ensure that they are in plans for which they qualify, based upon their income, employer plan offerings, business structure, employee information etc.
How can your clients ensure that as much of their estate goes to their family on their death?
Insurance is one of the foundations in a comprehensive planning strategy. We assess the amount and type of coverage they have already relative to their objectives and determine if there is a gap to fill.
We tend to recommend that our clients have enough life insurance to replace their income and pay off liabilities to creditors and Uncle Sam. When appropriate, we may recommend establishing appropriate trust documents.
Disability income insurance is recommended to protect what could be their greatest asset; their ability to earn an income.
Long-term care planning is recommended to protect assets because most of our clients did not budget for an additional $7,000-10,000 per month of expenses to self -insure above their retirement expenses.
Does Harbor Financial Group offer any solutions in respect of maintaining and growing wealth for future generations of the same family?
We make it a common practice to reach out to beneficiaries and other family members of our clients to address their planning needs as well.
Contact details:
9861 Broken Land Parkway, #150
Columbia, MD 21046
Telephone: 410-740-4719
Website: harborfinancialgrp.com
Email: mwhite@ft.newyorklife.com
This month, Finance Monthly caught up with Aubrey Mills – a mother, Ms. California Woman of Achievement 2018 and a Business Development Leader at World Financial Group. Below, Aubrey tells us about her passion for educating families, individuals and businesses in ways to make money, save money, and stay out of debt.
What does your daily work consist of and what do you believe you bring to your clients?
Most of my time is spent building relationships with clients and associates. I don’t want to just hire people and have them work for me; I want them to build careers and lives they are proud of. I want to get to know my clients so that I can best guide them on financial decisions. Learning how people work or what makes us think differently was important, not just so I could be a better saleswoman, but so I could better serve my clients. I studied Human Nature and Communication, so I could better understand people. I’m currently learning to better understand other cultures because I believe that everyone deserves the opportunity to be educated financially. I teach free classes to the community and I want to be as effective as possible.
What attracted you to the insurance field and what drives you to push further the boundaries of your work?
I never wanted to work in finance. I came from a low-middle income family and had always assumed that finance people were older men. I once heard a woman speak about finances and I remember two things about what she said: she was raised by a single mom (I’m a single mom) and how hard it was for her growing up that way, and the Rule of 72. It was one of those awakening moments. I didn’t want my children to feel deprived growing up. The Rule of 72, or compound interest, showed me how little I needed to save for retirement and my children’s college fund and how fast my debt was doubling. I have had friends whose spouses didn’t have life insurance and they suddenly passed away. I couldn’t stand to just sit by and continue to watch that happen. Money doesn’t bring a spouse back, but it allows the family to properly grieve.
You commonly work with military families; what challenges are presented for these clients, particularly in the insurance sphere, and how do you help them overcome these?
My biggest obstacle is conveying to them that the insurance they have will not necessarily remain the same when they exit the military. Most of our service members are young and they get a basic ‘money talk’ when they enter, but this is not sufficient. I believe strongly in doing whatever we can for our service members, not just to equip them for keeping us safe and free, but to have a rich and full life after they leave the military. I don’t feel like we are doing enough - not even close. Many of our service members join right out of high school and they now have an income they didn’t have before, so of course they want to spend it. I know when I was aged 18-20, all I did was work, so I can then shop. But this wouldn’t have been the case if I had known what I know now, 13 years later.
Education and getting young people to see the value in saving are two of the most important things I can provide them with.
What have been some of the most difficult issues you have dealt with alongside clients?
Anytime I have an older client with multiple investments, it gets tricky. They have a fear of losing money and a fear of change. Even if they aren’t in guaranteed accounts, they have a hard time switching. That’s where the friendship and rapport that was built comes in. You really must know who they are and how they communicate. You want to build trust, so you can have those hard conversations.
As a thought leader in this field, what would you say must change to ensure a fair and just future for your clients when it comes to insurance?
First of all - be you. Whatever that means. People like you need help from you. When I first started in the industry, I thought I had to fit a mold. It wasn’t until I allowed myself to be unapologetically me that things changed. I love to laugh. I use humour to ease tension and those hard conversations. I’m a bit goofy and I’ve learned that it makes it easier to help others learn as opposed to being uptight and rigid. So just be you.
Secondly - integrity, 100% of the time. I see people come into the industry and they get so blinded by the amount of income you can make, and they chase it. The business that pays is the business that stays. You can’t keep clients and agents if you don’t have integrity and heart.
Website: http://www.worldfinancialgroup.com
Based in Liechtenstein, Incrementum AG offers wealth management services for private clients, as well as a range of investment funds and investment solutions.
To hear about Incrementum’s wealth management offerings and services, Finance Monthly caught up with the company’s CEO and Co-founder Stefan M. Kremeth.
What inspired you to found Incrementum?
Our objective when founding Incrementum AG was to offer first-class services to private clients and investment fund investors at fully transparent and competitive prices and to work with an inspiring team, in a fun environment.
What would you say are the key issues that you assist clients with regarding asset management?
Our investment team is very interested in and has a profound understanding of monetary history, combined with out-of-the-box reasoning and prudent, fundamental financial research, purposely avoiding daily chatter and noise. This offers a distinct skillset that has proven to be utterly valuable for our private clients and investment fund investors alike.
What strategies do you implement to ensure that your clients’ goals and objectives are achieved?
We only offer cashflow generation and capital preservation strategies. Participation in listed companies is very tangible to us and equities therefore belong to our core investments. We are building truly customised client portfolios according to our clients’ requirements, needs and willingness to accept risk. We are long-term investors and we invest solely in equities of listed companies with a proven track record of producing net-free cashflows over years, happy to share those cashflows, at least partially, with investors in the form of dividends and/or capital reductions. On the other hand, and after many years of extraordinary money supply and ultra-low interest rates, we do not invest in government bonds, as we do not feel comfortable with the current risk reward profile offered by them. Large-scale monetary policies are difficult to judge and while we are not entirely certain that the increase in global debt will be sustainable, we are humble enough to recognise that so far, the leading central banks seem to have dealt with the 2007/2008 financial crisis rather well. Either way, at Incrementum, we see money only as a means for facilitating global trade, consumption, potentially storing short-term value and thus - as a lubricant for the global economy.
How important is a maintenance strategy for optimising asset value?
At Incrementum, we very much believe in an active portfolio management approach. We cut back positions that have reached our price targets and we are interested in buying into companies that have sound underlying business models, but have missed their targets for a quarter or two. We are very patient investors.
What are your hopes for the future of Incrementum?
We are happy with what we have achieved so far but are constantly striving for innovative growth. Last year, we entered a new business field by setting up our Crypto Research report, which swiftly became the most read research report in the crypto currency field.
Website: https://www.incrementum.li/
To hear about defined benefit transfers and pensions in the UK, Finance Monthly connected with Chartered Financial Planner and Chartered Wealth Manager Pierre Coussey. With over 30 years of experience in financial services both within the largest providers in the UK and at the coal face within private practice, Pierre is also the current Chairman of the Personal Finance Society (Kent region) and is a past Examination panel member of the Chartered Institute of Securities and Investment (CISI).
What are the typical challenges that clients approach you and Bond Wealth with in relation to transferring their defined benefit pension?
Pension freedoms, which came into effect in the UK back in 2015, introduced the ability for those with defined contribution pension arrangements to access their pensions without the need to buy annuities and also pass their pension funds onto family. The biggest headline was probably giving them a choice to buy a Lamborghini if they choose to do so. This did not cater for the 5.1 million people in the UK who held old benefits in an ex-employer or closed defined benefit scheme (pensions that promised an income for life). One of the things we have seen is a massive demand for pension transfer advice and this is partly being driven by some of these factors, together with historically very high transfer values in terms of multiples of deferred pension promise (with 30 to 40 times being quite common).
The complexities of what is best for a client are amongst the most challenging and are often not fully understood by potential clients. Our general view is that for the majority of people, sticking with the defined benefits will be correct unless they can fully take into account wider factors and understand them. Thus, a starting question would be “why would they want to give up a guaranteed pension for life?”.
What would you change about defined pension schemes, if you could?
As a pension pot needs to meet a number of needs, it is frustrating that in the main partial transfers from the existing defined benefit schemes are not facilitated. If I could have a panacea, this would be available to all, so that a mixed approach could be customised specific to a client’s actual needs rather that the current all-or-nothing transfer choice. Unfortunately, I do not see this changing as existing schemes have no appetite to spend on this flexibility for past members and are inundated with transfer value requests.
What is your overall piece of advice for Finance Monthly’s readers in regards to defined benefit schemes?
My overall piece of advice regarding defined benefit schemes is to start with the assumption that your existing pension arrangement will be best in providing for you and your family and then write down your three main reasons for considering or wishing to transfer and the three main drivers in your retirement planning. The bigger the lifestyle cost this needs to support, the bigger the value and risk transference you are putting into your own lifestyle bucket.
Additionally, talk to an experienced regulated adviser who can initially help you explore your real lifestyle needs. This should be followed by further working with them to explore your actual retirement needs that will fit with your lifestyle in the future. Ultimately, if they can save you from potential mistakes at either of these stages, the cost of good advice will be small compared to what would be at risk of getting it wrong. If you transfer out of a defined benefit scheme, you cannot reverse that decision and transfer back.
Ultimately, your chosen regulated adviser can take you through these initial steps at a relatively low cost. It is essential to bear in mind the merits or drawbacks that may appear with the transfer, but might not become clear until several years down the line. One example of this is that a client is probably not going to run out of money in the first year. The risk of this however could increase in the following 10-15 years, if they, for example, decide to spend all of their money on the aforementioned Lamborghini.
Contact details:
Telephone: 01892506891; 0203 096 3385
Email: pc@bondwealth.co.uk
Finance Monthly speaks to Pierre-Noël Formigé, the Founder and CEO of Swiss company SEQUOIA, about the wealth management and estate planning solutions that his company provides, as well as his tips on maintaining and growing wealth for future generations.
Can you tell us about the core services that SEQUOIA offers?
SEQUOIA offers a holistic approach of wealth management thanks to a genuine "open architecture" which includes: wealth management, establishment of funds, management of funds - advice and follow-up, estate planning (trusts, foundations, companies), services of family offices, life insurance, financing (real estate, aircrafts, boats), reports and record keeping, risk management, compliance and regulatory assistance.
What would you say are the particular benefits for individuals of having professional assistance in relation to managing their wealth?
There are numerous benefits for individuals that decide to trust SEQUOIA with their wealth management. Our aim is not only to offer financial services, but also a financial experience and networking. Each solution and experience that we offer are specifically and uniquely tailored. SEQUOIA’s modularity and extensive experience allow for easy adaptation to our clients’ expectations.
What strategies do you and your team at SEQUOIA implement to ensure that your clients’ goals and objectives are achieved?
At SEQUOIA, clients are in the centre of our decision-making processes - they are our key priority. We have developed a well-informed overview of each of our clients’ financial situation, as well as a better understanding of clients’ goals and limitations.
Every portfolio construction starts with a discussion with the client or its representative, in order to fully understand their objectives and deliver a tailored-made investment proposal, allowing to approach and negotiate with partners. Our team can, at the request of the manager, take on a direct role in the relationship with customers, in accordance with their objectives and needs.
In your experience, are individuals fully aware of their assets and worth so that they can take advantage of tax planning? Which types of assets are usually missed?
SEQUOIA’s clients are fully aware of their assets, however, they might not be fully aware of their tax impact. We ensure that clients have better tax awareness, as it does have the potential to improve individuals’ returns. According to surveys, while many factors impact investors, the majority of high-net-worth investors say that it’s more important to minimize the impact of taxes when making investment decisions, thus we offer the right measures to help high-net-worth clients reduce the taxes owed on income and investment gains.
In order to do so, we put a lot of effort in selecting the right investment products. We try to take advantage of some losses, and implement additional strategies that can help our clients to manage, defer, and reduce taxes. However, sometimes, clients do not mention their real estate assets, which could have an effect on tax planning; we provide advisory services in relation to that too.
What solutions do you offer in respect of maintaining and growing wealth for future generations of the same family?
Transmitting heritage built from generation to generation and building a better future for entrepreneurs is the essence of SEQUOIA Group. Our team of professionals provides high-quality services in order to manage our clients’ wealth, taking future generations into account.
From portfolio management - with tailor-made investment solutions matching the clients’ needs, to liability management - which includes heritage planning, distribution agreements, trustee and real estate project management, SEQUOIA provides a cost-effective turnkey solution based on legally compliant practices to deal with the impact of new regulatory landscape and the different legal, technical and operational risks.
How challenging is it to work in an ever-changing regulatory environment?
It is obvious that the status quo cannot be maintained in this ever-changing regulatory environment, however, SEQUOIA’s approach regarding this is to constantly adapt and understand those changes to serve our clients better. Choices that have been made in the past may not be completely relevant in today’s environment or vice versa, but our job is to continuously develop strategies that are relevant to our clients.
Website:
http://www.sequoia-ge.com
For an insight into retirement planning in California, this month we reached out to Zachary W. Herzog - Managing Member and Investment Adviser Representative of Wolfgang Capital LLC. In his role, Zachary is in charge of designing and implementing customized financial plans for the company’s clients - tailored to their goals, concerns and what’s important to them now and in the future. Wolfgang Capital’s team looks at all aspects of financial planning including Risk Assessment, Assets Allocation, Income planning, Wealth Maximization, Health Care Planning, Legacy Planning and Tax Strategies to create their comprehensive financial plan. Here Zachary tells us more about it.
What are the typical challenges that clients approach Wolfgang Capital with in relation to the management of their finance?
The majority of our clients want guidance on what to do - they don’t want to make wrong decisions when it comes to certain stages of their retirement. Social security, RMD, long-term care, retirement account management, income planning and tax strategies are most of the concerns that we come across. The biggest worry for our clients is whether they’ll run out of money at some point.
There are two phases in life when It comes to retirement planning - accumulation and income phase. A lot of individuals need help with their income phase of life and that’s what we do. The sequence of events risk isn’t something that’s talked about enough in our industry, so we try to protect our clients from the sequence of events risk when it comes to planning their income in retirement.
What are the most important aspects that need to be ironed out in order to achieve satisfactory result and a well-organized retirement plan for your clients?
We need to make sure to cover their income, asset allocation, risk assessment, asset maximization, health care, legacy and tax strategy planning, which is what our comprehensive financial plan does.
At Wolfgang Capital, we always make sure to understand our clients’ complete situation and goals before moving onto implementing solutions. We incorporate many different strategy assessments to really find out what their common concerns and goals are, so we can implement solutions that really accomplish their desires. Our team spends a lot of time on our clients’ cases at the beginning and on an ongoing basis. It’s important to us that our potential clients are serious about planning their retirement and unfortunately, not everyone is a good fit for our firm. We only work with people that are serious and dedicated to having a sound financial plan in place.
How can your clients ensure that as much of their wealth goes to their family on their death?
Legacy planning is a big part of the overall financial plan, which is why we incorporate 3rd party estate attorneys and CPAs when needed to make sure that the overall financial plan is passing on to their loved ones when clients pass away. We incorporate IRA planning and tax advantaged strategies to help pass the assets on to their family in the correct manner.
Does Wolfgang Capital offer any solutions in respect of maintaining and growing wealth for future generations of the same family?
Yes, we have several different reports that show the power of stretching or generational skipping. We also look into tax advantage solutions to maximize wealth transfer upon someone passing away.
“Our motto is to treat our clients like family.”
Website: http://wolfgangc.com/
Phone: 951-200-5084
Fax: 951-200-5093
Email: info@wolfgangc.com
Fee-based financial planning and investment advisory services are offered by Wolfgang Capital LLC, a Registered Investment Advisor in the State of California. Insurance products and services are offered through Wolfgang Financial and Insurance Agency LLC. Wolfgang Capital LLC and Wolfgang Financial and Insurance Agency LLC are affiliated companies. Neither Wolfgang Financial and Insurance Agency LLC or Wolfgang Capital LLC provide legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Wolfgang Capital LLC,Wolfgang Financial and Insurance Agency LLC and Zachary Herzog are not affiliated with or endorsed by the Social Security Administration.This content is for informational purposes only and should not be used to make any financial decisions.
Michael Hosford is the Founder & CEO of Synergy and its two branches - SynergyPRO & SynergyPhD. Founded in 2001, Synergy Insurance and Investment Advisery Services helps clients build and manage their wealth. SynergyPRO is the company’s branch that serves the MLB, NFL, NBA and entertainers that Michael and his company have been fortunate enough to represent.
In June 2017, with the help of Co-founders Kurt Marozas and Alex Pina, Michael launched and franchised SynergyPhD to serve pension professionals nationally. This branch is helping people who are educators, fire fighters, and police officers properly select their pension options at retirement.
Here Michael speaks to Finance Monthly about the start of his career, the motivation that drives him and his goals for the future.
Your upbringing was slightly unusual, however you founded your own company during your senior year at Southwest Texas State
University. How did you manage to achieve this and what was the motivation that was driving you?
I think when you grow up without a father and your mother moves out of state when you are 14 years old, this leaves you with two choices. You can either fold or fight back at your chance for a successful life and take advantage of the American Dream. I chose to fight back!
Early on, I learned a few things about myself – that I did not like feeling embarrassed, or not having nice clothes and having to stand in the free lunch line at school. I wanted more and I knew understanding money would be a good start. I put myself through college by working for four years at Wal-Mart, and then launched Synergy, an independent financial advisory firm, during my senior year at Southwest Texas State University.
I graduated with a BBA in Finance in 2001. In 2002, I was asked to address the advisers at a large financial services firm at their Leaders’ Conference in Hawaii. In 2002, I was also named to American General Life’s prestigious Legion of Honor.
I have spoken all over the nation to clients and advisers and I have qualified for the Million Dollar Round Table (MDRT), Court of the Table, and Top of the Table on numerous occasions. In addition to helping hundreds of teachers understand and improve their pension plans, I have helped many HNW individuals including NFL and MLB professional athletes, properly structure their wealth distribution plans. I believe that my success comes from treating each client the way I would personally like to be treated and giving them the care and attention they deserve.
What attracted you to the financial advisory field?
The ability to help people properly plan their future, protect what they have and take care of their families should death, disability or the need for long-term care arise.
What is Synergy’s philosophy?
Our philosophy is protection with steady growth and a complete understanding of the situation, despite what your retirement plan will look like when considering pensions, social security, other assets and net of taxes. I think the reason people are not good at retirement is simple – ‘they have no experience at it and they have never done it before’. To me, it’s important that a future retiree knows where they stand and gets properly educated on insurance and certain annuity products that can provide stabilization and growth when they need the money most. Our philosophy can be described as ‘choose not to lose’.
What would you say are the specific challenges of assisting clients with insurance?
I think one of the challenges is the name ‘insurance’ itself and what some people think about it. If I am on a plane and want to take a nap, I just tell the person next to me: “I sell insurance”, and they won’t say a word to me!
In all seriousness, the ‘fee only’ adviser, and certain talk show hosts, have denounced insurance because they simply do not or do not want to understand the leverage, strength and value these products provide. I jokingly say: ’None of my clients wanted those products prior to being educated, but once needed - they love them’.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
Our strategy is education - help people understand that life is not based on a 20-year or 100-year ‘average rate of return chart’. Life happens daily and there will be both good and bad news. Both scenarios require the need for money. Don’t tie it all up until you’re 59 or when you lose your job. Be in a position to utilize your assets.
Your firm also provides investment advisory services – how are most financial investments structured in Texas?
The investment advisory service allows me to utilize fee-based accounts or charge a fee, should a client simply want an outside option. This allows us to buy low after any market corrections. Given that I am licensed in several other states, I would imagine that Texas is similar to other states and we use the wide range of products available to us.
How do you assess levels of risks for investment strategies? How can you accurately assess the level of risk that an individual is prepared to accept?
We have a unique way of planning. We utilize products that have built-in guarantees to provide a steady and somewhat, predictable income distribution plan. Clients either accept or reject this offer. With markets at all-time record highs, I am concerned that people who say they are ‘risky’ could lose and lose badly, while needing the money they’ve invested. I do not want to be a part of that - I have not forgotten 2001 and 2008.
In what ways has your company changed in recent years?
In recent years, Synergy has downsized some of the adviser affiliations and we are moving forward with a more focused group. We will focus on the franchise model of bringing people in with a high desire to be an entrepreneur, people that have the income or savings to transition into becoming a franchisee and are excited about the opportunity. We’d like to work with professionals that have a high desire to help people, individuals that have won at life previously and want to help SynergyPhD grow into the #1 recognized firm for helping pension employees properly choose their pension options at retirement.
What excites you about the future?
At age 38, married, and the father of four children, I am excited about the future. With 17 years of experience, I feel as excited about this industry as I did at age 21. I am prepared to have 100 franchisee store fronts across the nation within 10 years.
Contact details:
Email: michaelh@synergytx.com
Website: https://www.synergytx.com/
Twitter: @SynergyPro7
By Melanie Ison, Nerine Group of Fiduciaries Hong Kong Managing Director
Originally from Guernsey in the Channel Islands, I started in the trust and fiduciary sector in 1998. I worked for a large South African bank-owned trust company in Guernsey for eight and a half years before making the move to Hong Kong in June 2007 where I joined a large global bank-owned trust company. From there I moved to Nerine in 2008, and took over the running of the Hong Kong office in 2011 with formal appointment as managing director in 2015.
The Nerine Group of Fiduciaries core business is bespoke succession and wealth structuring for global High-Net-Worth (HNW) and ultra HNW families.
Guernsey is a leading jurisdiction for succession planning so it was natural for me after finishing my education to move into this interesting sector. When I started in the industry, I quickly realised that succession planning for individuals and families exposed me to a wide range of issues and circumstances. It is a varied area of wealth management and has a genuine impact on people’s lives; getting it right for a family is rewarding. Being able to apply my experience and expertise in structuring appropriately for families brings a lot of satisfaction. There is an assumption that we deal solely with financial assets but that’s just not the case. We have the capabilities to deal with real property, family businesses and unique assets as well as facilitating family discussions and managing issues; family governance matters are becoming an increasing part of what our clients need from us.
From a Nerine perspective, my key responsibilities in Asia include overseeing the growth of the business in this region and ensuring Nerine’s brand remains strong in the region. Nerine has an enviable reputation for working with the best professionals in the best interests of our clients throughout Asia. I have been significantly involved in ensuring Nerine is synonymous with expertise and knowledge, and am pleased to say we are trusted by our clients and have grown both our staff numbers and our business presence and recognition throughout Asia.
It is through our trusted relationships, and our ability to tailor bespoke solutions to each client’s needs and expertise that we succeed. Trust and fiduciary specialists should give the right advice and implement the right solutions, so families can ensure they’re as well prepared as possible to preserve and enhance their wealth for the next generation and beyond.
At Nerine, we help families to get the right professionals involved to address their broad financial and familial needs. We anticipate issues and put in place good family governance, appropriate ownership structures and excellent corporate governance for their circumstances; it’s not an overnight process and taking shortcuts can have disastrous consequences.
Ineffective succession planning can cause a family business to shut down overnight. There is significant case law in Asia which can all too often make this a reality. One of the best known, and widely publicised, of these cases was the famous Yung Kee Restaurant and the founding Kam family. The case ended up in Hong Kong’s Court of Final Appeal and caused a bitter family feud because expectations were not managed and family members had differing views which had not been clearly defined or planned for in prior discussions. Cases like this are increasing as families become more international and generations think differently from one another; they help us as responsible fiduciary specialists to hone of expertise and avoid pitfalls.
Cultural sensitivities must be taken into account, particularly in the area of family wealth and business where the younger generations may have been schooled elsewhere and don’t hold the same traditional values and visions as their parents or may not feel the same sense of legacy towards the family business and wealth.
Asian HNW individuals and families continue to grow in number and wealth. Their needs, and those of the generations to follow them, will evolve and develop as they lead increasingly global lives with varied interests. It is those fiduciary experts that fully immerse themselves in the region, who are able to cater to the varied demands and respect the traditions, while keeping abreast of developments within the sector, who will win the trust of clients looking to ensure their legacy is secure and successfully passed on to the next generations.
Nerine Trust Company (Hong Kong) Limited
Suite 1703
17th Floor Central Plaza
18 Harbour Road
Wanchai
Hong Kong
Tel: +852 3125 1200Fax: +852 2537 7624
Melanie.Ison@nerine.com.hk
Lindsay Leggat Smith is a Scottish solicitor who has worked in the international trust and company services field in Monaco for some 30 years. Following the recent acquisition of Carey SAM in Monaco by international professional services provider Equiom Group, Lindsay continues to serve as Chair of the Monaco operations, where a significant part of the business relates to cross-border inheritance issues, an area in which Lindsay has considerable practical experience.
What are currently the hottest topics being discussed in relation to wills and probate in Monaco?
Without a doubt, the hot topic of the moment is Monaco’s enactment in June of this year of Law No. 1.448, which brings welcome clarity to many facets of private international law. These include such matters as the competence of the local courts, recognition of foreign judgements and public documents, conflict of laws, various forms of contractual obligation and importantly, matters involving the person being capacity, marriage, divorce and separation, adoption and maintenance provisions. Inheritance (“Succession”) is dealt with at Chapter V of Section II. The principal change relates to the introduction of the concept of professio juris into Monaco law. While this principle, which allows individuals to choose the law applicable to certain of their activities, is now to extend to several areas such as marriage, divorce and separation and certain contracts, its effect is likely to be felt mainly in the field of inheritance.
Monaco is henceforth aligned with the principal provisions of the European directive, allowing choice of law in matters of inheritance, with the choice now being available between the law of the place of last domicile or the deceased’s national law. Nationals of common law countries who reside in Monaco may thus now submit the administration of their estates to their respective national law as opposed to the civil law of Monaco, their place of domicile. This can often be of interest to testators unfamiliar with local law who are reluctant for it to be applied to their estate, and in particular the civil law principle of forced heirship. Law 1.448 has the effect of extending to simple Wills the essential features of Monaco’s Law No 214 of 1935, which still regulates Will Trusts written by common law nationals in Monaco. Failure to make a choice will result in Monaco law being applied to its full effect.
What are the challenges associated with operating in this sector?
Monaco is home to individuals of 130 different nationalities, so the main challenge of catering to the inheritance needs of this clientele stems from the huge diversity of the issues which can present themselves. These are often very complex, involving questions of law and taxation, in particular in several jurisdictions at once - in circumstances where the heirs of a deceased Monaco resident are themselves located in different countries. Complex family relationships also arise in cases where a deceased may have children from several marriages. Executors and Trustees often find themselves facing questions which go beyond matters of estate administration. The work is stimulating and allows a great deal of interaction with our network of colleagues and contacts overseas.
What do you think lies on the horizon for wealth management?
Opinions will differ, but it may turn out that the effects of the seemingly unstoppable rush to transparency in all walks of life will dictate or at least greatly influence wealth management strategy for the immediate future. Beneficial Ownership and Trust Registers, FATCA and CRS automatic exchanges of information, and Legal Entity Identification numbers for securities transacting in Europe are all measures designed to track and record investments and assets held by individuals and, to a lesser extent, businesses. These latter are, however, subject to no less intrusive controls at various levels. Leakage of information through investigation, theft, hacking and the like will be exploited on social media. The overall result will be a continuing drive towards investments which are beyond reproach, transparent, fully reported and taxed, and socially sustainable.
Carey SAM recently became part of Equiom– could you tell us a bit about the acquisition?
Carey SAM in Monaco joined Equiom Group in late September but we are already seeing the impact of this exciting new development. The acquisition process was most harmonious and it is obvious that we share many common values. Equiom is a multi-jurisdictional business with offices in many leading international financial centres. The Group’s focus is entirely aligned with ours – attaining the best possible outcomes for our clients, wherever they are and whatever their needs. Being part of Equiom Group will give us that extra reach and opportunity to work with our new colleagues towards that goal.
Website: www.equiomgroup.com
CAPITALIUM ADVISORS® is an independent wealth management company based in Geneva, offering premium services for international clients. More than a name, CAPITALIUM ADVISORS® revolves around people and values. Its founders, Alain Zell (CEO), Clement Schoeb (CFO) and Sebastien Leutwyler (CIO), share a passion for endeavors, abide by common values and adhere to a collective vision to redefine wealth management and its practices. In tune with a new generation of clients, the associates of CAPITALIUM ADVISORS® understand evolving expectations as well as the stakes that are at play. They offer an innovative approach, built on rigor and excellence.
Here, Finance Monthly speaks to the company’s CEO – Alain Zell who tells us all about the company’s beginnings, the services it provides and their plans for the future.
How did the idea about the company come about?
CAPITALIUM ADVISORS® was born of our determination to become independent, in order to guarantee our clients the highest possible standards of service and without any conflict of interests.
Wholly owned by Clement Schoeb, Sebastien Leutwyler and I, CAPITALIUM ADVISORS® is not a part of any financial establishment. This allows us to deliver services completely independently and with the standards of excellence that we have imposed on ourselves. Our added value is based on a firm commitment with two objectives: protecting and expanding our clients’ assets.
Tell us a bit more about the principal services the company provides and its priorities towards its clients?
We develop solutions especially for our clients, whether families, the emerging generation of millennials, or entrepreneurs. These offerings were not designed for our clients, but with them for the purpose of simplifying the financial component of their life equation.
We take a three-pronged approach:
CASA INVEST: We manage discretionary mandates, consultancies and supervisory services. Our investment landscape covers all types of financial assets and monetary bases. We implement tax-efficient management, in the structures and in the investments we select.
CASA NEXGEN: Our proprietary concept; it is the non-financial branch of the CAPITALIUM ADVISORS® services. It is targeted above all to families, helping them tackle challenges related to the transmission of patrimony. We offer an ecosystem built upon three pillars that the young generation interacts with on a regular basis: investment, education and mentoring.
CASA ADVICE: We help our clients to maintain total control over their private affairs, with a team of professionals who master the challenges and increasing complexities of today’s environment. Our company has equipped itself with state-of-the-art tools that allow for granular monitoring and analysis of financial assets.
How has the company grown in terms of operations and service offering in the past year?
We have stayed the course while focusing on our sole objective of disrupting common practice while offering our clients a unique financial experience. CAPITALIUM ADVISORS® is now one of Switzerland’s most important asset management firms. With our partner, SCHOEB FROTE® in Neuchâtel, in 2017 we exceeded the billion-dollar mark in AuM. Clearly, what clients are seeking more than ever is a relationship based on trust in which the lack of conflicts of interest allows a dialogue that goes to the essentials – preserving, growing and guaranteeing the transmission of their assets.
What differentiates Capitalium from its competitors?
While banks focus on staying profitable by cutting costs and raising prices, we do just the opposite – we constantly invest in enhancing our offering. This is the only to create concrete and tangible added value. Merely cutting costs is the reaction of those who are unable to renew their offering and adjust to clients’ new expectations.
On the portfolio management front, we have two requirements. First, we manage by convictions and avoid the "soft consensus" at all costs as it undermines performance over the long term and marginalizes risk control. Second, we privilege "open architecture" financial products. This guarantees us access to the best providers and the expertise of specialists. These requirements are accompanied by a clear code of conduct: refusal to receive retrocessions, no bias towards highly marginal products, no unjustified portfolios turnover and a systematic hunt for "hidden costs".
Foremost, performance is what drives our decisions and recommendations. We also consider factors such as flexibility and efficiency to optimize our output. Models borrowed from core-satellite institutional investors inspire our work. The choice of tools revolves around indexed vehicles and investment funds, which we supplement via investments in direct lines, derivatives, structured products and real assets.
If you could share one piece of advice with Finance Monthly’s readers, what would it be?
In most cases, clients customarily diversify by entrusting their assets to several different managers, including both banking establishments and independent asset managers. While the need for counterparty risk diversification is an accepted fact, this is not as true for the way that assets react once they have been invested. The reason for this is that, while all asset managers claim to be different, investment management profiles have inevitably converged, due to regulatory constraints (standardised risk profiles), temporary profitability biases (retrocessions and high-margin products), and the fear of losing mandates (benchmarking to reduce the risk of underperforming the competition). This has, in turn, increased the financial risk that is inherent to portfolios.
To address this bias and offer more structural and robust diversification in wealth management, it is becoming necessary to combine several different investment approaches. Taking a unique approach is, in itself, one way to diversify risk and manage family assets on a solid basis for the long term. With this in mind, CAPITALIUM ADVISORS® has developed a three-pronged model that aims to guarantee the greatest visibility and traceability possible in investments. By reducing the asymmetry of information that too often exists between managers and clients, we provide clients with all the tools for objectively evaluating the work done and making informed decisions. This makes clients participants in the management of their own assets.
“We say what we do and do what we say”: in portfolio management we stand out in the way that we strategically overweight or underweight assets in a clear-cut manner, as dictated by our analysis of the financial markets. Accordingly, we eschew “cosmetic” transactions, which are too often used to mask a lack of conviction in portfolio management.
“Before making comparisons, accept that it’s fine to be different” : in contrast to the “fog machines” that are too often used by the financial industry to explain away performances, we want to avail CAPITALIUM ADVISORS® clients of instruments that help them precisely measure the quality of services provided to them. To do so, we have entered into a contract with IBO, a firm that audits returns adjusted to real levels of risk and compares them to the main Swiss investment managers.
“Optimising one’s financial ecosystem”: based on each client’s investment management profile, we seek to determine which counterparties and suppliers of financial products are most able to allow us to stay within the commitment we have made to our clients that their total fees will not exceed 1%, hidden fees included. This is what we consider to be the fair price for wealth management. What’s more, this enhanced efficiency has a direct impact on performance by reducing the risk incurred on a constant-expected-return basis.
In addition to the more entrepreneurial and contemporary model that CAPITALIUM ADVISORS® offers its clients, wealth management, like many other businesses, is based above all on the notion of trust. And trust can’t be forced; it must be earned over time. We do believe that it’s possible to earn this trust through an approach offering full transparency on the business model, the absence of conflicts of interest, and an uncompromising investment management process.
What are your goals for the future?
Within a few months, CAPITALIUM ADVISORS® has positioned itself definitively as a player able to offer a true alternative to traditional banks. CAPITALIUM ADVISORS® will continue to expand both organically and externally while continuing to demonstrate the added value of a business model that is close to its clients and with no conflicts of interests. Backed by common sense, hard work, boldness and enthusiasm, we ensure that we are positioned to implement our ambitious plans.
Contact details:
CAPITALIUM ADVISORS® SA
16, rue de la Pélisserie
CH – 1204 Geneva
Phone : +41 22 544 63 00
Fax : +41 22 544 63 09
www.capitaliumadvisors.ch
info@capitaliumadvisors.ch
"Industry research uncovered that nearly half of financial advisors are either at or approaching retirement over the coming decade. More than 200,000 new financial professionals are needed to replace these retiring financial advisors, financial analysts, and wealth managers, to take over their clients and retainers," quotes Texas A&M law professor William Byrnes from an industry report. William Byrnes is a pioneer of online legal education and one of America’s most influential wealth planning and tax authors, with his books selling 25,000 print copies annually with like amount of online readers. This month, Finance Monthly had the privilege to speak with him about initiating Wealth Management program at Texas A&M University School of Law.
Why did you initiate a wealth management graduate program?
Discussions with large financial institutions, Big 4 accounting partners, and AmLaw 250 attorneys led me to understand why they are not finding qualified graduates for management positions. Hiring partners have disclosed to me that the wealth industry does not need adversarial or controversy skills and that it does not find the ability to read appellate decisions particularly helpful for wealth advisory. Firms are seeking future leaders that demonstrate in the recruitment process practice ready skills, such as team collaboration to design and present innovative client solutions, a holistic approach to client advisory drawing upon many areas of research, such as industry, market, and legal, soft skills to develop and manage cradle-to-grave client relationships, ethics and judgement in addressing compliance and risk. Also, hiring partners are seeking employees with the ability to communicate in written form for clients and boards. I heard several comments about associates not being able to write well and requiring substantial non-billable time to fix mistakes.
What makes Texas A&M the right institution for this wealth management graduate program?
When Texas A&M University’s new law school approached me, I decided it was the right institution to solve the wealth industry’s skills expectation gap! Texas A&M University is ranked #4 among the elite public universities by Money Magazine, #4 among all elite universities by Washington Monthly, and #4 by US News for best value among national public universities. Sure, rankings are an important indication of quality.
But what really attracted me to Texas A&M is its focus on innovation. As Ernest & Young concluded after its Tax Insights magazine interview: ‘The State of Texas not only established a new law school at the university but also gave it carte blanche to create a new education model’. EY also found that ‘Texas A&M University is among the pioneers of change in tax education’ and tax considerations are a key factor in wealth management. Texas A&M is not living on its past accomplishments, Texas A&M innovates and instills the ability to innovate in its faculty and graduates.
What more can you tell us about the program?
Designed to build expertise for both lawyers and non-lawyers, the wealth management program takes a deep dive into the legal aspects of finance, regulation, risk, and compliance. Lawyers and non-lawyers immerse together with a deep dive into the intricacies of managing wealth and risk. After an extensive RFP process, we partnered with Ken Randall of iLaw, BarBri’s newly acquired academic developer partner group for two primary reasons. First, Ken served twenty years as Dean of Alabama, taking it to the 1st tier and maintaining 1st tier status partly by offering high-quality online education throughout the United States. Second, Ken has assembled an industry-leading executive team that offers flexibility, scalability, and cross pollination for the highest quality program development.
Courses have been designed in an asynchronous online format, allowing students to participate in multimedia enabled lectures and learning experiences on their own schedule, providing flexibility for the industry professional who must juggle clients, family, and academic obligations.
But our asynchronous format is neither talking head nor Netflix binge-watching. Each course’s development team strives to deliver an integrated learning experience and includes a Texas A&M subject matter expert partnered with an iLaw multimedia specialist and instructional designer. We’ve combined this state-of-the-art design with live online group interactions and campus events such as the annual financial planning career conference with its awards banquet and two days of financial institution career presentations. In addition, we seek monthly feedback from our pilot class to calibrate the courses and improve the program experience.
What is the profile of Texas A&M Law’s graduate wealth students?
The pilot cohort of 30 professionals is split evenly between lawyers and non-lawyer, each with a median professional experience of approximately 10 years, which is manageable for testing our courses and the back office administrative and tech support in a large public university environment with nearly 70,000 students. This coming year we will expand our diversity to include international professionals and gauge the effectiveness of our 24/7 support systems across global time zones and cultural variances. I envision selecting up to 60 diversely qualified candidates annually to maintain the prestige of this Aggie degree.
Texas A&M University School of Law launched its revolutionary online graduate curricula in Wealth Management and Risk Management in 2017. More information may be found at law.tamu.edu/distance-education/wealth-management
Tim Orme is the Managing Director at BRT SA, running the UK arm of a Swiss BPO and Wealth Management technology business. The company provides outsourced middle and back office services to investment managers, as well as the bespoke technology platforms. Tim joined the company at a nascent stage and has dedicated the past 4 and a half years to leading the strategic and operational development of the firm, alongside his three colleagues on the executive team. As the UK business expands and continues to roll out BRT SA’s award winning solutions to more clients across the globe, a combination of high customer satisfaction and the firm’s healthy pipeline gives Tim and his colleagues continued confidence.
BRT came to life as a spin-off from Swiss asset managers Bedrock in 2007. Drawing on over 60 years of experience in private banking, the company has been growing profitably from the very beginning. Today, BRT has a staff of around 50 and serves 35 major clients who oversee more than 45 billion USD in AUM. We operate out of two offices, one in Geneva and a second in central London. Here Tim tells us more about the company, trends within wealth and asset management and his views on the future.
What is driving the current outsourcing trend within wealth and asset management? Subsequently, what are the key considerations for COOs considering BPO?
As the wealth and asset management industry becomes increasingly client orientated, the issue of which functions remain part of the core internal operation are being reassessed. Once coupled with downward pressure on operating margins and the increasing burdens of regulatory and compliance requirements, firms wanting to grow must consider innovative ways to manage operational expenditure, while maximising their efficiency and scalability.
Importantly the scope and interconnection of a BPO service needs to be closely tailored to each company’s unique procedural, investment and management philosophies. Non-differentiating generic activates such as reconciliation, price sourcing, report generation and data management can be easily transferred to specialist service providers, who can enrich them with best practices and scalable security of service, for example via an SLA. In the case where a service provider can combine established working methods with client specific customisation, firms can achieve a safe and reliable handover of these tasks without compromising on client experience & operational efficiency or undertaking cumbersome business transformation projects.
What are the key benefits for investment managers utilizing BPO service providers such as BRT?
When selecting an operational service provider that will play such a vital role within the business, it is absolutely key the solutions they provide are scalable, secure, capable and cost effective. All four of these aspects are mastered once the provider has gathered working methods from collaborating closely with its client base, as well as the additional positive externalities of critical insight and specialist process engineering. By working with an expert, investment managers can be sure they are staying up to date with technology and operations, while also freeing up time and resources to focus on their core activities of client relationships, research and generating alpha.
What is unique about the BRT approach to the market?
We work with our clients in two different modes, depending on their requirements. Firstly, we offer mature and dependable outsourcing services. This means our clients relinquish the burden of their back and middle office processes, as well as their IT and technology needs if necessary. As we cover the whole operational side, our clients don’t need to employ multiple service partners for this. Secondly, we offer the state of the art technology we developed for our own use, on a licensed basis. This allows those organisations who prefer to keep operational staff and processes in house the option to improve their overall operational functionality through customised software implementations. Over the years, BRT has established operational solutions boasting a well-established fleet of tools and services, and regardless of the role we play with each client, the core values of service, skill, discretion & integrity are ubiquitous.
What do you hope to achieve in the next few years?
Our shared goals for the company will continue to focus on the development of our product and service offering, essential to solidifying our position as the preferred partner to the wealth management industry. There is evidently strongly growing appetite for outsourced operational services, and as we build on 10 years of experience in this area we are confident of staying ahead of the curve and offering best in class solutions to wealth mangers, family offices, hedge funds and more. Our mobile solution, Fortress is also set to feature as a revolutionary private banking product, offering a simple, secure and totally white-labelled online portal, anywhere, anytime and on any device.
