Frequently Asked Questions

A family office is an organization a wealthy family sets up by hiring a wide range of professionals across multiple disciplines – taxes, estate planning, accounting, bookkeeping, investing, etc. – to work for them and help them manage and execute their wealth management activities. By hiring a dedicated team of individuals, a family ensures that only their agenda is driving all of the activities. Many family offices manage budgeting, insurance, charitable giving, family owned business, wealth transfer, family governance, reporting and data aggregation and tax functions for the family they serve.

Establishing a family office can be a costly endeavor, sometimes costing more than $2 million a year to run!

Like a family office, multi-family offices tend to be holistic and focus on a broad range of wealth management solutions including investment services, estate and tax planning, family governance and education and risk management. The difference between a single-family office and multi-family office is simple – a multi-family office serves many families, distributing the costs of running the firm. Ideally, multi-family offices should be independent of any financial institution and offer un-biased advice – however, in recent years the term ‘multi-family office’ has become a popular industry term and has been used to refer to operations that are affiliated with large financial institutions, so families should be cautious when choosing the firm they will work with.

Ask any successful business owner about his succession plan and chances are he can explain it in detail. Why shouldn’t your family operate the same way? Creating a succession plan is important because it addresses questions and challenges, and it establishes your legacy for the future. Succession plans reduce intra-family conflict and ensure you are prepared for the future.

The place to begin is to start thinking of your wealth as a business – beginning with an extensive mapping of all the components and answering a series of foundational questions:

• Who are we as a family?
• What do we own?
• How do we own it?

Answering these questions serves as a starting place for your wealth enterprise^®.

STEP ONE: UNDERSTAND THE STATUS QUO

Ask any successful business owner what his profits and losses are and he could likely tell you. Income statements, balance sheets, cash flows – all of these critical pieces of information are standard for any thriving business. Why shouldn’t a wealthy family operate the same way? The first step in building your wealth enterprise^® is to gather a robust set of financial statements to gain a complete understanding of where you are, where you’re going and where you’d like to be.

STEP TWO: THREE PRIMARY COMPONENTS OF WEALTH MANAGEMENT

The next step is to thoroughly explore the three components of your wealth management.

1. The Eco-system of Providers: Identify all of your family’s providers – who is providing you services and why? Include asset managers, private banks, lawyers, accountants, trust companies, custodians, consultants, brokers  – anyone who is working with you in your wealth management.
2. Wealth Management Activities – To be sure your mapping is comprehensive, an overview of typical wealth management activities most families need to manage their wealth is helpful. Aspects to consider are: Financial Administration, Financial Planning, Estate and Tax Planning, Investment Advisory, Risk Management.
3. Strategy, Structure & Governance – This third but most critical component covers the underlying meaning and purpose of your wealth. How your family makes decisions, how they prepare for succession, how they educate the next generation of wealth owners, are all foundational pieces to establish; yet so many families leave them unexplored.

Once you’ve identified all the most important pieces of information in your wealth enterprise^®, it will become clear if there are any areas that need to be addressed.

To know where you’re going, you have to understand where you are. For a comprehensive guide to rethinking your wealth, download our guide below, “Where Do I Start? What Rethinking Your Wealth Can Do For You”.

A wealth enterprise^® is formed when a family begins to think of and manage their wealth like a business. Over decades of working with families like yours, we have seen that families beat the odds and sustain their wealth by managing it as a professional endeavor, tapping into the same processes and best practices that were used to create the wealth in the first place.

To create a wealth enterprise^®, they:

• Establish a clear purpose for their wealth and manage it with a long-term strategy.
• Have a clear understanding of everyone’s role involved in managing their wealth.
• Seek out and purchase, at the right price, the financial products that are right for them.
• Obtain robust reporting capability that allows them to measure progress.
• Establish effective decision-making processes, with transparent governance structures in place.
• Continually evaluate each provider’s effectiveness in managing their wealth.

Learn more about creating your Wealth Enterprise^®

According to the SEC’s website, the Form ADV is the form used by investment advisors to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. Part 1 of the ADV requires information about the investment advisor’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the advisor or its employees. Form ADV Part 2 requires investment advisors to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the advisor’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the advisor.

ALL REGISTERED INVESTMENT ADVISORS MUST SUBMIT AN ADV TO THE SEC.

It’s relatively easy to find an ADV for an advisory firm or individual advisor you are evaluating – you can either ask them for a copy of the ADV, or you can search for the firm on the SEC’s website and download a copy of the ADV or information about the individual.

There are several ways you can assess whether a firm has a financial conflict of interest.  First, find out how they are paid.  A truly independent advisor is paid only by the client, without incentives or commissions paid by affiliates, money managers or other outside service providers. An advisor that does not receive money from sources other than the client minimizes or eliminates financial conflicts of interest with the client.  Such an advisor is much more likely to  provide advice because it is in the best interest of the family, not because they stand to receive a commission for selling a particular investment product.

The difference is independence. Family offices ideally are not affiliated with any bank, financial institution or asset manager. The advice they provide is strictly objective and without the conflict of a sales mandate or a financial interest in selling particular financial products or services.  A wealth manager comes in many legal forms  – private bank, trust company, brokerage firm, family office, multi-family office, financial planner, etc.

No, you will not. While we insist on keeping your family involved in the critical decision-making around your wealth management, we also play a critical role in execution by handling administrative tasks and supporting you in the implementation of your specific wealth management mandate.

Because our advisory model is based on the premise that clients should be engaged in their wealth enterprise^®s, we do not take discretion over your assets.  We help you establish your wealth management priorities and objectives, and then execute on your behalf. You can be involved in the details of managing your wealth as much or as little as you like – but you keep the authority to make the critical decisions.

Discretionary management typically means that your advisor is authorized to act on your behalf regarding the execution of your wealth management mandate. Your advisor has the authority to make decisions regarding your investments, financial planning and wealth planning without receiving your explicit permission.  Often in these types of relationships, clients become passive participants and lose touch with the day-to-day management of their wealth.

We believe clients should be active participants, always engaged and constantly learning.  We are non-discretionary advisors to our clients because we want to help not only to manage their wealth, but to provide them with the knowledge they need to make critical decisions – now and in the future.

We are paid only by our clients.  Since each family is different, each wealth enterprise^® is unique – and as such, each family’s service is customized. Our preferred method of pricing is a flat fee that takes into account the specific nature of your wealth enterprise^® and the scope of services you need from WE.

No. Our fee structure is simple: we are paid by our clients and only by them.  It’s transparent. Simple. We are not paid any commissions or incentives by any manager, service provider, or financial firm.  We do not charge ‘extra’ for this, or ‘more’ for that. You pay only the fee we agree to.

INTERNAL TALENT

WE Family Offices has deep internal investment talent with expertise and experience across a broad spectrum of investment areas of focus. With more than 170 years of combined investment experience, we provide you with the comfort of knowing we have the knowledge to help you to make critical decisions regarding your investments.

Our investment advisory services are anchored by these internal resources, including:

• Strategic Investment Committee
• Implementation Committee
• Manager Selection Process
• Investment Talent

Yes, we do. We create holistic financial plans to encompass all areas of your wealth enterprise^®, including wealth planning, investments, family governance, data aggregation, and financial planning – the plans we create for or clients are customized to address their needs, concerns and challenges.

Yes. Our experts on staff work with you and your family to create custom learning experiences that include family meetings to focus on critical components of wealth management including:

•  Family decision protocol
• Succession planning
• Wealth transfer
• Family governance structures
• Leadership roles and structures
• Next generation education

A critical component to any holistic wealth management plan is the insurance, tax and estate plan review.  Our experienced Wealth Planning Executive can work with your family’s trustees (corporate or individual) and estate and tax planning professionals to ensure they are fulfilling their role in a way that is consistent with your enterprise’s overall objectives.  We don’t provide legal or tax advice, but we will work with your estate and tax advisors, help you review what they are doing for your family, and make sure they are coordinated and are providing effective services at reasonable cost.

OUR REVIEW CAN INCLUDE ANY OR ALL OF THESE:

• Life Insurance Review
• Gift Planning
• Estate Planning
• Education Funding
• Estate Distribution
• Estate Tax Liability Review
• Generational Wealth Transfer Analysis
• Legal Entity Review

Communication strategy is an important part of any wealth enterprise^®.  While we cannot promise family harmony, we can promise to work with each and every family member to make sure they are able to voice concerns, express interests, discuss challenges and participate in planning for the future. This type of facilitated communication often leads to reduced conflict because your family members feel their voices have been heard and they’ve been included in the decision-making about your family’s wealth enterprise^®.

To help facilitate any challenge your family might be experiencing, in addition to our in-house experts, we work with leading providers to offer family governance and financial literacy support.

It depends. If you have a strategic project related to your overall wealth enterprise^® – yes.  Or if you need a diagnostic to help you understand the complexities of your existing wealth enterprise^® and provide suggestions on how to optimize it – yes.  However, we do not as a general matter provide “consulting services” and prefer families to engage us as their family office on a full-time retainer basis. Within this type of relationship, the scope of an engagement with us can be as broad or as narrow as makes sense for your family and can change over time as your family’s wealth enterprise^® changes.

If this solution does not work for you, we may be able to recommend you to a consultant, depending on the type of work your family may be looking for.

When it comes to communication between family members, nothing in wealth management is more critical – or complicated – than family governance.  We have experts on staff with decades of experience helping families navigate the multitude of challenges of a life with wealth. When working with your family, we consider:

VALUES AND MISSION STATEMENTS FOR THE FAMILY

• Family protocol
• Succession planning
• Financial education
• Facilitated family meetings
• Next generation education

IT’S NOT ABOUT US, IT’S ABOUT YOU.

Our investment advisory services are built around you. Our services are customized for your family and help you oversee and optimize your portfolio, reflecting the unique goals and objectives you have for your wealth, while balancing the risks and opportunities associated with the global capital markets.

Our Investment Advisory includes:

1. Investment Advisory Diagnostic
2. Tailored Wealth Enterprise^® Map & Investment Program
3. Strategic Investment Committee
4. Implementation Committee
5. Manager Research
6. Internal Talent and Client Support which includes:

• Asset Allocation
• Portfolio Construction
• Execution Support
• Review of Inbound Ideas

There is no need for you to change banks. As your advocate, we work with each of your service providers to be sure they are working toward your best interests. Through consolidated reporting, we review transactions, confirm pricing, review commissions, identify errors and see that what you agreed to pay is what you are being charged.

There is no need for you to leave your current financial service providers. Our mission is to enhance and optimize your wealth management by helping you to build your wealth enterprise^®. We understand that, at your level of wealth, you need a multitude of financial services providers, and that you find value in those relationships. We work with your financial services providers to make sure the services they are providing are in your best interests, and are priced appropriately

It’s not about us, it’s about you – we work with you and your family in the way it will benefit you the most.