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February Headlines
Family Continuity and Governance
Industry Trends and Issues
Integrated Planning
Investment Planning
Lifestyle
Risk Management
Strategic Philanthropy
Family Continuity and Governance
Resolving Conflict with Private Mediation
Issues between family members can create conflicts that never get resolved. That can create rifts in the family and prevent it from moving forward with a unified vision. This article from Handler, Thayer & Duggan discusses how private mediation can help family members reach a solution that works for both sides.
Industry Trends and Issues
A Closer Look at the Knight Decision
By limiting the deductibility of investment-managing expenses by trusts, the Supreme Court’s decision in the Knight case increases the taxes on trusts that use professional investment managers. This article by Richard LeVine of Withers Bergman examines the ruling and notes the need for innovative relationships between trusts and assets managers to improve tax outcomes.
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Emerging East Asian Economies More Resilient
Thanks to strong economic growth and improved financial systems, emerging East Asian economies are more resilient in the face of market turbulence. This comes from a report by the Asian Development Bank, which examines the markets, assesses remaining risks and recommends shortcomings to address in the region’s debt markets.
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Credit Crisis and Municipal Markets
Municipal bonds have traditionally been safe, tax-favored investments, but concerns about bond issuers’ claims ability had called that into question. This white paper from Asset Preservation Advisors explores the credit crisis and concludes that while a handful of insurers could temporarily lose their AAA ratings, the long-term impact on the municipal market should be minimal.
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Family Offices Allocating More to Private Equity
Family offices have been increasing their allocations to private equity, a trend that’s likely to continue according to a study by European Venture Capital and Private Equity Association. The report also found a strong preference for investing in buyout funds and evidence that the number of family offices will increase as more company owners retire.
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U.S. Investments in German Companies Increase
German companies are shifting to overseas ownership – with the largest group of foreign investors coming from the United States. That’s according to a report from Dresdner Kleinwort, a German investment banking firm. U.S. investors owned almost 18 percent of German equities by 2007, up from only 2 percent in 2001, according to the report.
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Gen X Investors Take Aggressive Approach
Affluent Gen X households have markedly different attitudes about finances than other affluent families, investing more aggressively and owning more managed future funds, exchange-traded funds and socially responsible funds. This is according to Northern Trust’s annual Wealth in America study, which examines topics for all age groups, such as asset allocation, investment strategy, philanthropy and retirement.
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Integrated Planning
Choosing the Ownership Option for Private Trusts
Private trust companies can protect and enhance a family’s wealth, but the ownership options need to be weighed carefully. In this article, Michael Stanford-Tuck of Bermuda-based Appleby Global discusses such choices as the non-charitable purpose trust, the Cayman Islands’ STAR trust and the British Virgin Islands’ VISTA trust.
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Investment Planning
Think Globally, Act Locally
Taking a global approach to equity investing makes sense, but using global equity managers to implement this approach can be problematic, says a white paper from Greycourt & Co. The paper examines the concept and argues for a middle ground between true global investing and a more localized approach.
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Making Life Settlement Transactions Work
Life settlement transactions, in which unneeded life insurance policies are sold to a third party, can be valuable planning tools. This report from Life Settlement Insights defines the components in the process of a transaction, focusing particularly on pre-qualifying cases, compiling necessary information and soliciting competitive bids for a policy.
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The Growing Microfinance Investment Market
Microfinance may be an attractive, emerging investment opportunity for private investors, according to a report by Deutsche Bank. Researchers found that the volume of microfinance loans grew from $4 billion in 2001 to about $25 billion in 2006. The study expects microfinance to evolve into a niche investment product with individual and institutional investments reaching $20 billion by 2015.
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REITs Continue to Find a Place in Portfolios
Most independent financial advisors continue to reserve a place in client portfolios for real estate investment trusts, despite turbulence across stock markets and in the property sector. This comes from a study by Reita of more than 240 U.K.-based financial advisors. The researchers found that 34 percent of IFAs showed increased preference for global funds and concern about U.K. property investment.
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Lifestyle Management
Wealthy Business Owners Want to Work
Affluent business owners often are eager to continue working – but typically fail to prepare adequate succession plans, according to PNC Wealth Management’s 2008 Wealth and Values survey. Among those surveyed, 43 percent want to work until age 70 or later, a rate twice as high as that for wealthy who don’t own businesses. But only one-third of wealthy owners have written succession plans in place.
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In Search of High-Quality, Time-Saving Services
The wealthy are changing the luxury industry as they look for services to save time and make their lives easier. That’s a conclusion by Barclays Wealth in a report titled “The True Value of Wealth.” Two-thirds of the respondents said wealth has given them more time but also more stress. Many plan to use more time-saving services, such as private jets, personal shoppers and at-home fitness trainers.
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Risk Management
Limiting Directed Trustees’ Liability
A directed trustee is chosen to advise a trustee on investment or distribution decisions for a trust. But as key decision-makers, directed trustees face potential liability. This article by Richard Nenno of Wilmington Trust Corp. explores the role of directed trustees, examines statutes and case law and looks at how these trustees can limit their liability risk.
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Sneak Attacks from Unexpected Sources
China has become a prime source of malicious computer activity, according to Finjan, a California-based provider of Web security solutions. In its December monthly report, Finjan shows the network of connections between Chinese-based servers and how hackers use it to launch spyware attacks from legitimate, even government, Web sites in Western countries. The report also details how the attacks work – and what real-time action can be taken against them.
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Protecting Offshore Finances
U.K. citizens who are retirees living abroad or overseas workers face the dilemma of staying with a bank back home or shifting to a local financial institution. This article by Abbey National for EUBankers.net considers the pros and cons. It also offers suggestions for how to protect against identity theft while living abroad.
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Strategic Philanthropy
Giving with a Tax Advantage
Donating appreciated securities to charities may provide tax advantages over making cash donations by reducing capital gains taxes. This report from Fidelity Investments explores the issue, providing assistance in calculating tax savings and explaining how a donor advised fund can reduce paperwork to make these donations easier.
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Collaborating with Social Entrepreneurs
Social entrepreneurship cuts across disciplines to tackle social, economic and political issues and create sustainable change for the greater good. This issue of Global Giving Matters takes an in-depth look at this approach, reporting on the challenges that social engineers face and the opportunities for philanthropists to move the field forward.
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Seeking Advice on Giving
Wealthy families struggle to find advice needed to launch a philanthropic foundation or to select charities to which to donate, according to a survey of wealthy individuals and family offices in Europe by U.K.-based New Philanthropy Capital. Other challenges include finding ways to network with other donors and measuring the success of donations.
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