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NOTE: Members of FOX receive active hyperlinks to the documents
referenced in FOXConnects. The hyperlinks in this sample edition have been de-activated. Intellectual Capital For The Wealth Management Community July HeadlinesIndustry Trends Issues
Integrated Planning Managing Risk Liability Exposure International Trends Business Owner Issues Family Continuity & Governance Strategic Philanthropy Technology Trends Family Education Family Office Exchange Industry Trends & IssuesWorld Wealth Report
Global Fund Manager SurveyMerrill Lynch's conducts a monthly survey of sentiment among institutional fund managers around the world. Its May survey is noteworthy, as it captures a snapshot of attitudes in the industry immediately prior to the global sell off in equities. Three key concerns are identified: how growth can surprise positively over the next 12 months; growing concerns over inflation; and fears that global monetary policy remains overly stimulative.
WPR interviewThe Wealth Partnership Review, a wealth management journal, published an interview with Olivier de Givenchy, Head of JPMorgan Bank UK. Olivier describes JPMorgan's approach to the top end of the private banking market, encompassing the bank's approach to open architecture; the importance it places on wealth structuring; and the need to co-ordinate private banking and investment banking offerings. Olivier also offers insights into competitive intensity in the ultra-HNW space, as well as the dynamics of family office creation among wealthy families.
Business Continuity Management - Best Practice for Hedge FundsAs investors increasingly make use of hedge funds, a paper by the AIMA offers practical encouragement to all participants to build, test and review their contingency plans. The aim is to ensure continued smooth operations under exceptional circumstances - crucially for hedge funds, major incidents in financial centres are often accompanied by big market moves, increasing the need to continue to trade.
Investment PlanningThe Benefits of Active Cash ManagementCash has traditionally been perceived as a low risk / low return asset class, often something of an afterthought in the portfolio strategies of many investors. A paper by JPMorgan Private Bank argues that cash can have a more significant role to play in an environment of a flat yield curve and unsettled markets, describing the value active management of a diversified cash portfolio can add to overall returns. Written from a US perspective, but with arguments of generic interest to all investors.
Investing in Oil GasRare is the investment portfolio that does not have at least an indirect connection to the oil and gas sector, given that all companies consume energy. A focused investment approach to energy can, according to Greycourt, increase returns by acting as a hedge against the impact on a portfolio of rising oil prices. In a recent white paper, Greycourt discusses a number of practical ways in which to invest in energy.
Integrated PlanningTwo Views on Art as an Asset ClassFOX interviews Randall Willette, founder of Fine Art Wealth Management, to gain his view on the emergence of art funds, which treat art as an alternative asset class. Pointing to evidence of low risk-return ratios and negative correlations to other asset classes, Randall discusses why - and how - investors should look to integrate art into their overall wealth management strategies.
An academic paper published by James Pesando and Pauline Shum examines the long-term risk and return of investing in modern prints. Using data from 1979 to 2003, the authors find that, contrary to findings relating to the earlier post-war period, the real return on a portfolio of modern prints averaged just 1.22% (less than the real return on US treasury bills). They also note similar findings in relation to other segments of the art market.
Managing Risk & Liability ExposureWhy We Need to "Love Risk"Risk in investment is something that many of us believe should be avoided. An article by Bloomsbury seeks to dispel this idea and to suggest that risk, far from being a bad thing, is something that investors should embrace. According to Bloomsbury: "..with risk comes reward, and by avoiding some common pitfalls, we believe investors can learn to love risk". The article is illustrated with a number of quotes, as well as practical suggestions for the prudent investor.
Life Insurance - Our Top Ten MistakesThe Insurance Design Center has produced a short paper illustrating common mistakes made by people with their life insurance. These include accepting a standard policy, delaying purchasing coverage in a rising cost environment, and allowing trustees to ignore their insurance as an asset. Written from a US perspective, but with some useful generic lessons.
International TrendsJapan Emergent: Is it Time to Invest?The Japanese economy appears to be emerging from years of recession. Is now a good time to invest in the world's second largest equity market behind the US? According to a report by Ashbridge, solid earnings growth prospects and reasonable valuations support building a higher allocation to Japanese equities over time. Its paper supports the investment rationale with a discussion of the history of Japanese markets; demographics; risk; and catalysts for expansion.
The Investment Outlook For BrazilWhile the leading economic power in South America, Brazil is perhaps the least prominent of the BRIC countries in investor's minds. Deutsche Bank Private Wealth Management has produced a short paper examining its investment outlook. It recommends that Brazil occupies a place in any well-diversified emerging market portfolio.
The World Cup and EconomicsTo accompany the recent World Cup Finals, Goldman Sachs produced a light-hearted report intertwining soccer and economics. Along with contributions from sporting and political luminaries, it offers an economic overview of the countries that took part in the Finals, and ponders the links between soccer and economic performance. And in a cautionary tale relating to statistical predictions, it forecast Brazil as most likely to win (model probability 12.4%)!
Business Owner IssuesFamily Business AwardsThe national winners of the Coutts 2005 Prize for Family Business have been announced. In three turnover categories (in increasing size), they were Butcher M Newitt & Sons; hotel operator English Lakes Hotels; and recruitment agency Pertemps. A special prize for philanthropy was won by Pollards Tea & Coffee.
Family Continuity & GovernancePlanning For Family Business SuccessionAccording to Holland & Knight, transfer of ownership and control of a closely-held family business can lead to a clash between three sets of values: business, owner and family. In a paper published in its quarterly review, it recommends solutions - in the form of objectivity over any prescribed business structure. Mutual values and culture provide the bedrock. Also includes other articles looking at family succession issues, some with a US technical orientation.
Strategic PhilanthropyDonors as Learning OrganisationsAccording to an article published by Allavida, improvement through reflection and learning is often absent from the processes of donor agencies. It identifies three features of a learning organisation - conscious of self; centred; open to its "emergent self" - and discusses how donor organisations can develop a "space for learning".
Key Themes in UK PhilanthropyA special summer supplement from Philanthropy UK offers an in-depth report on charitable giving by young people, as well as a critical examination of tax-effective giving in the UK.
Technology TrendsReport Foresees Technology Trends With Global ImpactWhat are the technology trends that will be affecting all our lives by 2020? The RAND Corporation recently prepared a report for the US National Intelligence Council, seeking to identify technologies and applications - including biotechnology, nanotechnology, materials technology and information technology - that have the potential for "significant and dominant global impacts" within 15 years.
Family EducationConsidering the Impact of Affluence on Children"The best thing to spend on your children is time". With many wealthy families concerned about possible distortionary effects of large inheritances, The Calibre Papers revisits its suggestions on how to raise healthy children amid affluence. It offers thoughts on how to educate children about life, seizing opportunities in daily life to prepare children for responsible living.
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