November Headlines
Family Continuity and Governance
Family Education
Family Office Exchange News
Industry Trends
Investment Planning
Real Estate
Strategic Philanthropy
Taxation
Technology Trends
Family Continuity and Governance
Coping Proactively with Family Realities
Complex extended families, generational differences, challenging economics and leadership issues are some of the challenges addressed in this article from RayLign Advisory. The author cites the need for family leadership to be proactive in dealing with the seven key realities he describes.
A Fortune with Strings Attached
An inherited fortune may come with strings attached as wealthy families make a college education or job experience a condition of inheritance. About 60 percent of families with more than $10 million in assets place stipulations like these, according to a report on attaining and retaining wealth from Barclays Wealth. The report also discusses the importance of family members agreeing on how wealth will be passed on.
Family Education
Domestic Staff: From Hiring to Firing
Hiring domestic staff can mean dealing with a shortage of qualified candidates, increased regulations, security and privacy risks, and exposure to litigation and liability. In this white paper, HUB International Personal Insurance offers simple, practical steps for families who need to hire, retain and terminate staff.
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Principles of Wealth for Long-Term Success
As an heir to the Carnation fortune and a financial adviser, Stuart Lucas is an experienced wealth manager. In this article from Knowledge@Wharton, he offers the eight principles of strategic wealth management that he says are at the heart of every decision he makes.
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Time to Update the Will?
Almost one in three British adults have not updated their wills for at least five years, despite soaring housing prices and a rising stock market, according to a study by portfolio managers Brewin Dolphin Ltd. In addition to increasing assets, the study warns, family circumstances, such as births, marriages and deaths, can also make wills obsolete.
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Applying Economics to Healthcare Risk
Consumers define risk differently than medical and insurance experts do, and that can lead to less than optimal medical decisions and faulty policy making. Wharton professor Mark Pauley suggests applying an economic model called expected utility maximization. This article from Knowledge@Wharton looks at how that model can help consumers make better medical care decisions.
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Family Office Exchange News
Private Wealth Management Program Set
FOX once again is teaming with the University of Chicago Graduate School of Business to present Private Wealth Management for High Net Worth Individuals and Families. This exclusive program, scheduled for
December 3-6, takes an integrated and strategic approach to wealth management, weaving together issues of family, investment, tax, estate planning and philanthropy.
- Visit the FOX site for more inforrmation.
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Special Zoologic Pricing Ends Soon
Only a few weeks remain for FOX members to take advantage of a special educational partnership with SS&C Zoologic Learning Solutions that provides access to more than 660 hours of online courses in disciplines including accounting, trusts and investments, compliance, risk management and leadership. The Zoologic discount, available only to FOX members, expires on Dec. 31.
- Visit the FOX site for more inforrmation.
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Industry Trends
Asia at Highest Risk for Money Laundering
Asia has experienced the greatest increase in money laundering risk, according to a survey by Fortent of senior compliance officers at financial institutions. Respondents identified private banking and electronic cash systems as areas to watch for increased crime.
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Choosing the Best U.S. Convergence Option
By tightening reporting and accounting procedures, the Sarbanes-Oxley Act has created obstacles for foreign firms that want to cross-list in the United States as a convergence option. Researchers from the University of Arkansas examine convergence patterns and suggest the best option – cross-listing or acquisition by a U.S. firm – for various types of foreign firms.
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Closing the Gap in Financial Markets
European activity has substantially outstripped U.S. activity for the past five years in key financial markets, including commercial and international banking, according to IFSL Research’s 2007 report on financial market trends in Europe and the United States. Europe’s biggest improvement has come in initial public offerings, hedge funds and private equity funds raised.
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Rapid Growth for Emerging Global Markets
Investments in emerging global markets are expected to grow quickly, and exchange traded funds may provide one of the best ways to invest in these markets. That’s according to investment professionals speaking at a conference organized by Lyxor Asset Management. One prediction was that emerging markets will account for one-third of world markets by 2017.
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China Gaining as Major Player in Global Wealth
Look for China’s wealth market to grow faster over the next five years than that in any other country, according to a study by the Boston Consulting Group. The report predicts an annual growth rate of 17.4 percent for China during that period, far above the anticipated 5.6 percent annual rate expected for global wealth.
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Investment Planning
Investing Wisely in Commodities
The effort to analyze commodity-linked investments and make the necessary distinctions among them has trailed far behind the product development cycle and accompanying marketing push. This paper from DTB Capital can help investors understand each product’s role in the marketplace and determine whether it fits within a given set of investment objectives.
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A Move from Market-Driven Investments
Wealthy investors are forsaking market-driven equities and bonds for such alternative investments as hedge funds and private equity that promise greater absolute returns. That’s according to a report called Barclays Wealth Insights: Risk, Return and Reward. The global report examines how wealthy individuals generate, maintain and pass on their wealth.
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The Next Phase for Emerging Markets
The growth of local currency debt markets offers investors new opportunities to potentially benefit from the structural improvements occurring in the world’s emerging market. A PIMCO portfolio manager explains why the local debt and currencies of emerging markets are among the most attractive investments for global fixed-income investors.
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Fund of Hedge Funds Portfolio Optimization Using the Omega Ratio
Because it captures skew and kurtosis in addition to the more commonly measured standard deviation, the omega ratio allows for a more robust optimization of the risks and returns of investing in hedge funds than does the more widely used Sharpe ratio, Fortigent researchers claim.
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The Search for Alpha in Hedge Funds
Despite investors’ concerns that newer hedge funds have significantly high attrition rates, a MayerCap study of funds launched in 2003 and 2004 indicates there is a “sweet spot” investing in fund managers with $30 million to $250 million in assets under management.
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Multi-Strategy Funds vs. Funds of Funds
A research paper from Fortigent examines the strengths and weaknesses of both multi-strategy funds and funds of funds and, in the end, concludes neither type of investment has a distinct advantage over the other.
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20/20 Hindsight on Pre-IPO Investing
Does investing in a pre-IPO outweigh the risks? It can, based on a look at Bessemer Venture Partners’ “anti-portfolio.” The author of this EU Banking News Network article explains why BVP passed on later winners, including eBay, FedEx and Intel, and offers tips for private investors.
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Real Estate
Analyzing the Risk Beyond Core
European real estate investors are reaching out from direct private investment in core stabilized assets. In this article, JP Morgan explains a mean-variance optimization tool that investors can use to analyze the risk of buying outside Europe or in the public markets.
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Crystal Ball on UK Property Investment
Property investment has shown strong gains over the past five years in the UK, but the pace is now slowing. In this release, the Association of Investment Companies shares input from property investment fund managers on where this sector seems to be headed.
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Riding the Real Estate Roller Coaster
Non-traditional mortgage lenders are exiting the market, and the subprime crisis is making headlines. Where do we go from here? Wachovia Capital Markets provides perspective and recommendations in its report, "Investing in the Changing Face of Real Estate". Beyond the residential and commercial real estate markets, Wachovia explores the subprime crisis, private equity and emerging markets in India and China.
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Strategic Philanthropy
Green Philanthropy
Only 5 percent of private donors in the United Kingdom give to environmental causes, but interest is rising. An extensive report from New Philanthropy Capital examines specific environmental problems and challenges, suggests charitable approaches and offers a guide for donors and funders.
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Five Paths to Making a Difference
No one road to philanthropy offers the best approach. Foundation Source considers the strengths of five different paths that foundations take: checkbook philanthropy, responsive funding, venture philanthropy, results-sustained philanthropy and collaborative funding.
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Taxation
Keep Careful Lifetime Gift Records
Her Majesty’s Revenue and Customs will be watching more carefully for lifetime transfers, or gifts, on IHT200 estate forms until April 2008, according to the British agency’s IHT & Trusts newsletter. An item in the newsletter notes the need for British citizens to track transfers, including outright gifts of cash, forgiveness of debts and gifts to certain types of trusts.
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Technology Trends
UK Cyber-Crime Zooms Upward
Financial cyber-crime is on the rise in the UK, up 32 percent in 2006 from a year earlier and expected to continue zooming upward, according to a report by Garlik, an IT security consulting firm. This report offers data and commentary on identity fraud-theft, financial fraud, offenses against individuals, computer misuse and sexual offenses related to the Internet.
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Trust No One on the Internet
Online criminals are working through legitimate sites to place spyware or other malicious programs on the computers of ordinary users, according to Trends in Badware 2007, a report by StopBadware. Criminals can access users’ private information through links and software placed on these sites. The report outlines current practices, lists compromised sites and offers security suggestions.
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