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Doug Regan, EVP President The Wealth Management Group

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Presentation on theme: "Doug Regan, EVP President The Wealth Management Group"— Presentation transcript:

1 Serving The Complex Needs of Ultra-Affluent Families and Family Offices
Doug Regan, EVP President The Wealth Management Group Nancy Felton-Elkins, SVP Director of Fiduciary Services The Wealth Management Group


3 What Will We Do Today? What is The Wealth Management Group?
How are we serving the Ultra High-Net-Worth client? What may be changing?

4 The Wealth Management Group
Founded in 1982 285 highly trained professionals on staff Our relationship managers have 18 years average industry experience Wealth Management staff in Chicago, New York, Los Angeles and London $194 billion in assets under administration $30 billion in assets under management 64% of Wealth Management Group clients utilize a single family office which represent 85% of AUA We serve 22% of the Forbes 400 families Average client relationship size is $475 million Over 35 client relationships with $1 billion or more in Assets under Administration 410 family relationships, with clients located in 48 states and 15 countries Services offered: Global Asset Servicing and Reporting Investment Management Investment Consulting Performance Measurement and Risk Assessment Fiduciary Private Banking

5 Education Family Financial Forum Inspiring Human Capital
For Families and their Family Office Executives Pre-conference for Family Office Executives Inspiring Human Capital Exclusively for Family Members Learning and networking Defining values and passing them on to future generations Global Wealth Alliance Education for our largest clients’ Family Office Executives Client Advisory Board For the heads of Family Offices to network with each other and to aid in improving the overall quality of services we provide to our mutual clients ― the Family Financial Executives Group Networking Group for Family Office Financial Executives

6 Wealth Passport With a quarter-century of experience working with Family Offices, Northern Trust understands their complex structures and can deliver comprehensive, customized solutions. Wealth Passport’s secure environment empowers wealth owners and family offices to conduct business more efficiently, make strategic decisions and focus less time on administrative functions.

7 Acquirors vs. Inheritors
Acquired Transition in socio-economic class Identity is established partially or wholly prior to acquiring the wealth Acquiror’s Quandary Incorporating wealth into personal identity How much do I assimilate? Inherited Maintenance of socio-economic class Identity is tied up with wealth Inheritor’s Quandary Growing an identity out of a wealth environment

8 What is Making My Phone Ring?
What shall I tell my children about our wealth? How can I educate them about wealth? How can I stop them from feeling entitled to it? Is the client an acquiror or an inheritor? Acquiror: Concern that the next generation will have too much money Inheritor: Concern that the next generation will not have enough money-needs to work; entitlement

9 What is Making My Phone Ring?
Why would I NOT want Dynasty Trusts? Family Offices becoming investment companies or multifamily offices Family Offices becoming Private Trust Companies Aggressive tax strategies Investment performance requests for complex portfolios to review managers and consultants Partnerships or LLC’s to pool assets in smaller trusts

10 What is Making My Phone Ring?
Can I put my plane, yacht, ranch, art, etc. in a trust? Estates with staffs The ocean is coming over my seawall. Art Can I put the museum in a trust? Jewelry Timber Natural gas wells Yachts with crews This is the monthly for only ONE boat in Monaco? Airplanes Is this the gas bill?

11 What is Making My Phone Ring?
How many trees did you kill to produce this report? Challenges of Information Wealth Passport encourages customization and aggregation Some folks want it simple Electronic reporting, CD’s, or paper? Fear of computers Partnership accounting “I’ve been elected. What should I do?” Blind trusts

12 Where In the World Do I Go?
What states don’t have state “death” taxes? Should I avoid moving to a Community Property state? What does de-coupling mean? Will I pay more death taxes in the state I call home? What states don’t have state taxes? Where can I have a Dynasty Trust with no Rule Against Perpetuities? Should I have an Asset Protection Trust in Delaware? In Guernsey? I know some states have better laws for Special Needs Trusts. Which ones? If Northern Trust in Chicago is co-trustee with my attorney in California, will my Irrevocable Trust be taxed in California if I am not a California resident? Where is it best to establish a Private Trust Company (PTC)? We have a PTC but want Northern Trust for: Asset Servicing/Information Delivery / Global Assets Co-Trustee with powers limited to making discretionary distributions Consultant on investments, discretionary decisions, being a trustee Can I reform this trust in Illinois? Ohio? California? Delaware? Can I repatriate my Bahamian trust and what will it cost in taxes?

13 The Yale Syndrome Asset Allocation Challenges with Alternative Asset Classes

14 The Yale Syndrome Percentage recommendations of consultants and investment committees range from 25-80% Passive versus Active Investments Knowing the Trust and family objectives, goals for advisors, and risk tolerance: family meetings Need for pooling assets, LLC’s, layered entities, schematics Flight to safety in turbulent markets

15 The Yale Syndrome Lack of sophistication, need for education

16 What In the World Are You Doing?
Facilitating family meetings Working with multiple attorneys from several firms Reforming, remodeling or decanting trusts Clients willing to pay for strong attorneys and accountants Engagement letters Pooling assets Filing tax returns for the underlying interests Seeking discounts for pooled asset gifting

17 What In the World Are You Doing?
Retainers or pay as you go and expenses Bias to big law firms with global capabilities Global capabilities for international legal, trust and estate planning You wear many hats

18 What May Be Changing? EVERYTHING! Investment security The tax law
Strategies to unbundle fees New President and Congress in 2009 Global Issues AML for every country Next generation Issues Succession planning Philanthropy

19 Thank You Serving The Complex Needs of Ultra-Affluent Families and Family Offices

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