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, EVPPresident The Wealth Management GroupNancy Felton-Elkins, SVPDirector of Fiduciary ServicesThe 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 1982285 highly trained professionals on staffOur relationship managers have 18 years average industry experienceWealth Management staff in Chicago, New York, Los Angeles and London$194 billion in assets under administration$30 billion in assets under management64% of Wealth Management Group clients utilize a single family office which represent 85% of AUAWe serve 22% of the Forbes 400 familiesAverage client relationship size is $475 millionOver 35 client relationships with $1 billion or more in Assets under Administration410 family relationships, with clients located in 48 states and 15 countriesServices offered:Global Asset Servicing and ReportingInvestment ManagementInvestment ConsultingPerformance Measurement and Risk AssessmentFiduciaryPrivate Banking
5 Education Family Financial Forum Inspiring Human Capital For Families and their Family Office ExecutivesPre-conference for Family Office ExecutivesInspiring Human CapitalExclusively for Family MembersLearning and networkingDefining values and passing them on to future generationsGlobal Wealth AllianceEducation for our largest clients’ Family Office ExecutivesClient Advisory BoardFor 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 FamilyFinancial Executives GroupNetworking Group for Family Office Financial Executives
6 Wealth PassportWith 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 AcquiredTransition in socio-economic classIdentity is established partially or wholly prior to acquiring the wealthAcquiror’s QuandaryIncorporating wealth into personal identityHow much do I assimilate?InheritedMaintenance of socio-economic classIdentity is tied up with wealthInheritor’s QuandaryGrowing 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 moneyInheritor: 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 officesFamily Offices becoming Private Trust CompaniesAggressive tax strategiesInvestment performance requests for complex portfolios to review managers and consultantsPartnerships 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 staffsThe ocean is coming over my seawall.ArtCan I put the museum in a trust?JewelryTimberNatural gas wellsYachts with crewsThis is the monthly for only ONE boat in Monaco?AirplanesIs this the gas bill?
11 What is Making My Phone Ring? How many trees did you kill to produce this report?Challenges of InformationWealth Passport encourages customization and aggregationSome folks want it simpleElectronic reporting, CD’s, or paper?Fear of computersPartnership 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 AssetsCo-Trustee with powers limited to making discretionary distributionsConsultant on investments, discretionary decisions, being a trusteeCan 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 SyndromeAsset Allocation Challenges with Alternative Asset Classes
14 The Yale SyndromePercentage recommendations of consultants and investment committees range from 25-80%Passive versus Active InvestmentsKnowing the Trust and family objectives, goals for advisors, and risk tolerance: family meetingsNeed for pooling assets, LLC’s, layered entities, schematicsFlight to safety in turbulent markets
15 The Yale SyndromeLack of sophistication, need for education
16 What In the World Are You Doing? Facilitating family meetingsWorking with multiple attorneys from several firmsReforming, remodeling or decanting trustsClients willing to pay for strong attorneys and accountantsEngagement lettersPooling assetsFiling tax returns for the underlying interestsSeeking discounts for pooled asset gifting
17 What In the World Are You Doing? Retainers or pay as you go and expensesBias to big law firms with global capabilitiesGlobal capabilities for international legal, trust and estate planningYou wear many hats
18 What May Be Changing? EVERYTHING! Investment security The tax law Strategies to unbundle feesNew President and Congress in 2009Global IssuesAML for every countryNext generation IssuesSuccession planningPhilanthropy
19 Thank YouServing The Complex Needs of Ultra-Affluent Families and Family Offices