by Don Kuhn
Recent studies show the “average” affluent investor relies on 3.6 advisors. Research goes further and explains that this is generally due to the fact that each of those advisors offers a specialty input to the investor’s overall wealth management. Still, it is probable that one of the advisors is a generalist attempting to coordinate the investor’s zone defense. Some of you have heard me describe FUTR Family Management as the “family office for the rest of us.” This means FUTR can act as that coordinator for your team. However, we have also established a unique risk management specialty practice. . .
This article will focus on our “family office” capabilities.
According to Investopedia :
“Family offices are private wealth management advisory firms that serve ultra-high net worth investors. Family offices are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individual or family. For example, many family offices offer budgeting, insurance, charitable giving, family-owned businesses, wealth transfer and tax services.”
The reason I describe FUTR as the “family office for the rest of us” is that many of the services provided by traditional family offices are offered to our clients, without the “ultra-rich” requirement. The FUTR platform allows an entrepreneurial management style where families are free to hire and fire various specialists, or advisors, at will.
Here is a sampling of some of those services benefitting our Families:
1. Reporting: FUTR has invested heavily in reporting software which enables us to report on all your assets, even if we are not the operating company, investment manager or banker. These reports are available to individuals of your choosing.
How this helps: Consistent reporting takes away the guessing game of family members and/or beneficiaries. Sometimes lack of information leads to misunderstandings and causes friction within the family; reporting helps keep information flowing and can serve as a conversation starter and lead to better understanding.
2. FUTR Family College: Every year, and even on a customized basis, FUTR brings families together to learn responsible family wealth governance. Our motto is “Wealth is more than money.”
How this helps: Topics are not all about money and focus on vision, unity, team-building, preservation, and growth. For instance, we had an expert in communication present a questionnaire to be used anonymously in order to find disconnects among family members; the results serve as a way to discuss difficult topics without putting anyone on the spot.
3. Coordinating Wealth Transfer and Lifestyle Cash Flows: FUTR helps clients maintain their lifestyle today, while enabling each successive generation to pursue their dreams in the future.
How this helps: Wealth transfer plans are often put on hold because of fear. This inaction may be due to fear of outlining ones assets. Another fear may be that the kids are not ready to maintain the business. Still another concern may be loss of control. But by coordinating the wealth transfer and lifestyle desires, FUTR is able to offer a proactive solution which benefits everyone instead of dealing with the situation on a reactive basis.
4. Philanthropic Advising: Helping families and institutions define their legacies by investing in their Community.
How this helps: FUTR is an active philanthropist in its own right and has developed giving strategies which maximize impact and minimize (or eliminate) lifestyle cutbacks. We also have the resources to research charities.
5. Risk Management: Fee-based solution creating a fixed income alternative investment featuring wealth replacement for taxes and family philanthropies.
How this helps: We are able to offer insurance products on a fee basis instead of commission basis. We view life insurance as an alternative investment as well as a risk management tool. Finally, insurance can be used to increase philanthropic impact for a reduced amount of cost.
6. Investment Management: Tailored solutions offered on a fully-transparent investment platform.
How this helps: We offer fee only investment advice where all fees are disclosed in advance — no surprises here.
7. Fiduciary Standard: We operate under the fiduciary standard instead of the suitability standard.
How this helps: A fiduciary must operate in the best interests of the client — just like family should. The suitability standard applied to all brokers only requires that decisions meet a minimum standard (i.e., Doesn’t have to be the best, just “good enough”).