By Mark Barnicutt on May 22, 2015
You’ve worked hard to create your family’s wealth. You want it to be well managed and sustainable for future generations.
Unfortunately, as we mentioned in a previous post, family wealth is not self-perpetuating. Without proper planning, it often erodes within just two to three generations.
You Need Effective Investment Management
The investments of affluent families aren’t simply pools of capital. They’re actually asset management businesses. Your assets must be managed effectively to ensure you will be able to continue to fund your lifestyle and your goals – and to ensure that you don’t run out of money and have to build your wealth twice!
When you start thinking about your investments as an asset management business instead of a pool of capital, you will see that employing disparate professionals to offer disconnected advice is an approach that will leave you with serious planning gaps. If each of your professional advisors is operating in a silo, you will never have an integrated asset management plan that takes all angles into account.
It is for the purpose of integrating professional advice that family offices were created. However, single family offices, multiple family offices, and commercial family offices all present significant disadvantages.
For example, single family offices are incredibly expensive and difficult to maintain. Meanwhile, multiple and commercial family offices face conflicting objectives and resource limitations for each family client.
At HighView, we weren’t satisfied with any of these options.
A New Model: The Virtual Family Office
The Virtual Family Office (VFO) is the best of all worlds. Typically for families with a net worth in excess of $10 Million, the VFO is integrated, holistic, and has only your family’s interests at heart – while remaining affordable, flexible, and easy for your family to manage.
The VFO consists of all a family’s existing professional advisors; however, instead of being in siloes, these professionals work together to create a seamless approach, facilitated through well-defined governance, structure, and process.
Benefits of the VFO:
- Infinite access to the right professionals (no gatekeepers)
- Harness the experience and competencies of your existing, proven professionals
- Variable cost model
- Client does not need to integrate advice
- Focused on client (objective advice)
- Eliminates planning gaps
- Qualitative rather than quantitative
The Stewardship Charter
Each Virtual Family Office must create a representative form of family wealth governance that ensures the family is diligently pursuing its aspirations while living within its defined family cultural attributes.
When designing your Virtual Family Office, your family must determine: who you are, what you value, and what you want. The VFO design and governance structure must then align with your family’s defined aspirations and values.
A high net worth family can successfully preserve wealth far beyond two to three generations if the system of representative governance it creates and practices is founded on the family’s shared goals and values.
A VFO provides affluent families with a network of trusted professionals who work together to safeguard their wealth now and into the future.
>> HighView takes the VFO approach in the creation of your Family Stewardship Council. We invite you to schedule a complimentary discovery session to get to know us and see if we’re the right team for your family.
You may also be interested in:
- How to Build Sustainable Family Wealth for Future Generations (and Why It’s So Difficult to Do)
- Why Engage The Services Of An Investment Fiduciary?
- Beware of aggressive investment product marketing
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- HighView Family Story: Retirement Plans Uncover Unclear Fee Disclosure by Investment Advisor - August 3, 2018
- The Client Dangers of Proprietary Investment Product Overload - March 28, 2018
- 7 Common Hurdles in Creating Sustainable Wealth - February 28, 2018
- Understanding Your Family Office Options - January 23, 2018
- Happy Holidays to Our Valued Clients and Their Families - December 17, 2017
- Why Do I Need an Investment “Fiduciary”? - October 17, 2017
- Dan Hallett of HighView to Be a Panelist in OSC Roundtable on Discontinuing Embedded Commissions - August 24, 2017
- What the 2017 Federal Budget Means for High Net Worth Canadians - March 28, 2017
- What Is Wealth Stewardship? - March 15, 2017