This page contains a Flash digital edition of a book.
THE STRUCTURE


Establishing the


Family Wealth Solution: the Family Office


Scott A J MacDonald and Mark Voumard provide a blueprint for ultra high net worth clients looking to implement family wealth solutions, and present an overview of the steps in the process.


W Scott A J MacDonald


e at the International Family Office Association (IFOA) believe clients of bespoke services must address a range of questions before embarking along


the path of ‘Family Wealth/Office’ establishment. The main issues we need to discuss can be summarised as the ‘Three Pillars’: Family Strategy and Constitution; Business/Investment Strategy and Management; and Compliance Strategy and Governance. Family Office Services, the consulting arm of the


IFOA, carries out this work on an invitation-only basis once a potential client commits to the client-servant agreement on a strictly confidential basis. We then begin with a discussion about the following


issues. However, for the purposes of this paper, let us get right to the detail of what a Family Wealth/Office strategy must consider. First the choice of jurisdiction and structure of a


fund is dependent upon issues that each family must consider, and typically include a desire for anonymity, neutrality, security, transparency, flexibility and control. These are discussed below. In addition, the process must be more efficient


and cost-effective than the current options available through more traditional service providers.


What are Families looking for? There is a growing need for a bespoke, cost-effective and efficient service for creating fund vehicles suited to families and Ultra High Net Worth Individuals (UHNWIs). Many families have a need for an independent fund


Mark Voumard


but for various reasons do not wish to allocate the necessary resources to create the infrastructure and operate the fund on a daily basis.


40 FAMILY OFFICE: THE FUTURE


One solution involves the use of an outsourced


fund platform. This allows individuals and families to implement their own investment strategies but to do so in a manner which outsources the establishment and operation of such vehicles. The platform acts as the Investment Manager of the fund.


Fund platform An independent fund platform will work with the ultimate beneficiaries and their advisors to provide them with structures to access and execute the investment strategy of their choice in an efficient fashion. The fund platform should have a number of


pre-existing relationships with a wide array of professional service providers resulting in timely and cost effective structuring for the families. The platform must have experienced investment,


operational and risk control teams to monitor the investment guidelines set by the fund’s beneficiary and to oversee the daily operations. The fund platform takes on the business


responsibility of operating and managing the fund as well as the fiduciary responsibility. End investors enjoy a high level of corporate governance, full transparency and strong cash controls. Each fund should be organised as an independent entity, eliminating direct cross liability with any other fund on the fund platform.


Families require ... Anonymity: Families and UHNWIs want to maintain a high degree of anonymity for reasons of both confidentiality and personal safety. Acting within standard multijurisdictional Know Your customer (KYC) and Anti Money Laundering (AML) guidelines, an independent


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112