Family Office May Move To Consolidate

Federal regulations placing more restrictions on the operation of single-family offices is going to prompt more ultra-high-net-worth families to consolidate or restrict their offices, said Joe Calabrese, CEO of Harris myCFO.

The rule changes, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is only one of several factors currently affecting single-family and multifamily offices, he said.

Calabrese discussed the trends in the family office sector and the implications they have for wealthy families at the National Family Office Forum produced by World Research Group. Harris myCFO provides services to family offices, including investment advice, income tax planning and compliance, estate planning services, philanthropic advice, insurance evaluation, financial reporting and expense management.

"There will be a profound change for single-family offices because of the federal legislation that restricts investment advice to family members," Calabrese said.

Single-family offices will shed non-family members or outsource investment functions, he said. Another alternative is to keep the single-family office with non-family members, which will require registering with the SEC. Such registration may require the family to reveal what it considers private information, he said.

Another trend affecting wealthy families is the growing number of mergers and acquisitions of small businesses, he said. Many families that built their wealth from a family business are finding themselves merging with other businesses or being acquired by a larger business.

"One of the biggest sources of wealth is entrepreneurial wealth and mergers and acquisitions will mean there is substantial money to manage," Calabrese said. Families will have to deal with evaluating their businesses, adding value to businesses about to be sold, and dealing with issues before and after the sale, he said. They may well want to outsource many of these duties, he added.

Wealthy clients also are more demanding now because of the crisis in trust that the recent market problems and fraud cases have created. This means more scrutiny for the advisors and family office managers over the services they are providing, Calabrese said.

-Karen DeMasters


Campden Offers Global Membership

Campden Wealth is creating a global membership for ultra-high-net-worth private families in Europe, Asia and the Middle East so they can more easily connect with their peers around the world.

The new service is based on the model developed by the Institute for Private Investors (IPI) in the United States, which Campden acquired last year.

The Institute enables ultra-high-net-worth investors to network with each other and to share education and investing information.

The new service is being offered in Europe, Asia and the Middle East because of the increasingly global nature of the economy and of investing, said Campden.

IPI research shows 44% of IPI member families say they plan to increase their holdings in global equities in 2012. Campden's 2011 European Family Office survey showed 63% of family offices collaborated with other offices and the 2011 Asia Pacific Family Office survey showed more than half of those family offices co-invested with other offices.

Last year's IPI survey showed U.S. ultra-high-net-worth families invested nearly a third of their portfolio outside the U.S. and one fifth invested at least half of their overall portfolio internationally.

"Offering the comprehensive membership model on a global basis is based on requests by the families and is the next step in our evolution," said Campden CEO John Pettiifor. "Families still can opt for individual services, but the all-inclusive membership helps us serve families better internationally by facilitating the sharing and exchange of investment information and intelligence worldwide."

Mara Drummond has joined Campden as a director based in Zurich to spearhead the company's membership development internationally. Prior to working with Campden, Drummond founded her own Zurich-based consulting firm, Marta Drummond Strategic Consulting GmbH, to advise professional firms and families.

-Karen DeMasters


On The Move

BNY Mellon has hired Yolanda Plaza-Charres to the newly created position of sales director for Latin America. She will serve international wealth management clients in the region.  
Plaza-Charres brings 20 years of experience to BNY Mellon, most recently as director of BlackRock's private banking channel for the Americas region.   

-Kathy Lynch