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Family Wealth Management: Seven Imperatives for Successful Investing in the New World Order

Family Wealth Management: Seven Imperatives for Successful Investing in the New World Order

Mark Haynes Daniell, Tom McCullough

ISBN: 978-1-118-63780-7

Aug 2013

480 pages

Description

Introducing a fresh perspective on wealth management, with proven solutions to the challenges of preserving wealth and investing well in turbulent times

Family Wealth Management is coauthored by two experts in the field of private wealth - one, a former director of Bain & Company and the chairman of two of the world's largest family trusts, and the other, a CEO of a leading global family office and professor of finance from University of Toronto. The book introduces you to a unique model of wealth management that produces the desired return outcomes while being consistent with a family's overarching goals and values. The approach combines the best traditional investment and portfolio management practices with innovative new approaches designed to successfully navigate through economic climates both fair and foul. While the authors address  the critical "hard" issues of asset management, they also emphasize important "soft" issues of working with families to ensure that actions are congruent with objectives, in alignment with family governance principles and designed to help sustain and grow family wealth over multiple generations. 

The authors provide clear guidance on how to master each component. 

  • How to establish  clear family vision, values, and goals as a critical foundation to a sound wealth management strategy
  • How to establish a practical, integrated investment framework that will ensure a consistent, disciplined approach in all environments
  • How to set a long-term family wealth strategy and define an asset allocation model that will produce the desired results
  • How to draft an annual investment policy statement and refine the investment tactics based on capital markets trends and changes in the family’s circumstance
  • How to effectively monitor performance and respond to the need for change
  • How to carefully select and manage an ecosystem of experienced, trusted financial advisors who will provide critical guidance through challenging period ahead
  • How to successfully engage and educate the family to preserve and enhance the family’s financial wealth and human capital over the generations

Foreword xi

Preface xvii

Acknowledgments xxix

INTRODUCTION AND OVERVIEW: A CRITICAL TIME FOR FAMILY INVESTORS 1

Chapter 1 Setting Out a New Approach to Family Wealth Management 3

Chapter 2 Arriving at a Point of Inflection in the History of Family Wealth 23

Chapter 3 Addressing the Differences between Private and Institutional Investing 45

Chapter 4 Reinforcing the Importance of a Disciplined Investment Process 57

THE SEVEN IMPERATIVES 71

IMPERATIVE 1 ESTABLISH FAMILY VISION, VALUES, AND GOALS 73

Chapter 5 Documenting Family Philosophy, Vision, and Values 75

Chapter 6 Determining the Purpose of Wealth and Setting High-Level Financial Goals 89

Chapter 7 Structuring Assets and Aligning Investments to Serve Multiple Purposes 105

Chapter 8 Integrating the Family Business into Wealth Management Strategy 119

IMPERATIVE 2 SET A PRACTICAL FRAMEWORK FOR FAMILY INVESTMENT 133

Chapter 9 Rethinking Modern Portfolio Theory, Considering Goals-Based Wealth Management 135

Chapter 10 Reviewing Different Approaches to Asset Allocation 149

Chapter 11 Comprehensive Risk Management 165

IMPERATIVE 3 SET A LONG-TERM FAMILY WEALTH STRATEGY AND DEFINE THE ASSET ALLOCATION MODEL 185

Chapter 12 The Elements of Long-Term Strategy 187

Chapter 13 Investing for the Future: Mega-Themes and Principled Investment Management 199

Chapter 14 Long-Term Strategy Document (Example) 217

IMPERATIVE 4 DRAFT THE ANNUAL INVESTMENT POLICY STATEMENT AND REFINE INVESTMENT TACTICS 235

Chapter 15 Drafting the Annual Investment Policy Statement and Refi ning Investment Tactics 237

Chapter 16 Rethinking the Role of Traditional Asset Classes 249

Chapter 17 Assessing Alternative Assets and the Search for Recurring Alpha 267

Chapter 18 Selecting Individual Investments and Investment Managers 285

Chapter 19 Investment Policy Statement (Example) 299

IMPERATIVE 5 MONITOR PERFORMANCE AND RESPOND TO THE NEED FOR CHANGE 309

Chapter 20 Monitoring Performance against Internal Goals and External Benchmarks 311

Chapter 21 “White Water Investing” and the Management of Wealth in Turbulent Times 321

IMPERATIVE 6 SELECT AND MANAGE AN ECOSYSTEM OF TRUSTED FINANCIAL ADVISORS 327

Chapter 22 Designing the Ecosystem and Selecting Advisors 329

Chapter 23 The Role of the Family Office 341

IMPERATIVE 7 ENGAGE AND EDUCATE THE FAMILY 359

Chapter 24 Determining the Right Wealth Distribution Strategy 361

Chapter 25 Preparing the Family for Successful Management and Transfer of Wealth 375

CONCLUSION 393

Chapter 26 Pulling It All Together: The Successful Management and Transfer of Wealth Across Generations 395

Bibliography 403

List of Essay Writers 407

List of Figures and Tables 409

About the Authors 411

About the Raffles Family Wealth Trust 415

About Northwood Family Office 419

Index 423