FOX Series

While many principals sense that their current investment programs aren’t likely to produce satisfactory risk-adjusted net returns in coming years and beyond, most have difficulty pinpointing with actionable precision the root causes of their discontent. We’ve assembled a list of the defects we encounter most frequently, rank ordered by their frequency of appearance.“As we prepare for the FOX Autumn Global Investment Forum in New York (September 12th), I wanted to highlight the thinking of one of our session speakers, David A. Salem of Windhorse Capital Managment. David will be speaking on str...

“What is your family office’s number one threat? If it happened today, could you function tomorrow?”These are the questions that one family office executive asked her peers as she finished sharing the story of her office’s move to the cloud. If you can answer, “Yes” to the last question, you’re in great shape and may not need to keep reading. If this question gives you pause, the lessons learned from this FOX Council member may help you as you consider your options.FOX Council meetings bring a group of 25 like-minded executives or wealth owners who share similar roles and challenges to t...

Interest in Direct Investing Increases: The 2017 FOX Global Investment Survey reveals a growing focus on direct private equity investments for family offices, reflected in asset-allocation and staffing trends.

Based on financial news articles and television shows, everyone should be aware that money is being constantly withdrawn from active managers and placed into ETFs and other index funds. Undoubtedly, active managers are striving with even greater urgency to beat the indexes against which they are judged, seeking some edge. Here are two typical large-company, blue-chip strategies. One is value oriented, the idea being that the manager selects, only from within the benchmark index, in this case the S&P 500, those stocks that are the least expensive. It is generally agreed to be a lower-risk a...

The ingenuity and success rate of hackers targeting banks and credit unions continues to shock and amaze. Don't expect the financial services industry to ever willingly disclose how much it loses to cyber thieves on an annual basis. But make no mistake determined, well-funded hacking rings continue to breach banking systems on a regular basis. And they continue to inflict material losses; likely at a scale the general public would find shocking.Breach attempts against financial services firms occur 24/7/365, says Brian Soldato, senior product management director at NSS Labs, an Austin, Texas-b...

When was the last time you felt “at home” in a completely new environment? What about this experience – the people you encountered or the service you received –made you feel truly welcomed?This happened to me last week at my daughter’s college orientation, a day filled with big emotions, as any survivor of this experience well knows. The faculty and students who welcomed us took the angst of the unknown out of this new situation by doing a great job with onboarding. They began by conveying their desire to make this new experience a positive one for students and parents alike and led us through...

51% of decisions in family businesses are made by senior generationsOver the last few years, business owners have inquired about ways to integrate the younger generations with the purpose of preserving the family business. In a recent FOX study, 70% of survey participants said that generations 1 and 2 are leading the business. Furthermore, as indicated in the graph below, 51% of decisions are made by the senior generation compared with 38% of decisions reached through consensus. I believe this information indicates a struggle family businesses are faced with, in particular finding appropriate ...

How does one manage a vibrant, multi-dimensional family business with family members and stakeholders scattered across the country? That’s the 21st century challenge for business-owning families, and creating a family enterprise is the first step in an effective strategy to address it.Many successful family businesses I’ve worked with have transformed themselves over the years into family enterprises. These are families that define their collective wealth as broader than the family business, or the financial wealth, and inclusive of all that the family owns collectively. They’ve managed ...

For the past several years, I have had the honor and pleasure of Co-Chairing the FOX Senior Management Council with Mariann Mihailidis at FOX. This council is a wonderful group of 25 senior family office leaders of multi-generational family enterprises who meet twice a year for a couple of days. My involvement in this council came in response to their desire for leadership training focused on the practical skills they need to engage and serve multiple generations of family members. One of the areas we’ve covered is the notion that different situations require different levels of leadership:Exp...

The impact of the work accomplished each year by FOX family council members is impressive. We gather these peer groups of 25 wealth owners or family office executives twice a year, and my favorite session of the first meeting of the year is called “Accomplishments and Initiatives.” In this session, every council member seated around the table has an opportunity to share his or her greatest accomplishment of the prior year and number one initiative for the current year. Each year, I am blown away by the progress that these family office leaders are able to make with their (often) small-but-migh...

Every time you communicate, you’re doing one of two things:You’re adding valueYou’re taking up spaceWhen you add value, you’re contributing to the conversation. Clients are more likely to listen to you, remember you, and take action on what you say. They’ll pay more for your time, and respect your opinions. Your listener will give you their most precious resource: their full attention.You add value when you are communicating using your own high-performing traits.On the other hand, the more space you take up, the more difnancult it becomes to continuously earn your spot, and the more likely you...

The industry discussion of advisor fees realistically is not really an issue with fees. The issue is with the communication of the value associated with the fees. Most advisors provide value beyond the assets under management fee structure. But in many cases, the fees are presented only in relationship to assets under management.When fees are presented only as AUM-related then the only value really is the investment process that drives the investments. There are many problems with presenting your fees this way as the industry changes and new low cost options continue to infiltrate the investme...

Writing down what’s worrying you releases energy and frees up brainpower to be used more productively. Researchers have found that students with test anxiety who spend 10 minutes journaling before an exam score better than those who carry their worry into the exam. Similarly, studies have shown that writing down your concerns before going to bed can lead to a better night’s sleep. Bottom line: articulating what is keeping you awake at night is the first and most important step to mitigating your concerns.I have had the chance to participate in many of our 10 FOX Councils, small groups of...

While investing has never been straightforward, investing today in the face of current uncertainty may seem overwhelming.Traditional approaches to constructing a portfolio — those that investors have relied on for decades — appear outdated. From today’s vantage point, one might say that the “arc of alpha” suggests the following:Given today’s starting valuations and current yields, many investors have little confidence that the same equity/bond portfolio that has generated meaningful returns over the past 30 years will be able to produce the investment returns expected and likely ne...

As I was preparing for the recent FOX Global Owners Forum, I was thinking about the importance of partnerships for family enterprises and why trust is the essential element in building strong partnerships. I thought it was worth defining trust and illustrating how it influences the different relationships in the family eco-system.The issue of Trust is a complex concept, and trusting others is not something that comes easily to many entrepreneurs and enterprise families. Because success attracts many untrustworthy suitors, it is natural for successful people to distrust the motives of anyo...

Discussing the impact of wealth on your family can be a difficult conversation to initiate and daunting to guide. Everyone wants the relationship with money to be positive with the expectation that the wealth nourish the interests and entrepreneurial desires of the next generation and that patterns of dysfunction or entitlement are avoided.One of the experts in this field is Lynn Twist, a well-known author and speaker about a family’s relationship with their wealth. She will be a keynote speaker at the upcoming FOX Global Owners Forum. Her session will provide the opportunity to th...

According to the FOX 2016 Family Office Compensation and Benefits Study, nearly 50% of offices surveyed said that finding and keeping competent, experienced talent was their biggest challenge.

The Family Enterprise is a way of thinking about the true scope of your family. It goes beyond the family business. It is more than the invested wealth. It includes all the family members, the philanthropy, the history, the values, and the future of the family. If you are the leader of a Family Enterprise, you need to plan, or engage your family members in a planning process, to map out reasons for staying together, how to make decisions together, how to establish roles for everyone in the family, and how to best engage the family’s capital for the future benefit of the family and the co...

Not to be a total Scrooge, but I would be remiss if I didn't raise a cautionary holiday season human capital reminder that your family office holiday party can expose you to increased employer liability. You should begin planning now regarding the policy and communication efforts that will ensure a safe and productive holiday season for your family office.Office Parties Gone WrongWhile the intent of hosting a holiday party for your family office is to revel in good cheer together, you should be aware that your celebration poses several liability risks. I recommend you simply plan ahead to mini...

This is the missing piece and, I hope, the next big thing in technology for financial services and the family office: using automation to create value in the back office.When you look at current trends in financial services, client experience is (quite rightly) seen as the place on which to focus resources. What I would caution, however, is that good client experience has to be backed by operational excellence. Where are the tools to ensure this? Today, financial services companies rely on people to do this—but why?Take an example I have talked about before: there is new software/service in Eu...

How important is cybersecurity to you?If you’re like many family offices, it’s up there as a top priority: in the latest FOX benchmarking survey on family office technology, data security was cited as the top technology concern of FOX members. But what is your office doing about it?FOX benchmarking has found that family offices’ focus on cybersecurity has come a long way, with families and executives taking note of high-profile hacking stories and heeding the warnings of industry experts and taking action to address their own cyber-based risks.In this video from The Chertoff Group, Fall Forum ...

While I was working as a consultant for FOX, the topic of leadership succession was often on my mind—particularly whenever I was working with a multi-generational family to facilitate the process for the family’s leadership transition.So for those of you thinking about leadership succession, here are five things to know before embarking on the journey:1) Knowing that succession is an ongoing process, and not an event, will help the family – Most families are going through some sort of transition at any given time, be it in the family business, the family foundation, the family council, the fam...

There are few speakers more compelling than Mellody Hobson.Hobson (president of Ariel Investments, chairman of the board for DreamWorks Animation SKG, Inc., director of The Estée Lauder Companies Inc. and Starbucks Corporation) is one of the most innovative thinkers and prominent leaders in the business world today. She is a young, dynamic, accomplished investment professional who has strong credentials in philanthropy, serves on several aforementioned corporate boards, and has a keen eye for what’s going on in the investment markets. Hobson is working every day with people that most of ...

In my previous blog post, “Is the Multi-Family Office Pricing Model Broken?”, I noted that there has been a 15% drop in the pricing of wealth management-related services for ultra-high net worth client prospects since 2012. Since then, I heard back from several of you asking about how advisors plan to respond to these changes in the market.Their response to the changing dynamics of price and value actually involves two steps: things they have already done, and the things they are in the process of doing.What they have done alreadyMany advisor firms have established pricing committees or ...

When considering an allocation to emerging markets, investors are almost universally seeking growth.Emerging economies have, indeed, significantly outperformed developed economies, with a GDP growth differential of over 4% per year during the decade from 2006 to 2015, based upon IMF data. For the past few years, however, emerging markets have been subject to deep skepticism over the sustainability of their growth potential, leading many to curtail or even abandon allocations to markets that represent well over half of annual global GDP growth.This incongruity leads us to two critical questions...