FOXCloud: What’s on the Mind of FOX Members – February 2023

The following were the most talked about topics within our networks on FOXChat in February 2023:

Aircraft Mechanic

We are considering purchasing a Global 6000 and have been advised that we should hire our own mechanic for the aircraft. We have also heard separately that we do not need to hire a mechanic. Does anyone have any experience/advice in this area? (Source:FOPeer)

Our (now retired) aviation manager agrees with this sentiment. This type of aircraft justifies a mechanic.

FOX Editor’s Note

[The aircraft mechanic topic is a continuation, and more discussion can be found in the January 2023 edition of What’s on the Minds of FOX Members.]

Bereavement Policy

We are looking to implement a formal, written bereavement leave policy for our family office. We would appreciate if any other family office would be willing to share their formal, written policy with us. (Source:FOPeer)

We are adding 40 hours of bereavement leave for those employees who lose a loved one. This leave will be available to employees who lose a parent, stepparent, spouse, brother, sister, child or step child. During the time of grief and loss, we want our employees to feel comforted and not have to worry about using PTO for a very stressful time in their lives. Unused bereavement leave will not be paid out at exit and is not carried forward from one year to the next.
Our office has a 5, 3, 1 Bereavement Policy. 5 days for immediate family (spouse/partner, children, parents, siblings), 3 days for extended family (grandparents, aunts, uncles, cousin) and 1 day for other family members not otherwise covered or friend. The request for time off is per incidence, not cumulative.

Bookkeeping/Bill-Pay West Palm Beach

Family looking to hire in West Palm area. Cannot be embedded/associated with CPA firm. Hence, a stand-alone bill-pay/cash management/bookkeeping firm is requested. (Source:ADVPeer)

We have had an excellent experience with JDJ.
We do not have an office in West Palm Beach, but we [BerryDunn] can do the work remotely. No problem with another firm doing the tax work; we work with that model often.
Couple easy options: (i) recommend asking their current investment advisor or private bank for their in-house capabilities to make process seamless and provide cost-benefit, or (ii) companies like Bill.com provide bill pay solutions but your client may need some initial support to get the system set up and implemented. Bank of America Private Bank provides Bill Pay solutions to our clients that have a meaningfully large relationship (investments, deposit and credit) with us at a very reasonable cost.
I'm sharing below insight and firms I know who are independent of advisors. I'm the CEO and co-founder of Maestro (now also JDJ) and got into the industry because of our failures to find something for our own needs. Since the question gets asked fairly often, and we all get the email notification of responses, I put the below together to help others who may have similar questions. There's a video recording floating around as well on the FOX site of Peter M. and I having this discussion in person from last July at the FOX forum.

First- as the other comment suggested - if the complexity (regardless of NW) isn't high (10+ entities, some requiring medium to heavy administration) - you would benefit from and save a lot of time, money and frustration going with services from an existing advisor (RIA/MFO or Pvt bank). They are structured to absorb this level of work efficiently and would likely welcome it to maintain the relationship with you. If there is significant complexity - and you're thinking of starting your own administrative FO with a couple of staff - then you should take a good look at independent service providers - there aren't many who operate at higher levels of complexity (20+ entities/trusts/P&Ls per family with full stack administration without touching investment management). As I said above, I'm not impartial, but hopefully the below info can help you. As far as I know none of these firms touch the investment management side of the house and all work well (and get most of their clients from) the tax firms. Some observations around how to make progress quickly on your goal (written from the perspective of the wealth owner):

Quickly figure out what's absolutely not changing in the advisor ecosystem, map out some of the iffy ones and 'must-change' ones. That will help you draw lines and limit scope quickly (ie not tax, not investment management, banking, etc)

Determine what the top goals are for your family - some examples:

I need near real-time transparency on complex balance sheet consolidations (trusts, foundations, operating companies, liquids, alts, etc).
I need fast operational rigor around transaction management / cash execution (bill pay, capital calls, distributions, liquidity management across accounts, etc)
I need precise financial operations support on non-cash items (making acquisitions, refinancing properties, sub docs)
I need tight controllership (lots of moving pieces with cost leakage potential across the spectrum (personal P&L reporting, vendor/domestic staff management, etc)
I have lots of special projects that need financial ops support (gets kids spooled up for wealth transfer, redo my risk/insurance stack, clean up my physical/security posture, figure out economics of plane charter/lease/buy with tax/regs/business considerations and so on).

Depending on which of the above resonate, determine what your outcomes - goal and ideal future state looks like for each of the above - just write it down and iterate on it. It can be really simple - here's an example of some of mine from a while ago:

I'd like to be able to invest heavily in Alts knowing exactly what I have in commitments outstanding and obligations, exposure to different areas.
I'd like to not worry about spending because someone else is managing my daily P&L for the various properties, staff, etc.
I'd like to figure out this aviation thing - should I continue to charter? lease? buy? coordinate all the smart minds who have strong opinions on this and get them my actual data.
I'd like to more tightly manage the execute of my estate/wealth transfer plan from the T&E team, especially with operating companies / stock in the mix.

Figure out what the tracking outputs - deliverables look like. Your 3rd party firms will help a lot with this.

Reporting stack (P&Ls, consolidations, special project updates, etc.)
Reporting cadence - how often are we communicating - scheduled reports, conversations, etc.
What are deliverables for the advisors and what cadence do they need them with?
How do we handle quarterly ongoing and new projects and arising emergencies?
What does the responsibility / approval matrix look like?
Who's the direct support team for my family, who else is privy to my data?

Independent Family office service providers (not an exhaustive list):

Maestro Family Office (my own firm)

o Newest kid on the block with clean sheet org design for administrative family office

o Takes an extreme "left brain" approach to analytics, communication, anticipation, etc

o Highest NW / extreme complexity dealings - typically $100m to $5B+ families with 100+ entities each

o Fixed fee structure based on scoped complexity up front (all scoping is done in advance of engagement) o Cost in range from $150K to $1M+ per family

o Non-investment advisory/management

JDJ Family Office Services (now merged with Maestro)

o Won best Multi-Family Office award (over $25B) category at Private Asset Management awards

o Administers $25B+ of Family Office complexity - 20ish years doing it

o Merged with Maestro in 2022 to make biggest independent FO firm in US

o Non-investment advisory/management

o Cost typically range from $50K to $500K per family

Aquilance / my accountant: Awesome founders (Joe F. Sr and Jr) and from everything I hear deliver on what they promise to clients.
Paul McCoy - Boston based FO firm - only got to know them through our employee interactions at JDJ/Boston.

Check Writing Software

We are seeking recommendations for check writing software that is compatible with Microsoft Great Plains 18.5. Mekorma has been recommended to us, however, we are also exploring other alternatives. (Source: FOPeer)

We have automated almost all bill paying using bank software and clickpay, and otherwise use ACHs or wires. We write less than one paper check a month. Chase will mail checks to vendors without charge using the bill pay function.

Consolidating Investment Accounts

Currently looking to consolidate multiple different investment accounts across multiple different corporations (JPMorgan, Schwab, Fidelity, TD Ameritrade, etc.) into one. With the upcoming merger between Schwab and TD Ameritrade (Schwab to acquire TD), my thoughts are that Schwab would be the optimal landing zone for consolidation. Anyone here have similar consolidation experience/work with the Schwab Wealth Advisory? (Source: FOPeer)

Our office works with Family Office Services at Schwab. We moved from Fidelity to Schwab in 2015.
I do everything with Schwab but am advised by ACG rather than Schwab Wealth Advisory. We consolidated from having accounts at Pimco, Vanguard, Chase, etc. It's a robust platform and having everything in one place makes everything easier.

Employee Engagement/Education

As family offices are asked to handle increasingly complex issues, there is a general need for more hires. Our office had a growth in employee headcount last year and had some new hires as a result of turnover. With all these new faces, we are looking for ways to integrate employees and foster engagement in their jobs. We want to ask how other family offices are addressing employee engagement and handling employee education and integration. (Source: FOPeer)

There are many things that you can do to encourage or ensure employee engagement. As someone who has been an HR executive with ~30 years of experience, these are my recommendations:

1. Before they even start, i.e. pre-boarding, you can provide them with company information or even a "welcome kit" with a book, or history of the family and/or office. Even introducing them to team/family members before their first day will take away the awkwardness of meeting everyone on day 1 and provide a feeling of relatedness on their first day.

2. With Onboarding, this should be well planned out and begins to set the tone for your family office culture, values, goals and policies.

3. Clarity: Ensure to early on, clarify their role and interrelatedness with the entire Family Office. Less ambiguity allows for greater sense of purpose and connectivity.

4. As with any small business and what we are working on with the Family Office I consult for, create LDPs (Learning Development Plans) for each and every family member and employee. Parts of this process include job/role specific trainings while others may be more business related "electives" they can choose from to have a sense of ownership in their learning journey. Also ensure to have a budget line for each family/employee member to spend specifically on their learning and development.

5. Provide an opportunity for a "quick win" Set them up for success by aligning one of their first goals/objectives to include something already in their wheelhouse and easily/quickly accomplished. That sense of "success" early on, once accomplished and openly recognized will set them up for greater engagement moving forward.

6. Regular Feedback—providing regular feedback, not just during review season, will help them keep engaged and focused, while ensuring they are on task.

Family Accounting & Workflow Software

I'm looking for recommendations for a family office accounting software that allows multiple approval levels on invoices and ultimately remote approval from owner which generates an electronic signature on checks. It must have a robust reporting and budgeting functionality and online bill pay as well. We currently use Datafaction. (Source: FOPeer)

We recently switched to Sage Intact and while it does have a bill pay module, we found it necessary to use an additional bill pay system to get everything we need for approvals.
Sage Intacct meets all of those requirements. There are VARs that partner with Intacct to provide implementation support.

Family Company Leadership Succession

Our family company is owned by the Trust. Since 1965, their company has always been run by a family member. The current CEO is a family member. We are considering hiring a non-family member to run the business. Given this dynamic, how do we:

1) structure family oversight when a family member will not be involved in the day-to-day management of the business; (Executive Chairman?)

2) select a family member for this role when there is no family member qualified (pull names from a hat?); and

3) make this selection without triggering open opposition from one or two of the family branches. Curious how other families have navigated this situation. (Source: FOPeer)

You might consider restructuring so the company could be sold or go public and break the trust into smaller trusts benefiting separate branches of the family.
We have been through this twice and managed it differently each time! It is tricky and depends much on family involvement, education, and preparedness. I would hire or seek help from a consultant but our family has the following that has worked well. I can suggest:

1. Establish working committees depending on the level of family involvement you need. These committees can be mixed with high level execs as well as family members or even external professional board members who provide expertise if needed. We have op co committee, investment committee, audit and reporting etc. This has allowed family oversight and family education for next generation.

2. Establish recurring BOD meetings and assign each family branch with a representative. Also might be useful to discover who is ready in the future if the family wants to be involved again in the future.

FX Help for Family Travel

Does anyone have a resource to help a family navigate the ARS/USD issue? Apparently, there are 2 exchange rates: 1. the official gov't/standard bank and 2. the 'foreign tourist dollar/blue dollar." And the difference b/t the 2 is wild and large. Perhaps any high-end travel concierge could help this family bets decide on FX and/or credit cards, etc. (Source: ADVPeer) •

You might try Avari World and CEO Ali Sheikh: ali@avariworld.com. We have received very positive feedback from our clients.

Investment Analyst Job Description

Does anyone have a job description they could share for an Investment Analyst position for a new multi-family office? (Source: FOPeer)

Maintain investment reporting software and data integrity by reconciling trades, monitoring software updates, and keeping apprised of all investment activity.
Provide regular reporting on performance for corporate assets and trust assets.
Closely monitor financial press and keep track of market trends, news, various indices performance and key market metrics.
Assist in monitoring of investment managers, including performance attribution analysis, style consistency, trading activity, compliance and qualitative assessment of investment processes.
Prepare regular and ad hoc analyses of managers/investment products.
Assist with periodic and annual reporting packages as required for quarterly and annual Board or Trustee meetings.
Support continuous improvement toward best practices for portfolio management.

Shipping Art

We are commissioning an original piece of art abroad that while not very high in price as far as art goes, (about $1.5k before framing), will be handmade and one of a kind. We have the option to receive the art unframed in the U.S. and frame here, or frame it abroad and ship it fully framed to the U.S. For those who have shipped original art internationally, do you have any opinions on which approach would be safer and cost effective? It will probably measure about 24 x 36 when framed, about 12 x 18 unframed. Is FedEx suitable or should we consider other options? (Source: FOPeer)

I would say it depends on the nature of the piece. If it is a flat painting that doesn't have a lot of surface texture, it might be easier and cheaper to ship it unframed, as long as the shipper can mail it in a sturdy enough envelope or even thin box that will protect the work from bending. If it is a piece with a lot of surface texture or embellishments, then you will probably want it framed during transit so that the surface of the work can be protected either under glass or with the bulk of a frame protecting the surface from being touched during transit. This will unfortunately add to the cost, especially for international shipments. A while back FedEx actually had a White Glove division that was specifically intended for fine art and fragile shipments, but I am not sure if that will work outside of the United States. However, in my experience FedEx is still a good international choice for shipping to the United States, even without the White Glove component.

FOX Editor’s Note: FOX has the Following Resources Available

Getting Smart About Moving Your Art by Chubb Personal Risk Services, 2023

Caring for Your Collection: Preventing Loss by The Cincinnati Insurance Company, 2019

Swiss Bank Account

I'm looking for other family offices who have set up foreign currency accounts with Swiss banks. I am looking for general advice on whether or not you had attorneys evaluate the account opening paperwork, what may have happened that you weren't expecting, and any other information I should be aware of when it comes to tax filings. (Source: FOPeer)

My only real input isn't specifically Swiss related, but any signers on a foreign account have to file an FBAR in the U.S. So, make sure your tax preparers know even if no income will be coming off of it.

Additional Topics of Interest Seeking Peer Recommendations, Feedback, or Insights

(Your comments can be submitted as a reply to the message on FOXChat or emailed to networks@familyoffice.com for FOX to post and share anonymously on your behalf.)

Daytona Beach Tax Estate Attorney

Seeking tax and estate attorney recommendations in the Daytona Beach/Port Orange, FL area. (Source: ADVPeer)

Geriatric Care Manager

Looking for a geriatric care manager in the Boca Grande, FL area. Also open to assisted living/nursing home suggestions in the same geographic area. (Source: ADVPeer)

Geriatric Care Manager

One of our clients is looking for in-home care for an elderly parent who currently lives alone and is experiencing memory issues. Please forward any direct contacts you may have or any high-end organizations that might be able to assist with placement. (Source: ADVPeer)

Insurance Claims Help

Looking for third-party service to refer to our client in CA for either bill pay services or help with insurance claims, matching for reimbursement and reconfirm qualifying events. Her biggest need is having help with her Disability Insurance Rider she receives from her policy. She is continually asked to requalify for the disability rider and insurance payments. Periodically the insurance company has her "re-apply" or "re-confirm". It's a lot of work for her and is seeking outsourcing assistance options. (Source: ADVPeer)

Louisiana Attorney

I have a client that has a family member who needs a recommendation for an attorney in Louisiana for the following situation: Threatened lawsuit from a firm claiming to represent the state of Louisiana looking to collect funds used in 2005/2006 when their house was repaired after Hurricane Katrina. (Source: ADVPeer)

Young Adult Tax Guidance

I'm looking for someone who can give some tax guidance to a young woman in the military. She needs someone who can knowledgeably guide her through residency selection and, I suspect, a host of other issues relating to her government/military service but also being a part of a family of substantial wealth. Finding someone younger and perhaps female who she can have an ongoing relationship with would be ideal. (Source: FOPeer)

Member Referrals Requested

This section includes service providers that members have recommended and/or are looking to hear about other members’ experiences.

BCBS Advisor (Houston, TX): Core Benefit Services, Inc. (Roni Krueger) (Source: FOPeer)
CIO Search: David Barrett Partners; Russell Reynolds; Julie Zom (Source: FOPeer)
Corporate Trustee: Bank of America Private Bank; Moneta; TrustWealthgate Trust (Source: ADVPeer)
Cybersecurity Advisor: BlackCloak; BW Cyber Services; Trifident (Source: FOPeer)
Employment Attorney: Connolly Gallaghe; Cowles Thompson (Source: ADVPeer) PT Tutor: Mahler Private Staffing (Source: FOPeer)
Security Company: Gavin de Becker & Associates; Capital Logistics & Investigations; John J. Nazarian of Nazarian & Associates (Source: FOPeer)
Senior Care Consultant: O’Connor Professional Group (Source: ADVPeer)
Small Architectural Firm: AMDG Architects (Brenda Lamfers) (Source: FOPeer)

Software Reviews/Experiences

This section contains software platforms that members have recommended and/or are looking to hear about other members’ experiences.

Datafaction

o Sage Intacct meets all of those requirements. There are VARs that partner with Intacct to provide implementation support.

o We recently switched to Sage Intact and while it does have a bill pay module we found it necessary to use an additional bill pay system to get everything we need for approvals.

Mekorma

o We love Mekorma and are long, long time users.

o We have automated almost all bill paying using bank software and clickpay, and otherwise use ACHs or wires. We write less than one paper check a month. Chase will mail checks to vendors without charge using the billpay function.

Sage Intaact

[see Family accounting & workflow software] (Source: FOPeer)

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FOXCloud: What’s on the Mind of FOX Members – February 2023