FOXCloud: What’s on the Minds of FOX Members – July 2023

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

 

Bonding Family Office Employees

We are a small family office that serves a variety of family entities (partnerships, trusts, LLC, etc) that have high value assets. We are about to grant check-writing authority to a few family office employees for the family office itself, and for the entities it services. Have other families bonded family office employees for this purpose? If so, can you provide insight as to insurance companies used, approximate cost, structure used (e.g., create service level agreements between the family office and the other family entities served)? (Source: FOPeer)

  • We have a small family office and have authorized signers on many accounts. We have crime insurance which covers employee theft.

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Captive Insurance Tax Attorney

Does anyone have a recommendation for a tax attorney with experience in captive insurance? (Source: ADV/FOPeer)

  • We recommend Joshua Smeltzer from Gray Reed in Dallas. He has strong experience in this area. We are happy to make an introduction to you or you can reach out directly. His digital bio: Joshua Smeltzer - Gray Reed

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Consultant for Family Office Professionalization

We are a newly formed family office considering the sale of our operating entity. The process has prompted us to evaluate our leadership/governance structure which consists of family members. We are interested in a consultant that can help us develop a more professionally managed model. Any suggestions? (Source: FOPeer)

  • I'd recommend Debbie Bing, Caleb White, and Todd Smith from CFAR. They have a ton of experience in doing these exact projects.
  • We are a post-liquidity event single family office in a similar position looking to develop a more formalized governance framework (to improve strategic planning, decision-making and engagement). We are actively researching consultants for a good match and would welcome feedback and guidance on consulting relationships that have worked well for others. We are seeking a consultant with therapy/mediation expertise to simultaneously address overall trust and communications.
  • My concern in answering is how to properly read the words 'professionalize' and 'governance,' etc. However, Richard Wolkowitz at Xylogenisis would be great at an overall review of the family office. Janet Artz has a particular expertise in professionalizing, or institutionalizing, the investment side of the house. If this was more about the family governance side, there are certainly a host of names, including Mindy Earley within the FOX community. Happy to brainstorm or make introductions to anyone in my network that does this kind of work.
  • We have been using Don Delf as a consultant who has helped us navigate the transition into a professionally run SFO. His professional background has focused exclusively on the family owners of 9- and 10-digit businesses / estates. He has extensive experience dealing with both the financial and people issues peculiar to high-net-worth families. He can help you think through all the issues common to this transition and can also help you eliminate most or all of the federal estate tax – a project that should be considered before the sale of your entity. I highly recommend you contact him to discuss your fact pattern. If he is not the right fit, he can help you find the right fit as he is well connected in the UHNW advisor community.

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Family Office Branding

We are currently standing up a family office and are in the process of developing the logo and branding. Would love feedback on whether your Family Office branding was intentionally designed to have a connection (design, color, text) to the brand of the main company, or whether any consideration was made to intentionally have them be different/not connected. (Source: FOPeer)

  • We are intentionally developing a logo separate and distinct from the family operating business for privacy reasons.
  • Our family office purposely chose a brand name and logo different from our operating company, that relates only to our family, to reinforce to employees and the investment world that they are separate organizations.
  • We developed a separate logo and it’s nice to have for letterhead, presentations...helps to identify us to the family and vendors. We have both a family office and a private trust company that use the same logo...one with the name of the family and one with the name of the trust company. It should say "family office" not family. I think having a separate logo from any operating companies associated with the family and family office helps vendors to better understand that we are separate from the operating companies. We've had ours in place for over 20 years.

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Home Security Systems

What home security systems/security monitoring vendors are used by family members? Our family office received a request to look into home security options, and it seems ADT, Vivint, and Ring dominate the market. What are some thoughts or recommendations? (Source: FOPeer)

  • Edgeworth is a high-end security company. Feel free to have FOX connect us if you would like to learn more - their website is listed below:

           Security Backed by Military and Law Enforcement Experience | Edgeworth Security

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Insurance for WYPTC Trustee

Does anyone have a recommendation for where to get insurance for an incoming Trustee for our WY PTC? (Source: FOPeer)

  • I don't know if it's "live" yet but I know that a group out of Colorado called the Private Trust Consortium has worked on a specific trustee liability policy. If you'd like an intro to the group, I'm happy to make it or to just share the information here on FOX Chat.

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International Money Transfer

We have a client originally from Germany (now a US citizen). They currently have cash in a German bank that they'd like to get to the United States. Does anyone have a contact or any recs that can help us move the dollars to the states? (Source: ADVPeer)

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Key Employee Long-Term Employment Agreements

Our Family Office is looking for guidance from other family offices regarding employment protections and compensation structures for key employee(s). Our family office no longer has an operating business. The wealth creator looks to pledge all of his personal assets to charity during his lifetime, and what will remain is: (1) An Irrevocable Trust for the benefit of G2 (2) Possible corpus hangout in the Charitable Foundation.

The wealth creator has a unique relationship with a key employee in particular, and as such, wants to ensure that this employee has a job after his death in the following capacity: (1) To act as an advisor to the 2-G2's (2) Disburse the remaining charitable corpus based on the wealth creator’s intentions (3) Aid in the estate settlement and related matters.

We are looking to discuss with FO with similar situations, as well as FO that are also looking to sunset their private foundation. (Source: FOPeer, HCAP, LCN)

  • We have a somewhat similar situation involving me. FOX can put us in touch and I would be happy to discuss the elements of our solution to very similar questions.

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Outside Reporting Platforms

We are considering engaging Mirador to get us up and running on the Addepar platform, including their Navigator add-on. Any comments much appreciated. (Source: FOPeer)

  • I don't think Navigator has great reviews, and Mirador make the Addepar set up and reporting much easier than using Addepar on its own.
  • We have had a wonderful experience with Mirador, they have a very responsive and professional team. We like very much that combination Addepar/Mirador and highly recommend them.

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Personal Assessment Tools

What personal assessment tools do you recommend to help rising generation members better understand their interests and abilities? (Source: FOPeer)

  • The Strengthfinders 2.0/Clifton assessment is fantastic to identify skills, strengths, etc. With the purchase of the book, you get access to the online assessment tool. The book is a simple and quick read, good for most ages!

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Personal Information Theft Response

A family member was the victim of a recent break-in, and the items taken included documents with personal identifying information. We are seeking input from other family offices that may have experienced this type of event to ensure that we fully respond to this situation.

Actions Taken

  • Police notified  
  • Fraud alert placed with credit bureaus  
  • Freezing credit  
  • Notified financial institutions  
  • Working with insurers on coverage of losses

Are there other key steps that we should take? Should we consider physical safety measures in response? Has anyone worked with consultants or physical security services that they would recommend? Any and all input is welcome and appreciated. (Source: FOPeer)

  • Additional tips:
    • Periodically, check the Secretary of State's website for Fictious Business Name filings. Search for your name under the "Owner" search function. Armed with the personal information of your family member, criminals will file a fictitious business name, listing the victim as the "business owner" along with a new address. From there they file for business credit cards. Sometimes the addresses are fake and other times they are P.O. boxes that are filed in a way to look like apartment numbers.
    • Closely monitor all your incoming mail. Many times, the fraud effort will trigger a letter/correspondence from a bank, etc. to the victim's home address.
    • Get to know your mail man. Criminals will try to forward your mail to a new address, which will trigger a "Change of Address" confirmation letter from the Post Office sent to your home address. You will want to shut down that effort.
    • Subscribe to "USPS Informed Delivery". Each day you will get a scanned electronic copy of all your incoming postal mail emailed to you.  Cancel all paper deliveries of financial documents.
    • Your credit files at Equifax, Experian, TransUnion, Credit Karma, etc. are SO EASILY hacked by criminals. So make sure you have set up accounts at each agency and login into them regularly to make sure you still have control of your files.
    • With double authentication, always use your cell phone to get a text message with the code (as opposed to a confirming email). If they hack your email account, double authentication is of no value.
    • If you do become a victim of identity theft, be prepared to spend hundreds of hours trying to shut it down. If you are diligent in shutting down fraud, eventually the criminals give up and move on to the next victim.
  • Company contacts who specialize in this:
    • 360 Privacy
    • Distributed Risk
    • Global Intelligence Consultants

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Sample Chart of Accounts

We are in the process of converting to Sage Intacct from QuickBooks, and looking to achieve a common chart of accounts for all entities. Rather than start from scratch, we are hoping someone can assist with an established COA for our consideration. (Source: FOPeer)

  • We used a special team within RSM to assist with our migration to Sage and it was exceptionally easy working with that team- the sage onboarding team was about the tech side but the RSM team was a partner in helping to collate and onboard data, set up the COA, etc. Happy to connect you.
  • We developed the COA on our own, with tech support from our implementation partner. Feel free to reach out if you'd like to talk.

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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.)

Addepar ROI calculations

Does anyone include ROI along with IRR on their Portfolio statements using Addepar? Right now, Addepar is using annualized IRR to calculate the ROI which seems off. (Source: FOPeer)

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Dating Apps/Matchmaking Services

A child in a UHNW family wants to be on dating apps, but the family is concerned about privacy. Are there any dating apps known or thought to be better than others for privacy considerations unique to UHNW families? As an alternative, are there any matchmaking services that we could recommend to them? This would be for the New York, Los Angeles, and/or Miami areas. (Source: ADVPeer)

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Financial Educator for Family Meeting

We are preparing for a family meeting and would love to include a 60-minute education and training session on investing targeted at the next gen (teenagers to young adults). Specifically, we want to cover the basics - what is a stock, what is a bond, what purpose do they serve, and how should people think about making a quality investment? Does anyone in the community have a recommendation for a talented and engaging educator/facilitator? (Source: FOPeer)

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Ghostwriter Recommendation

We're looking to retain a ghostwriter and are hoping someone can recommend a firm or individual he/she used in the past. We're looking for a publishing professional who does freelance work in the fields of developmental editing, ghostwriting, and/or book doctoring. I'd say our project leans more towards being a creative memoir. (Source: FOPeer)

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Master Trust/Investment Partnership

Our family office has several trusts that are set to distribute their assets to new trusts in the next four years. As a result of the distributions, we will have 5-10 new trusts with a smaller portfolio as opposed to the 2-3 trusts with larger portfolios we currently manage. We are trying to determine the most efficient way to manage the investments and account for each separate trust. Does anybody have any recommendations on which vehicle would allow for the large portfolio? In discussions with different advisors, the idea of an investment partnership where each of the separate trusts is a partner has been brought up. If you have set up an investment partnership for this purpose, what was the set up like? Do you outsource the trust accounting or know of a group that would manage the day-to-day trust accounting? We appreciate any insight that anyone can provide. (Source: FOPeer)

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Mirador Fees

Are there different tiers of service within Mirador with different pricing? What are the fees based on AUM? We are not getting the best service and I wonder if we would get better service if they assigned us to more Senior Team over there and whether this would involve higher cost. (Source: FOPeer)

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Outsourcing Administrative Functions Abroad

How are you handling the big four accounting firms insisting that they don't need to procure client consent in advance of using third parties (including those outside of the U.S.) for administrative, infrastructure, hosting, use of cloud-based solutions, and other support services? How have you managed the cyber risk? Have you had success in negotiating this provision in engagement letters? (Source: FOPeer)

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Real Estate Agent Referral

We're considering purchasing a personal residence between Charleston, SC and Sea Island, GA. Can anyone recommend a real estate agent? (Source: FOPeer)

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Security Camera Monitoring

We are looking for a firm to monitor the security camera system on our residences as our current vendor is closing down their operation. We desire a dedicated team in a 24x7 security operations center that will interact with the family office and train with our executive protection team while monitoring 30+ cameras across 7 properties. (Source: FOPeer)

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SOC Reports

We recently requested SOC 2 reports from our trust company as well as one of the sub-service organizations they use. We were only provided with the opinions in response and were met with some resistance when we requested the full reports. Has anyone else encountered this? Or have your banking/trust partners been able/willing to provide full reports? (Source: FOPeer)

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Visa Counseling

A member of the family we work for needs some legal counseling for a student visa. Previous visa counseling experience has not been good and therefore we would like some recommendation of a reliable law firm that may handle semi complex issues. Any help will be appreciated. (Source: FOPeer)

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Member Referrals Requested

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

Headhunting for a CIO

Our current Chief Investment Officer is leaving, and we need to hire a new person for the role. Does anybody have a good headhunting reference for this position? The person right now takes care of the consolidated portfolio but also manages individual portfolios as well, ideally bilingual Spanish/English. If you know anybody or know where to find someone, please let me know. (Source: FOPeer)

  • Companies who specialize in this:
    • Agreus
    • Heidrick & Struggles
  • Individuals who specialize in this (please contact your FOX RM for contact information):
    • Janet Artz – not really a headhunter but might be able to help given her involvement in the CIO role in FOs.
    • Charles Skorina
    • Richard Wolkowitz – a bit of a broader focus but might be able to help.
    • Jeff Warren – directly on point to this search.
    • Rebecca Maguire – directly on point to this search.
    • Sam Frank – not as specialized in FOs as the others but worth chatting with.

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Tech Stack Independent Consultant

I'm reaching out to see if you know of any independent consultants who could help. We have a family in TX that owns several op cos (energy and energy-adjacent) that is looking for an independent consultant (not Big 4) to evaluate their tech stack for the family office and the operating businesses. Have you worked with anyone you'd recommend? (Source: TODS)

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Vancouver CPA

Seeking recommendations for a CPA in Vancouver that handles dual citizens for the United States and Canada. Any recommendations or referrals would be greatly appreciated! (Source: ADVPeer)

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Software Reviews/Experiences

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

Addepar and Navigator

Anyone have any experience with Addepar and Navigator? Using Mirador as the manager of these platforms? (Source: FOPeer)

Masttro and Sage Intaact

Has anyone worked with Sage Intacct and Masttro together? We’re curious as to how well the programs are able to integrate. (Source: FOPeer)

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Key to Network Acronyms

  • ADVPeer: Advisor Peer Community
  • FOPeer: Family Office Peer Community
  • DIN: Direct Investing Network
  • FLN: Family Learning Network
  • HCAP: Human Capital Network
  • LCN: Legal Counsel Network
  • PTC: Private Trust Company Network
  • RGN: Rising Gen Network
  • TODS: Technology Operations & Data Security Network

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