The Evolution of the Family Office Starts Here

Steve Margulin
Family Office Director

What is a Family Office?

The wealthiest Americans are also the most successful investors, and that is neither a secret nor a coincidence. We believe the reason is simple: they are served by Family Offices.

The Family Office focuses on the integration of tax, wealth, and risk management into one cohesive experience. Typically, in financial services, advice is segregated to very specific expertise versus connected across the different financial services disciplines.

Creating a cohesive and integrated plan can have the same impact once only reserved for the wealthiest. It is now available to every American family.

Why You Need a Family Office

We see that too many of our clients suffer from the conflicts, high costs, and inefficiencies that result from working with multiple, often competing financial firms. We have made it is possible for every American family to enjoy the advantages that were once only available to the ultra-wealthy.

Those advantages include lower costs, smarter tax treatment, and a holistic approach to preserving, protecting, and growing their wealth.

Our vision for a brighter future is to provide the professionals, the expertise, the systems, and operational controls required
to deliver the family office experience.

Latest Family Office Articles

Fear or Greed?

In the second quarter of this year, Berkshire Hathaway liquidated almost exactly half of its holdings in Apple, Inc., amounting to about 389 million shares. This action followed the sale of about 116 million shares, another 13%, in the first quarter. Apple’s share price began the year at about $185 and ended the second quarter at about $217, so Berkshire was selling into an up market, providing over half a billion shares of liquidity into a stock that traded about 63 million shares per day thus far this year. Warren Buffett has famously said that he’s fearful when others are greedy, but there may have been other reasons behind the decision to reduce exposure to Apple.

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Dialectic Youth

According to Wikipedia, the first recorded instance of “OK boomer” was in a Reddit comment on September 29th, 2009, almost 15 years ago. Younger Americans, like all the generations before them, need to form their own identities, and often, that means an outright rejection of the values and cultural norms of their parents and grandparents. This phenomenon is an example of a dialectical process in which the status quo produces its own contradictions. This natural tension can lead to a higher level of truth as the contradictions resolve themselves into progress.

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Seven Fun Facts About Recessions

It is said that when America sneezes, the world gets a cold. A good example of that happened on August 5th, when the Japanese benchmark stock index, the Nikkei 225, had its worst day ever following a disappointing U.S. jobs report. August 5th was a pretty rough day in the news overall: Hurricane Debby was about to slam Florida, Google lost its DOJ antitrust suit over search, stocks tumbled worldwide, including a loss of 3% in the S&P 500, and Iran was apparently ready to strike Israel in response to an assassination in Tehran. It was a four-bagger of political, financial, economic, and climatic disasters. Bogieman terms like “Black Monday” and “Black Swan” were tossed around. Perhaps worst of all, the dreaded “R word”—recession— reared its ugly head again.

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The Real Estate Conundrum

Real estate prices operate very differently from stock prices. Stocks have several attributes that real estate does not: fungibility, meaning your share of ABC common stock is identical to mine; liquidity, with trades of listed stocks executed instantly; small capital commitments, relatively speaking; and utility, you can’t live in your stock portfolio. A family’s home is often its largest single asset and is often a key element in financial and retirement planning. So what are we to make of the current residential real estate market, with its confusing and even confounding signals?

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Que Sera, Sera

In his remarkable book “Extraordinary Popular Delusions and the Madness of Crowds,” Charles Mackay explored the phenomenon of crowd psychology by examining a number of examples of mass hysteria, including the South Sea Bubble, the Mississippi Scheme, and Tulip Mania speculations. Published in 1841, the book remains a must-read for investors because while the mechanisms and liquidity of investing may have undergone spectacular changes, the people doing the investing haven’t really changed at all. What was once called a delusion is now referred to as a bias, or by less fancy street terms, like FOMO. Mackay knew then what we’d be wise to know now: following the crowd can lead to ruin.

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Keeping It Real

Few things affect economic growth and overall prosperity more than interest rates. Low rates create incentives for risk-taking, while high rates act as a brake on economic growth. Interest rates are the principal tool of the Fed, whose mandate is to promote maximum employment and stable prices. Rates do more than heat up or cool down GDP growth; they can cause bubbles to inflate or burst, threaten the stability of our national financial system, imperil the safety net, reduce the value of the dollar, and lead to social unrest. We thought it would be useful to put today’s interest rate environment in perspective by looking at the history of interest rates since the Kennedy administration.

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What can you expect?

Proactive Tax Planning

Most financial professionals neglect this important discipline, but we believe that it’s not what you make, but what you keep that  matters.

Taxes are a drag on portfolio performance, wealth accumulation and lifestyle choices.

We will work to lower taxes in a way that is legal, moral and ethical.

Control the Controllable®

Historically the financial services industry wastes time and money on attempting to control things that can’t be predicted or controlled, such as market direction, volatility, inflation, interest rates, etc.

Our approach is to focus on costs, tax efficiency, diversification and maximum loss exposure. All these things can, and we believe, must be controlled

Multi-Generational Focus

Long-term planning is common among family offices, with a goal of maximizing the wealth transfer to succeeding generations or, in many cases, making an impact on society through charitable giving.

Risk Management

Today risks are magnified for the simple reason that you have so much to protect. Your wealth can make you a target, and the complexity of your holdings can create unwanted personal liabilities that can be managed with careful planning

Prudence & Discipline

As a general rule, family offices do not take uncompensated risks in their investments. They  tend to avoid speculation, preferring instead to take an institutional approach to asset allocation and portfolio management. Family offices accept the ups and downs of markets in ex- change for long term wealth building.

Best Interests Standard

Also known as the fiduciary rule. We follow this standard and put the interests and welfare of our clients first. Because we are Best Interest focused, we search for and implement only what we believe are the most beneficial solutions for the unique needs of the families we serve.