© 2008 northern trust corporation northerntrust.com the northern trust experience focusing on what...
TRANSCRIPT
© 2008 Northern Trust Corporation northerntrust.com
The Northern Trust Experience
FOCUSING ON WHAT REALLY MATTERS
Southeast Region
© 2007 Northern Trust Corporation northerntrust.com
Doug Regan, EVP President The Wealth Management Group
May 23, 2008
Nancy Felton-Elkins, SVPDirector of Fiduciary ServicesThe Wealth Management Group
Serving The Complex Needs of Ultra-Affluent Families and Family Offices
2 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What Will We Do Today?
What is The Wealth Management Group?
How are we serving the Ultra High Net Worth client?
What may be changing?
3 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
The Wealth Management Group
Founded in 1982
280 highly trained professionals on staff Our relationship managers have 18 years average industry experience
Wealth Management staff in Chicago, New York, Los Angeles and London
$189 billion in assets under administration
$30 billion in assets under management
64% of Wealth Management Group clients utilize a single family office which represent 85% of AUA
We serve 21% of the Forbes 400 families
Average client relationship size is $474 million
Over 30 client relationships with $1 billion or more in Assets under Administration
400 family relationships, with clients located in 48 states and 15 countries
Services offered: Global Asset Servicing and Reporting
Investment Management
Investment Consulting
Performance Measurement and Risk Assessment
Fiduciary
Private Banking
4 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
Education
Family Financial Forum For Families and their Family Office Executives
Pre-conference for Family Office Executives
Inspiring Human Capital Exclusively for Family Members
Learning and networking
Defining values and passing them on to future generations
Global Wealth Alliance Education for our largest clients’ Family Office Executives
Client Advisory Board For the heads of Family Offices to network with each other
and to aid in improving the overall quality of services we provide to our mutual clients ― the Family.
Financial Executives Group Networking Group for Family Office Financial Executives
5 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
Wealth Passport
With a quarter-century of experience working with Family Offices, Northern Trust understands their complex structures and can deliver comprehensive, customized solutions.
Wealth Passport’s secure environment empowers wealth owners and family offices to conduct business more efficiently, make strategic decisions and focus less time on administrative functions.
Data ConversionDownloads
Assets Held by Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds
Hedge Funds Private Equity Investment Partnerships Family Partnerships Mutual Funds Real Estate & Property Operating Business Other (Art, Collectibles, Vehicles, etc.)
Assets Held Outside Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds
Risk and Compliance Monitoring Transaction Initiation Performance Assessment Net Worth Summary General Ledger Asset Allocation Summary File Cabinet
Asset & Liability Reporting Partnership Reporting Standardized Financial
Statements Calendar Alerts Foundation Management
Wealth Passport
General Ledger Portfolio Management Performance Measurement
Third-Party Software
Client-Initiated or Automated Data Integration
Data
Data ConversionDownloads
Assets Held by Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds
Hedge Funds Private Equity Investment Partnerships Family Partnerships Mutual Funds Real Estate & Property Operating Business Other (Art, Collectibles, Vehicles, etc.)
Assets Held Outside Northern Trust Custody Trust Deposit Investment Management Brokerage Foundation Lending Mutual Funds
Risk and Compliance Monitoring Transaction Initiation Performance Assessment Net Worth Summary General Ledger Asset Allocation Summary File Cabinet
Asset & Liability Reporting Partnership Reporting Standardized Financial
Statements Calendar Alerts Foundation Management
Wealth Passport
General Ledger Portfolio Management Performance Measurement
Third-Party Software
Client-Initiated or Automated Data Integration
Data
6 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
Acquirors vs. Inheritors
Acquired Transition in socio-economic class
Identity is established partially or wholly prior to acquiring the wealth
Acquiror’s Quandary
Incorporating wealth into personal identity How much do I assimilate
Inherited Maintenance of socio-economic class
Identity is tied up with wealth
Inheritor’s Quandary
Growing an identity out of a wealth environment
7 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What is Making My Phone Ring?
Intergenerational Wealth Is the client an acquiror or an or an inheritor?
Acquiror: Concern that the next generation will have too much money
Inheritor: Concern that the next generation will not have enough money-needs to work; entitlement
8 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What is Making My Phone Ring?
Interest in Dynasty Trusts Family Offices becoming investment
companies or multifamily offices
Aggressive tax strategies
Investment performance requests for complex portfolios to review managers and consultants
9 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What is Making My Phone Ring?
Buying Unusual Assets or Placing Them in Trusts
Estates with staffs
Art
Jewelry
Timber
Natural gas wells
Yachts with crews
Planes with gas bills?
10 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What is Making My Phone Ring?
Questions About Reporting: Challenges of Information
Wealth Passport encourages customization and aggregation
Some folks want it simple
Electronic reporting, CD’s, or paper?
Fear of computers
“I’ve been elected. What should I do?”
11 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
Where In the World Do I Go?
What states don’t have state “death” taxes?
Should I avoid moving to a Community Property state?
What does de-coupling mean? Will I pay more death taxes in the state I call home?
What states don’t have state taxes?
Where can I have a Dynasty Trust with no Rule Against Perpetuities?
Should I have an Asset Protection Trust in Delaware? In Guernsey?
I know some states have better laws for Special Needs Trusts. Which ones?
If Northern Trust in Chicago is co-trustee with my attorney in California, will my Irrevocable Trust be taxed in California if I am a California resident?
Where is it best to establish a Private Trust Company (PTC)?
We have a PTC but want Northern Trust for:
Asset Servicing/Information Delivery / Global Assets
Co-Trustee with powers limited to making discretionary distributions
Consultant on investments, discretionary decisions, being a trustee
12 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
The Yale Syndrome
Asset Allocation Challenges with Alternative Asset Classes
13 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
The Yale Syndrome
Percentage recommendations of consultants and investment committees range from 25-80%
Passive versus Active Investments
Knowing the Trust and family objectives, goals for advisors, and risk tolerance: family meetings
Need for pooling assets, LLC’s, layered entities, schematics
14 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
The Yale Syndrome
Lack of sophistication, need for education
15 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What In the World Are You Doing?
Facilitating Family meetings
Working with multiple attorneys from several firms
Reforming, Remodeling or Decanting trusts
Clients willing to pay for strong attorneys and accountants
Engagement letters
16 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What In the World Are You Doing?
Retainers or pay as you go and expenses
Bias to big law firms with global capabilities
Global capabilities for international legal, trust and estate planning
You wear many hats
17 The Northern Trust Experience
A C C E S S . E X P E R T I S E . S E R V I C E .
What May Be Changing?
EVERYTHING!
The Tax Law
Strategies to unbundle fees
New Congress in 2009
Global Issues
AML for every country
Information Imperatives
Next Generation Issues
Succession planning
Philanthropy
© 2008 Northern Trust Corporation northerntrust.com
The Northern Trust Experience
FOCUSING ON WHAT REALLY MATTERS
Southeast Region
© 2007 Northern Trust Corporation northerntrust.com
Doug Regan, EVP President The Wealth Management Group
May 23, 2008
Nancy Felton-Elkins, SVPDirector of Fiduciary ServicesThe Wealth Management Group
Thank You