Latest news with #WealthPreservation
Forbes
4 days ago
- Business
- Forbes
Spotlight: The Role Of Family Office Investment Committees
Do you know what an Investment Committee is? The Agreus and KPMG Private Enterprise 2023 Global Family Office Compensation Benchmark Report reveals that more than 60% of family offices cited wealth preservation and long-term growth as the primary purpose of their operations. For families focused on long-term success, one critical yet often underestimated enabler is the Investment Committee (IC). While many family offices have historically relied on informal decision-making, growing portfolio complexity, evolving family dynamics, and rising expectations for transparency are elevating the importance of structured governance. This has propelled ICs to the forefront of governance. Despite their growing importance, many families lack clarity around what these committees should do, who should sit on them, and how they can be leveraged most effectively. This article explores the evolving role of Investment Committees in family offices, including their structure, core responsibilities, and the types of expertise required to make them effective. Drawing on our experience advising and recruiting for family offices worldwide, Agreus offers a practical view on how to create committees that combine technical acumen with cultural is a Family Office Investment Committee? An Investment Committee is a formal governance structure responsible for overseeing a family office's investment activities. Its purpose is to ensure that investment decisions align with the family's financial objectives, risk tolerance, and long-term vision. We have previously discussed the importance of an Investment Committee on Forbes. In contrast to informal or ad-hoc investment decision-making, which is often led solely by principals or close advisors, a structured committee provides a level of oversight, accountability, and strategic direction. Its primary roles include: By embedding these practices into a formal committee, family offices can better navigate today's increasingly complex investment Responsibilities A well-structured IC plays a critical role aligning day-to-day decisions with the family's strategic investment goals. Key responsibilities typically include: Ultimately, the IC acts as a bridge between the family's values and the operational execution of their investment strategy, providing discipline, continuity, and Should Sit on an Investment Committee? While the structure of an Investment Committee varies by family office size and complexity, successful committees share common characteristics in terms of composition and expertise: Typical size: Suggested Composition: While there is no one-size-fits-all answer, we believe that the ideal composition should include a blend of: Success depends not just on credentials, but on the ability of members to collaborate, challenge constructively, and maintain trust. As family offices mature, informal or personality-led investment processes become harder to sustain. The move toward formal Investment Committees is no longer simply a best practice, it is fast becoming a necessity. As outlined in our Family Office Maturity Model, professionalising governance ensures not only operational resilience but also strategic foresight. A high-functioning IC can transform investment decision-making from reactive to visionary, supporting both current returns and multigenerational legacy. Process of identifying the IC members While agreeing on the type of individual who takes a seat at the IC, we must not ignore how this person was appointed for the role. We are currently in the process of collecting data for our family office governance report and we have been analysing how IC members, their selection process and its impact on the overall effectiveness of the IC. We found that the effectiveness of ICs shoots up dramatically when they have undergone a professional search process to identify the best person for the role. Our findings were interesting and indicate that the vast majority of family offices rely heavily on existing relationships or close contacts when appointing IC members. While this approach may seem convenient, it often lacks the objectivity necessary for good decision-making. You may not always be appointing the best person for the job. In contrast, the few family offices that undertake a professional and structured search process to identify and recruit IC members tend to have the most effective ICs, highlighting the value of a more deliberate and merit-based approach to committee composition.
Forbes
10-07-2025
- Business
- Forbes
Wealth Protection Ethics: Legal Safeguards Rooted In Responsibility
Blake Harris is an Asset Protection Attorney and Founding Principle of Blake Harris Law. In today's litigious and highly transparent environment, protecting wealth is no longer viewed as an optional strategy; it is a fundamental component of responsible financial planning. High-net-worth individuals, particularly business owners, professionals and investors, often face elevated exposure to legal risk simply by virtue of their visibility and success. As asset protection strategies become more sophisticated and more common, so does public interest in how wealth is preserved and transferred. Conversations about financial transparency, fairness and legacy have grown more complex, especially in an era when headlines can shape reputations and regulatory scrutiny continues to evolve. In this context, effective asset protection must go beyond technical compliance. It requires ethical consideration. Preserving wealth wisely involves not only safeguarding it from unjust threats but also ensuring that the methods used reflect long-term values and a commitment to responsible stewardship. Legitimacy In The Spotlight: Protecting Wealth Responsibly Asset protection is entirely legal, and when structured correctly, it is designed not to obscure wealth but to insulate it from unjust seizure. In my practice, I often emphasize to clients that the goal is not to relinquish ownership but to strategically position assets beyond the reach of frivolous lawsuits or opportunistic creditors. Too often, asset protection is misunderstood or misrepresented as a form of tax evasion or secrecy. These perceptions are not only outdated but fundamentally incorrect. For U.S. persons, asset protection structures are tax-neutral. They do not reduce or eliminate tax obligations. Instead, their purpose is to safeguard assets from civil litigation, malpractice exposure or personal liability stemming from business ventures. Another misconception is that asset protection is something to pursue only when legal threats are imminent. In reality, the most effective strategies are proactive. By setting up structures before any claims arise, individuals avoid the appearance and legal risks of fraudulent conveyance. The best time to protect your assets is before you ever need to. Best Practices For Values-Aligned Wealth Protection The ethical framework of wealth preservation centers around intent, impact and integrity. Here are values-based principles that responsible clients and advisors should uphold: Transparent Documentation: Legitimate asset protection requires thorough documentation, clear trust deeds and consistent reporting to authorities like the IRS (e.g., Form 3520 and Foreign Bank and Financial Account Report [FBAR], where applicable). Purpose-Driven Legacy Planning: Protecting wealth should support long-term individual or family goals, not just short-term risk aversion. Offshore and domestic trusts can be structured to enable generational transfer while preserving legal separation. Philanthropic Structure: Asset protection and generosity are not mutually exclusive. Charitable remainder trusts, donor-advised funds and impact investment vehicles are legitimate tools for both shielding and sharing wealth. Incorporating ESG: Forward-thinking asset holders increasingly align their portfolios with environmental, social and governance (ESG) values, ensuring their wealth reflects their personal or family mission. The Role Of The Attorney As Steward Attorneys who specialize in asset protection serve not only as legal technicians but as strategic advisors who help clients make informed, values-based decisions. Their responsibility extends beyond legal compliance to include ethical guidance and long-term planning. Rather than simply executing what is legally allowed, responsible attorneys encourage clients to take a thoughtful approach, one that aligns legal strategies with personal values, professional obligations and reputational awareness. For example, effective advisors can help ensure that: • All planning is initiated well before any legal threats arise, minimizing the risk of fraudulent transfer claims. • Clients have a clear understanding of the purpose and limitations of any asset protection structures they use. • Trustees or fiduciaries are selected based on professional qualifications and a demonstrated ability to act with transparency and integrity. When carried out in this way, asset protection becomes not just a legal safeguard but part of a broader commitment to responsible wealth stewardship. Wealth As A Stewardship, Not A Shield Asset protection should not be viewed as a fortress built to hoard wealth but rather as a framework for responsible stewardship. As litigation risks continue to rise, so must the thoughtfulness and integrity behind the legal structures used to safeguard assets. Ethical wealth protection is not about concealment. It is about honoring what has been built, shielding it from unjust claims, preserving financial privacy as a legitimate right and ensuring that one's legacy benefits those it was intended to serve. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
