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Does your family need a Chief Investment Officer?

Growing your wealth successfully and efficiently requires an objective and independent approach for selecting manager expertise. As markets fluctuate and react to a host of world events, evolving industries, and regulatory changes, determining the next best move, or whether to hold strong, can involve some complex decisions. That complexity becomes even more daunting when multiple investment strategies with different risk and return characteristics are involved. Fortunately, this can be made significantly clearer and, more importantly, much less stressful with a personal Chief Investment Officer (CIO) from Richter Family Office at the helm. Engaging the strategic acumen and the financial oversight of a CIO to take care of your family’s wealth can be a smart, significant step toward better growth and a lot more peace of mind.

 

A Chief Investment Officer can bring objectivity to an emotional exercise.

The greatest benefit a CIO can provide to you is bringing independence and objectivity to a very emotional exercise. When your family’s financial health and future prosperity is at stake, keeping emotions from influencing a rational decision can be nearly impossible. As many unfortunately discovered during the turbulent markets of March 2020, emotions-based decision making can garner some costly results. Often viewing the situation from a distance can reveal the clarity that only an objective look can provide.

 

Families of significant means may have numerous different investments strategies in their portfolios. But are all of these working together?

In today’s markets, a traditional mix of stocks and bonds may no longer be relevant in the context of multi-generational wealth or portfolios of significant size. A key challenge in this environment is how to choose and manage the depth and breadth of investment strategies that have become more common in today’s portfolios. Investment diversity is a fundamental principle for success; but it can also result in plenty of moving parts and can become unwieldly to manage. Investors often have a handful of advisors who are simply left to their own devices to build and manage investment strategies in isolation. Without any cohesiveness, an investor risks inadvertent portfolio concentrations and/or under exposure to certain categories, as well as real tax implications.

And speaking of the tax implications that come with managing multiple portfolios, large investment portfolios may seek exposure to other geographies through sophisticated investment products. This is where understanding the tax structures is critical; ensuring tax leakages are minimized and potential compliance costs are identified. Without this information, a family might make poor or sub-optimal investment choices. A CIO can bring this all under one proverbial roof, ensuring it’s all being overseen  with expertise and a focus achieving your greater goals.

An older couple and their kids on a yacht

A CIO’s job begins with learning and understanding the objectives and aspirations of your family.

The critical role of a family CIO is the development of a trusting and personal relationship. This is a crucial part of the process. Understanding the goals for the family’s wealth is important, but so too is understanding the nuances of other factors that determine these goals. By collaborating with you and your family, the CIO is then equipped with the ability to take a holistic approach to helping you achieve your objectives and at the same time ensure that the family’s other advisors (e.g., legal, tax, etc.) are operating in unison. That’s how you and your family gain the strategic oversight that reflects your values with rational, objective decision making.

In addition to collaborating with your family’s other advisors, the CIO may have active oversight of your investments. Not only does this relieve a significant, and often stressful, part of your wealth-management efforts, it ensures that your portfolio is constructed to maximize the chances of delivering the performance required to meet your financial goals. An appropriately registered CIO has a fiduciary responsibility to work solely in the interests of you and your family. There are no outside influences, such as commissions, or other conflicts of interest that have the potential to detract from that. Along with their strategic expertise, standard measurements are employed that ensure transparency and objectivity with their evaluations. From there, they’ll provide you with consolidated reporting that includes an analysis of all your investments, including how the components of these work within the greater management of your family’s wealth and their individual performances. And then, together, adaptations or course-corrections can be decided upon and addressed by your CIO, on your behalf.

 

An open-source approach to investing with enhanced access.

Enhanced access to the full investment spectrum is another appealing aspect of  having a personal CIO from Richter. With an open-source investment approach, there really is no limitation to what your CIO could recommend. If it suits your objectives and meets the established parameters, then it can be included in the mix. But where the real benefit lies is through the influence Richter has. For example, consider a fund that suits your needs perfectly has a $20m investment minimum. As a lone investor, that may be prohibitive. Having Richter working for you means you have easier access by piggybacking on its collective allocation power and potentially benefit from lower minimums, lower fees, or both. That has the power to expand your family’s investment horizons.

 

What’s your next step?

  • Managing your family’s wealth with the expertise and oversight of a Personal CIO can help you maximize your investment performance while minimizing the risk, stress and tax implications that can go along with it. Learn more about Richter’s holistic investment strategy.
  • Reach out for more information or call us at 514.934.3400 in Montreal or 416.488.2345 in Toronto.
  • Meet Greg Moore, one of our partners and leading advisors in the Personal CIO space.

 

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