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• Is a Family CFO the Right Solution for Your Complex Wealth Management Needs

Is a Family CFO the Right Solution for Your Complex Wealth Management Needs?

written on December 01, 2011 by Frank Fantozzi

 

Do you find that you never seem to have all of the information and advice you want, when you want it? Is your financial information in multiple locations and never easily accessible to you?

Do you feel there is no single firm that has a complete grasp of your entire financial picture? Is your family’s planning taking place in a vacuum, with no coordination among your advisors?

Are you receiving adequate information to make clear and confident decisions? Are decisions made on a reactive versus a proactive basis?

Do you and family members work and play hard with little time left for dealing with important financial matters?

Most importantly, do you feel that your needs and those of family members are really understood by your current advisors?

Everyone seems to have someone they refer to as their financial advisor. Yet many describe their relationship with this individual as “okay” or “good” instead of an impassioned: “I’d be lost without my advisor’s guidance!”  Often, the problem is simple. They do not have the right advisor or team in place to handle the complex needs of their family.

The financial planning world has low barriers to entry so many who call themselves financial advisors often lack required qualifications and credentials, or don’t possess the economic and business experience to truly help families navigate today’s interwoven world of investments, tax planning, insurance, estate planning, banking and everyday financial management. And that is just the easy part. The real trick is integrating all these technical areas to generate important intangible benefits that lead to happiness, fulfillment and creating memories with the people you value most in your life.

A Personal CFO is an advisor who coordinates and manages family finances or a "Family Office.” While a Personal CFO can help orchestrate the financial well-being of your entire family, how do you know if a Personal CFO is right for you?

What Can a Family CFO Do for You?

1. Coordinate all financial management under one roof
2. Reduce the ambiguity that is found in most financial plans
3. Help ensure that all members of the financial team are working in unison
4. Improve the timeliness and effectiveness of your planning advice
5. Create a roadmap that provides all family members with clarity around their vision
6. Take the mystique out of financial management so it is understandable while reducing surprises and worries
7. Keep the family on task so goals are met
8. Educate the next generation on how to deal with money
9. Develop a plan for the type of legacy the family wants
10. Provide an environment where families remain in control with full knowledge of the options available to them, providing more time to focus on other important concerns like relationships, leisure activities or the family business
    

While deciding to hire a Family CFO may at first seem intimidating, it is not unlike hiring an attorney or CPA firm. Family CFOs are typically compensated on a retainer basis for their financial management services. If they are also responsible for investment management functions, an additional fixed fee or asset fee will be charged.

Questions to Ask When Interviewing a Family Office advisory firm or Family CFO:

1. What is the scope of your services?
2. What is your professional background…education, professional credentials, areas of expertise and affiliations?
3. How are you compensated?
4. Are you an investment sales representative or an investment fiduciary? Do you accept fiduciary liability for your advice?
5. Do you provide an engagement letter in advance, outlining the full scope of services and fees?
6. How do you achieve full transparency as it applies to fees, services, advice, account access and reporting?
7. Can you provide examples of reporting, use of technology and communications?
8. Can I meet all of the team members I will be interacting with in advance?
9. Can you provide references?
10. How do you plan to make a measurable difference for me and my family?

It’s also a good idea to check with the Better Business Bureau, FINRA, SEC and appropriate state securities regulators for any complaints or legal actions against the advisor or firm. Most of this information can easily be found by checking the appropriate agency or regulatory websites. 

For busy, affluent families, especially those juggling the multiple competing priorities that come with running a family business, a Family CFO or Family Office advisor can be a good solution. A Family CFO can organize and coordinate your financial life and help ensure you remain on track toward your goals.

Consider the benefits to you and your family along with the sense of control and clarity this solution can bring. And remember, greater peace of mind extends well beyond your financial goals into other important aspects of your life and relationships. That’s reason enough to take steps now to reduce stress, gain clarity and begin to improve your overall sense of well-being.

Frank Fantozzi is President and CEO of Planned Financial Services.  Frank is an accredited Personal Financial Specialist, a CPA with a Masters in Taxation, Accredited Investment Fiduciary and a Certified Divorce Financial Analyst.  Frank believes that achieving your goals and dreams does not happen by simply handing over control of your assets and your future, but in part by ensuring your unique voice is heard and your vision reflected in every decision. This philosophy helps to shape your unique Return on Life™, an individually-defined measure of success that goes well beyond investment performance.  Frank can be reached at 440-740-0130.

Securities offered through LPL Financial. Member FINRA/SIPC.