Wednesday, 23 September 2020

Review of WE Family Offices

Review of WE Family Offices
12 Sep
6:38

Updated on Friday, September 11, 2020

WE Family Offices is an independent registered investment advisor that caters to the wealthy. The firm’s team of nearly 50 employees provides investment advice, financial planning and family office services. The firm has locations in Miami and New York, although most of its clients live outside the United States. It currently has $8.8 billion in assets under management (AUM).

All information included in this profile is accurate as of September 11, 2020. For more information, please consult WE Family Offices’ website.

Assets under management: $8,834,748,220
Minimum investment: None specified but requires a minimum annual fee of $150,000
Fee structure: Fixed fees, a percentage of AUM, performance-based fees
Headquarters: 701 Brickell Avenue, Suite 2101
Miami, Florida 33131
wefamilyoffices.com
(305) 825-2225

Overview of WE Family Offices

WE is an abbreviation for Wealth Enterprise, stemming from the team’s belief that to successfully sustain and grow wealth over multiple generations, families must treat their finances as business enterprises.

The firm dates back to 2000, when it was founded by Santiago Ulloa under the name TBK Investments. Seven years later, a major bank holding company bought the group, and operated it under the GenSpring branding. In 2013, the executive management team took the firm back to its independent roots and renamed it WE Family Offices.

The firm’s three principals — Santiago Ulloa, Maria Elena Lagomasino and Michael Zeuner — as well as other employees, hold ownership interest in the firm’s current owner, WE Family Offices Holdings, LLC. Today, the firm’s team of nearly 50 includes 30 employees who focus on investment advisory and research.

What types of clients does WE Family Offices serve?

WE Family Offices caters to high net worth and ultra-high net worth individuals and families; the firm does not currently serve any individuals who do not meet the SEC’s definition of high net worth individual, which is anyone with at least $750,000 under management or a net worth of at least $1.5 million. While there’s no specified minimum investment requirement, the minimum annual fee that clients typically must pay is $150,000.

Many of the firm’s live outside the United States, primarily in Latin America and Europe. In fact, 67% of WE Family Offices’ current clients live abroad. Thus, the group has teamed up with two international firms — the UK-based investment advisor, Wren Investment Office, in London and the Spanish multi-family office, MdF Family Partners, in Madrid — to share resources and expertise. WE Family Offices has an ownership interest in Wren, and it sometimes shares client fees with MdF.

Services offered by WE Family Offices

WE Family Offices makes recommendations on most aspects of wealthy families’ financial lives. Advisors will weigh in on wealth management and investment strategy topics including family missions and objectives; asset allocation and investment choices; estate and tax planning; and risk management. They will also evaluate your current third party providers and charges. The team can also provide administrative support services, such as reporting and cash flow review.

The firm wants family members to be involved in the management of their wealth. Thus, WE Family Offices provides investment advice only through non-discretionary relationships, meaning clients receive information and advice from the team but must make the final decisions themselves.

Families who don’t yet use the firm for investment management but would like to trial it, or who are simply looking for financial planning assistance, can consider a “wealth diagnostic” engagement. With this service, clients receive an overall review of and plan for the family’s wealth, including their portfolio, providers, ownership structure and goals.

Here is a rundown of services offered by WE Family Offices:

  • Investment advisory services (separately managed accounts; non-discretionary)
  • Financial planning
    • Estate planning
    • Tax planning
    • Risk management
    • Family governance and succession planning
    • Investment manager selection
    • Service provider selection and fee negotiation
  • Family governance and education
  • Administrative services
    • Data aggregation and consolidated reporting
    • Transaction reconciliation
    • Review of cash sources and uses
  • Special projects
    • Multi-jurisdictional holding structures
    • Multi-generational transfer strategies

How WE Family Offices invests your money

Advisors make portfolio recommendations tailored to each client’s circumstances. To do so, they take into account factors such as a client’s time horizon, risk tolerance, asset class preferences, expected returns, taxes, cash flow and liquidity needs.

The team only recommends unaffiliated investment managers and funds to implement its asset allocation and investment strategy recommendations. In general, the team advises clients to choose from a wide variety of active and passive strategies including mutual funds, exchange-traded funds (ETFs), hedge funds, venture capital funds, real estate investment trusts (REITs) and venture capital funds or other private funds, as well as separate account managers.

For outside manager recommendations, the team relies on its approved list of investment managers determined based on various qualitative and quantitative factors, including performance, philosophy, management continuity, reputation and fees. The firm also relies on the unaffiliated consultant investment advisor, LCG Associates, to provide asset allocation and investment manager selection information and advice to the team.

WE Family Offices also assists families with values-based investing if the client would like to factor in environmental, social and governance issues into their investment choices.

Fees WE Family Offices charges for its services

WE Family Offices prefers that clients pay a flat annual fee that’s agreed upon in advance. However, some clients instead pay a fee based on a percentage of assets under management. The asset-based rate typically ranges from 0.45% to 1.50%, depending on factors such as the amount invested.

The standard fee schedule for clients who pay a flat annual fee is as follows. Note that the minimum annual fee charged by the firm is $150,000.

WE Family Offices Flat Fee Schedule
Net Worth Annual Flat Fee
$50 million to $250 million $250,000 to $500,000
$250 million to $500 million $500,000 to $700,000
$500 million to $1 billion $700,000 to $1 million
$1 billion or greater $1 million and more

On top of these advisory fees, clients pay their own custodian and brokerage fees. The firm does not offer wrap accounts, which bundle those fees with the advisory fee. Clients are also responsible for third-party investment manager fees, including mutual fund, ETF and other private manager fees, which typically range from 0.10% to 5.00% of assets per year.

Clients interested only in standalone financial planning assistance can opt for the “wealth diagnostic” engagement, which carries a fixed fee of $50,000 to $100,000.

WE Family Offices’ highlights

  • Fee-only: WE Family Offices is a fee-only firm, meaning it earns money strictly from the fees its clients pay. None of the firm’s revenue comes from selling certain products or investments, removing financial incentives that could create potential conflicts of interest.
  • International expertise and alliances: With more than half of the firm’s clients living abroad, the team has experience with the complexity that comes with international jurisdictions and structures. Additionally, the group can tap the resources of its alliance firms in Madrid and London.
  • Focus on environmental, social and governance issues: The team at WE Family Offices can help clients factor specific values into their investments. What’s more, the team also focuses on certain values in its own business. WE Family Offices has earned the B Corporation status, which means a third party externally validated that the firm balances profit and purpose by taking into account issues such as social and environmental performance, public transparency and legal accountability. Potential clients can learn more about the firm’s B Corporation status here.
  • Industry recognition: The firm has made the list of the industry’s top registered investment advisors from publications such as Financial Advisor magazine and the Financial Times. The factors considered in these rankings include assets under management and compliance records.
  • Clean disciplinary record: The firm has no material disciplinary actions to disclose. See more below.

WE Family Offices’ downsides

  • Caters to the ultra-rich: With a $150,000 minimum annual fee, only the world’s deep-pocketed individuals have access to WE Family Offices services. In a further indication of the firm’s exclusivity, the lowest tier in its published fee schedule is for clients with a net worth between $50 million and $250 million, with the top tier addressing rates for clients with a net worth of $1 billion or more.
  • Limited geographic footprint: WE Family Offices only has offices in Miami and New York. Clients who live elsewhere but prefer to regularly meet face-to-face with their advisors should explore other options. That being said, the firm does have experience working with clients abroad.
  • No hands-off relationships: Clients hoping to largely free themselves of the decision making around their wealth management may want to look elsewhere. The firm only works with clients on a non-discretionary basis, meaning it provides advice and guidance but leaves the final say to the client. Although the firm can fill out the trade instructions, clients should expect to sign off on every trade.

WE Family Offices’ disciplinary disclosures

WE Family Offices lists no disclosures over the last 10 years, giving it a clean disciplinary record. Registered investment advisors are required by the Securities and Exchange Commission (SEC) to disclose on their Form ADV any legal or disciplinary actions against the company, an affiliate or an employee that would be material to a potential client’s evaluation of the firm or the integrity of the management team.

WE Family Offices’ onboarding process

To contact WE Family Offices, fill out the contact form provided on the firm’s website or call the Miami or New York office, depending on your location. Potential clients can also find a wealth of information about the firm’s services, fees and philosophies on its FAQ page.

Once established as clients, the firm says your advisor will regularly be in touch. Clients can expect to meet with their advisor at least quarterly to discuss their portfolio. Every year, advisors and the senior management team sit down with clients for a comprehensive review.

Clients choose their own custodians, but the team can recommend one if requested.

Is WE Family Offices right for you?

WE Family Offices is focused on serving wealthy individuals and families. Families with a presence outside the United States may find the firm’s resources and knowledge around serving international clients particularly attractive. Families looking to be involved in their wealth management may like that the firm leaves control of the accounts to the clients through non-discretionary relationships.

Investors who don’t have a high net worth, however, as well as those who want to meet in-person with their advisor but are located outside of Miami and New York, may consider looking elsewhere. Many different types of investment advisors exist, and it is the client’s job to find possibilities appropriate for their unique needs.

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Source: https://www.magnifymoney.com/blog/investing/we-family-offices-review-ria/

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