Streamlining Family Wealth Management
Contents
Executive Summary
This case study delves into the successful partnership between HK Partners, a professional financial services firm, and a wealthy family comprising two generations with a combined wealth exceeding $110 million.
The family faced challenges following the passing of the patriarch, who had previously managed the family's finances. With the matriarch inheriting the wealth but lacking financial experience, and the adult child being time-poor due to personal business commitments, HK Partners stepped in to provide full-service family CFO services, investment management, tax and compliance solutions, inter-generational wealth transfer advice, and more.
Through a structured approach and ongoing advisory, HK Partners helped the family achieve their goals while ensuring smooth financial operations and optimised wealth growth.
Introduction
Managing substantial family wealth requires expertise, time, and a comprehensive approach. In this case study, we explore how HK Partners successfully addressed the financial challenges faced by a wealthy family following the passing of the patriarch.
By providing personalised financial solutions, HK Partners assisted the matriarch and the adult child in managing their financial affairs, enhancing investment strategies, ensuring tax and compliance obligations, and facilitating inter-generational wealth transfer.
Understanding the families' needs
HK Partners initiated an extensive meeting process involving key family members and the retiring private family accountant. This allowed them to gain a comprehensive understanding of the family's dynamics, key issues, and goals.
The firm then mapped out a client journey over different timeframes, collaborated with the family to refine their goals, and prioritised action points accordingly.
Additionally, a thorough review of tax and compliance requirements was conducted, leading to fixed pricing engagements for these services.
Investment Management
To optimise investment strategies, HK Partners introduced the family to three institutional investment advisors with whom they had a strong working relationship. Assisting the family in engaging with the chosen advisor, HK Partners managed the onboarding process.
The institutional investment advisors conducted a comprehensive review of asset allocation, making recommendations for changes.
HK Partners provided valuable input from both tax and structuring perspectives. They also ensured smooth administration of investment portfolios by obtaining appropriate powers of attorney for the matriarch and investment entities.
Real Estate Portfolio Management
HK Partners took over the management of the family's existing commercial and retail real estate investments. Acting as the finance function, they handled various tasks such as rent collection, payment of outgoings, negotiations with tenants, and liaising with property tax lawyers and specialists.
Personal Insurances
Recognising the importance of risk management, HK Partners facilitated a review of the second-generation family members' existing personal insurance policies.
By engaging external risk advisory specialists, they identified significant policy improvements and achieved premium savings.
HK Partners also facilitated the process of obtaining new policies in collaboration with the risk advisors.
Group Structure and Estate Planning
A detailed review of the existing group structure was conducted to assess tax and compliance efficiencies. HK Partners worked closely with the family to align the structure with the matriarch's intentions for inter-generational wealth transfer and tax-efficient cash flow.
A strategy was prepared to restructure the group, taking into account all tax implications.
Additionally, specialist tax and estate planning lawyers provided advice to effect the restructuring and update estate planning documents.
Ongoing Tax and Compliance
HK Partners transitioned the family's management accounting for self-managed super funds (SMSFs), investment companies, and investment trusts to live,
purpose-built software. This transition enabled real-time reporting, improved family cash flow management, facilitated comprehensive asset allocation insights for investment advisors, and provided deeper tax planning capabilities.
HK Partners ensured the family's quarterly and annual tax and compliance obligations were met across various entities.
Ongoing Family Advisory
To maintain effective communication and collaboration, HK Partners established quarterly family board meetings with a structured agenda. These meetings included family members, investment advisors, and other specialists as required.
By facilitating these sessions, HK Partners ensured proactive decision-making, comprehensive oversight, and ongoing alignment with the family's financial goals.
Conclusion
By offering personalised financial services, HK Partners successfully assisted a wealthy family in navigating complex financial matters. Through their expertise in investment management, tax and compliance, estate planning, and ongoing advisory, HK Partners streamlined operations, optimised wealth growth, and supported inter-generational wealth transfer.
This case study highlights the importance of comprehensive financial solutions and the value of a trusted partner in managing significant family wealth.