by kschwok

Frequently Asked Questions


General Questions

What is a Family Office?

A family office is an organization a wealthy family sets up by hiring a wide range of professionals across multiple disciplines – taxes, estate planning, accounting, bookkeeping, investing, etc. – to work for them and help them manage and execute their wealth management activities. By hiring a dedicated team of individuals, a family ensures that only their agenda is driving all of the activities. Many family offices manage budgeting, insurance, charitable giving, family owned business, wealth transfer, family governance, reporting and data aggregation and tax functions for the family they serve. Establishing a family office can be a costly endeavor though.

Advise and supervise the implementation of the investment strategy

We represent the client and maintain on an ongoing basis contact with banks, portfolio managers and trustees to monitor the implementation process and obtain on-going updates. We will challenge the asset allocation or investment strategy when necessary.

How do I know if my advisors have a financial conflict of interest?

There are several ways you can assess whether a firm has a financial conflict of interest.  First, find out how they are paid.  A truly independent advisor is paid only by the client, without incentives or commissions paid by affiliates, money managers or other outside service providers. An advisor that does not receive money from sources other than the client minimizes or eliminates financial conflicts of interest with the client.  Such an advisor is much more likely to  provide advice because it is in the best interest of the family, not because they stand to receive a commission for selling a particular investment product.

What’s the difference between a family office, my private bank, a wealth advisor, and an asset manager?

The difference is independence. Family offices ideally are not affiliated with any bank, financial institution or asset manager. The advice they provide is strictly objective and without the conflict of a sales mandate or a financial interest in selling particular financial products or services.  A wealth manager comes in many legal forms  – private bank, trust company, brokerage firm, family office, multi-family office, financial planner, etc.

Will I have more work to do if I hire a non-discretionary advisor?

No, you will not. While we insist on keeping your family involved in the critical decision-making around your wealth management, we also play a critical role in execution by handling administrative tasks and supporting you in the implementation of your specific wealth management mandate.

Because our advisory model is based on the premise that clients should be engaged in their wealth enterprises, we do not take discretion over your assets.  We help you establish your wealth management priorities and objectives, and then execute on your behalf. You can be involved in the details of managing your wealth as much or as little as you like – but you keep the authority to make the critical decisions.

What’s the difference between discretionary and non-discretionary asset management?

Discretionary management typically means that your advisor is authorized to act on your behalf regarding the execution of your wealth management mandate. Your advisor has the authority to make decisions regarding your investments, financial planning and wealth planning without receiving your explicit permission.  Often in these types of relationships, clients become passive participants and lose touch with the day-to-day management of their wealth.

We believe clients should be active participants, always engaged and constantly learning.  We are non-discretionary advisors to our clients because we want to help not only to manage their wealth, but to provide them with the knowledge they need to make critical decisions – now and in the future.


Working with Lucid Investments

How are you paid?

We are paid only by our clients.  Since each family is different, each wealth enterprise is unique – and as such, each family’s service is customized. Our preferred method of pricing is a flat fee that takes into account the specific nature of your wealth enterprise and the scope of services you need from us.

Do you charge commissions?

No. Our fee structure is simple: we are paid by our clients and only by them.  It’s transparent. Simple. We are not paid any commissions or incentives by any manager, service provider, or financial firm.  We do not charge ‘extra’ for this, or ‘more’ for that. You pay only the fee we agree to.

Do I have to change banks?

There is no need for you to change banks. As your advocate, we work with each of your service providers to be sure they are working toward your best interests. Through consolidated reporting, we review transactions, confirm pricing, review commissions, identify errors and see that what you agreed to pay is what you are being charged.

Do I need to leave my current financial service providers to work with you?

There is no need for you to leave your current financial service providers. Our mission is to enhance and optimize your wealth management by helping you to build your wealth enterprise. We understand that, at your level of wealth, you need a multitude of financial services providers, and that you find value in those relationships. We work with your financial services providers to make sure the services they are providing are in your best interests, and are priced appropriately.

It’s not about us, it’s about you – we work with you and your family in the way it will benefit you the most.

 


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