Professional Documents
Culture Documents
(To accompany the Principles of Wealth Management for Private Wealth Holders)
Whenever used in the Principles and the Standards the term:
Wealth Holder may include:
An individual of wealth;
Trustees of a trust;
Directors or trustees of an eleemosynary (foundation, operating charity, or endowment), or
corporation (partnership); or
Any person holding substantial wealth as a legal owner under the laws of the jurisdiction
involved.
Wealth is intended to include the investable assets and portfolio(s) of the Wealth Holder.
Standards Director is intended to define the representative appointed by the Wealth Holder(s) to be
responsible for the management of the Wealth in accordance with the Principles and the Standards. The
Standards Director may be the Wealth Holder or a member the family. It is expected that the Standards
Director will prudently delegate whenever the Director lacks expertise, or capacity, in a particular
Standard. The Standards Director may serve in the capacity of an agent, steward, or fiduciary; and will
likely be drawn from one of the following professions:
Law;
Accounting;
Investment management;
Banking; or
Investment consulting.
Investment Manager is intended to include not only a person managing a separate account, but also a
person managing a mutual fund or a commingled trust.
Service Provider(s) is inclusive of family office staff, attorneys, accountants, Investment Managers,
investment consultants, custodians, and any other advisor providing investment-related services.
The Standards are written to have global applicationno matter where the:
Wealth Holder(s) is domiciled or residing; or
Wealth is held in custody or located.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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Risk management
i.
Financial risks
ii.
Governance risks
iii.
Hazard risks.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 2:
The Standards Director:
a. Defines in writing the roles and
responsibilities of the Wealth Holder, and
others providing advice to the Wealth
Holder; and
b. Confirms that each Wealth Holder, and
others providing advice to the Wealth
Holder, demonstrate an awareness of
their roles and responsibilities.
STANDARD 3:
The Standards Director defines in writing
fiduciary best practices to be followed by all
persons serving in a fiduciary capacity.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 4:
The Standards Director:
a. Ensures that succession plans are in place
for the Wealth Holder;
b.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 5:
The Standards Director:
a. Defines in writing an asset allocation and
investment strategy for the management of
the Wealth that is consistent with:
i.
Risk tolerances;
ii.
iii.
Mission-based or philanthropic
objectives (if defined in Standard
1);
iv.
v.
vi.
Rebalancing guidelines.
STANDARD 6:
The Standards Director ensures that, for each
portfolio, there is defined in writing an
investment policy statement that includes
monitoring criteria.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 7:
STANDARD 8:
Attorneys; and
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 9:
The Standards Director defines a process for
selecting Investment Managers, which includes,
as a minimum, the following due diligence
screens:
a. The Investment Manager has a defined
investment strategy that is consistent
with goals and objectives (Standards 1
and 5), and can be understood and
explained to others by the Wealth
Holder, or the Standards Director.
b. The Investment Manager has a defined
investment strategy that can be
monitored by the Standards Director.
c. The same investment management team
has been in place for a period
commensurate with the period of the
performance evaluation.
d. Securities in the Investment Managers
portfolio are consistent with the stated
investment strategy.
e. Investment performance has been
verified by an independent third-party,
and compared to the Investment
Managers peers.
f.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 10:
The Standards Director defines a process which
flags and limits investments with any Investment
Manager:
a. Who does not provide complete
transparency of their investment holdings;
b. Is investing in illiquid assets; or
c. Whose fund or program is not transparent, or
is illiquid.
STANDARD 11:
The Standards Director defines a process for
evaluating custodians and broker-dealers, which
includes, as a minimum, the following:
a. As a best practice, custodians are
independent of Investment Managers,
except as may be required by trust law,
or by the necessity of employing a
commingled investment vehicle.
b. Custodian can provide appropriate
security of assets, with insurance or
otherwise.
c. Custodial statements provide sufficient
detail that the Standards Director can
monitor the Investment Managers best
execution of trades (generation of soft
dollars).
d. The expense ratio of the custodians cash
sweep and money market fund is
compared to peers.
e. The ability of the custodian to provide
investment performance reports and tax
reporting.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 12:
STANDARD 13:
STANDARD 14:
The Standards Director periodically reviews
compensation agreements and service
agreements of Service Providers to ensure that
they do not contain provisions that:
a. Conflict with goals and objectives
(STANDARD 1); and
b. Are based on short-to-intermediate-term
(less than five years) investment results.
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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STANDARD 15:
The Standards Director defines in writing an
ethics statement, and periodically checks for
conflicts of interests. The ethics statement
requires all persons involved with managing the
Wealth to:
a. Annually acknowledge the ethics statement;
and
b. Disclose all conflicts of interest as they
become known.
END OF STANDARDS
Charles Lowenhaupt
Lowenhaupt Global Advisors
cal@lowenchas.com
(314) 241-5950
Global Standards for Private Wealth Management Copyright 2009, Strategic Ethos. All rights reserved.
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