Integrated wealth management

Integrated wealth management is a fusion of the three distinct but interrelated functional areas outlined below.

Each is critical but, on its own, insufficient for overall success.  These three dimensions pose unique management challenges requiring specialized attention. While such specialization is critical, it’s equally important that their interconnectedness is not lost in management silos. More than anything, the mission of the family office is to coordinate these sometimes disconnected activities and ensure that at all times the whole for the family is greater than the sum of the parts.

Wealth planning services

The scope of wealth planning needs varies by family but in all cases, the process culminates in a goals-based investment policy focused on maximizing the probability of achieving the family’s goals.

Wealth planning services are provided on a fee-for-service basis. It’s not necessary to be an investment management client to use our wealth planning services.

The first phase of wealth planning begins with a discovery process to help us gain a deep understanding of the dreams, fears and available resources of our families.  We translate this understanding into a dynamic financial model that informs the next phase of work where we help families align their resources in service to their life.  This is a highly interactive and ongoing process that is constantly fine-tuned and adapted to your ever-changing financial life.

The second phase applies a proprietary Goals-Based Asset Allocation framework to align the family’s resources with its goals.  Again this is a highly interactive process that not only ensures resources are deployed to maximize the probability of achieving goals but also ensures you clearly understand and identify with the resulting investment policy.  Families that don’t understand and identify with their investment policy are unlikely to sustain it in the long run as doubt and confusion inevitably creep in.

On its own, wealth planning is a necessary but insufficient condition for success.  The probability of achieving goals is increased through this process, but even the best-conceived plan can fail without equally disciplined implementation.  For this reason, most of the families we serve also subscribe to our investment management implementation services.

Investment management services

The adage that you can’t manage what you don’t measure is critically important in the implementation phase of integrated wealth management. To that end, one of our first priorities is to use data aggregation technology to pull together clients’ disparate data into a unified, accessible, and useable view of their entire wealth to support in-depth analysis and real-time decision making.

Performance reporting evaluates specific investments and accounts across multiple dimensions. Firstly in relation to the absolute requirements of the purpose or goal to which that asset has been assigned. Secondly, investment efficacy is reported against fundamental risk factors also defined in the goals-based investment policy.  Finally, measurement against relevant benchmarks is performed to provide relative performance context.

Maintaining an accurate and fully transparent measure of the full cost of management from all sources is another top reporting priority to help families to make informed relative value decisions.

Keeping investment selection free of conflict of interest is at the core of our investment management services.  Families will ordinarily have a mix of self-managed, externally managed, and family office managed investments.  The fees paid by family office clients are not sensitive to this mix and there is no financial incentive for NCP staff members to alter this in favour of internally managed solutions.

Our history as a single-family office led to the development of direct investment capabilities that we are able to share and that may be of interest to clients. These evolved as solutions to problems we’ve experienced over the years and are an integral part of what makes us different.

Whenever we’ve encountered externally available solutions that we found deficient or too expensive relative to the value provided, we’ve tried to deconstruct the problems and see if we could innovate a solution. When we take on the challenge of designing an internal solution we hold ourselves to a standard that says to be truly innovative a solution must not only be better, it must also increase our ability to manage risk and lower cost.

A handful of internally managed solutions have resulted from this problem-solving philosophy.  They are just one option amongst many that our clients are free to choose from if they perceive them to have merit.  These include core public equity mandates, direct private equity with our institutional partners, and digital assets.

Direct core public equity solutions

We employ disciplined quantamental factor-based methods that permit us to precisely control the fundamental attributes of securities that best serve clients’ varied goals. It’s important to distinguish that these are services, not products.  The quantamental methodology hardwires in a portfolio management discipline that is common to all clients, but the individualized implementation enables a high degree of customization. The bespoke intent explains our preference for direct execution in separately managed accounts (SMA) to enable important additional benefits such as increased transparency and enhanced control of, liquidity, tax awareness and management costs.

Direct private equity solutions

We developed internal capabilities to source and execute private equity investing in response to our disenchantment with typical private equity structures.  We generally find these to be lacking in transparency and control, and too expensive.  As a result, we pioneered a direct PE co-investment model that invites institutional partners to participate alongside our families in NCP-led investments.  The benefits to our families are that NCP is able to remedy the deficiencies of traditional PE structures while still benefitting from the arms-length due diligence that our institutional partners necessarily bring to the table to meet their own fiduciary duty.

Direct digital asset solutions

We recognized long ago the transformative effects digital technologies are having and will continue to have on every facet of life and the economy.  The vast majority of wealth managers today ignore digital assets. This dismissive stance is provably nothing less than a dereliction of fiduciary responsibility and an entrenched blindspot that we find troubling.  It is a fact to say that there’s a non-zero probability that fiat currency alternatives are here to stay and that there’s also a non-zero probability they can be a cost-effective hedge against fiat currency debasement. With those facts in mind, we are committed to ensuring that digital assets are knowledgeably included in investment policy and portfolio construction discussions with our clients.  This asset class is still foreign to most investors and not appropriate for all, but rest assured we have the capabilities to responsibly assist you in determining if and how they should play a role for you.

Family dynamics services

In the context of intergenerational wealth, management of family dynamics is either the glue binds or the critical point of failure that compromises even the best-laid wealth transfer strategies. This dimension of integrated wealth management is overlooked far too often with dire consequences.

The needs of families vary greatly in this area but the minimum offering for all is the performance of a family dynamics audit. Where risks and opportunities are identified by the audit, collaboration with external specialists to provide solutions is both probable and encouraged by the family office staff whose role in the process will be limited to that of independent coordination and oversight.