Why Is the Wealth Management System of Kings and Titans Unknown? Abernathy Group II Family Office Announces Ongoing Commitment to Educating Investors

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Royalty, family dynasties, titans of industry and self-made billionaires like Oprah Winfrey and George Soros wouldn’t do without them. Those among the nation’s wealthiest seek them out. The Family Office, a long-employed system of integrated wealth management to oversee the family fortune, may be the greatest idea you've never heard of.

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"How many times are these firms going to try to convince the naive investor that someone selling something has the buyer’s best interests at heart?” Brian Luster, CEO and co-founder, The Abernathy Group II Family Office

Ironically, while the Family Office has been around for centuries, most people outside of financial services and the world’s wealthiest people (i.e., “the 1%”) have never heard of it. The Abernathy Group II Family Office proudly announces their dedication to bringing investor education to their members and the general public. It was estimated in August 2011's Investment News that top wealth management firms retained $477 billion in investable assets—within their family offices. “There’s a disconnect in the public’s perception of who they believe to be expert money managers versus those who truly are,” says Steven Abernathy, Chairman and co-founder of the Abernathy Group II Family Office.
“Many investors who are eligible to join a family office don’t do so simply because they are unaware this option exists, or, they think $100 million is required to join one; that’s simply to true.”

Today those who have as little as $1 million dollars can join. Still, investors continue to heed advice from non-experts, which, however well-intentioned, may be detrimental. Abernathy asserts that when a client’s financial decisions, product purchases, and tax decisions are unrelated, the consequences may not seem obvious, but, they may greatly affect one another—and in some cases be quite costly. This model, which many use, is what he calls “everyman investing.” Prudent advice must take into account for legal, tax, and estate planning implications or choices made could do as much harm as good.

Even when a qualified financial planner, personal banker, CPA and an attorney are employed, this may not be enough. When an investor metaphorically is at the epicenter of a circle, with all of his or her “people” vying for attention, with no organized integration, the consequences could be damaging. Each person has their own agenda and, in most cases, they are all trying to sell something. Nobody in this scenario has any real understanding of how one investment affects the other.

Adds Brian Luster, CEO and co-founder, "It’s fascinating how salesmen continue to get away with calling themselves not only salesmen, but vice president, financial adviser, and investment adviser. How many times are these firms going to try to convince the naïve investor that someone selling something has the buyer’s best interests at heart?”

According to the College for Financial Planning 2011 Survey of Trends in the Financial Planning Industry, 70% of folks who call themselves financial advisers generate their primary income from commissions, sales charges, and fees. Some of them haven’t really been working in the industry for very long and may come from sales jobs. The survey also found that only 12.5% of all financial advisers are actually Registered Investment Advisers (RIAs), and even fewer have been professional investors. Luster ads, “You want to find a properly licensed professional who has a track record—someone whose work has been audited by an independent accounting firm.”

With the plethora of choices afforded to us in the 21st century landscape of wealth management, how is it possible to “keep up?” Abernathy and Luster argue that it is imperative to be aware of the implications of your financial decisions and effectively prepare the next generation. Here’s how:

  •     Asset protection. Legal asset protection strategies are often misunderstood; however, they can be powerful insulators from liabilities.
  •     Risk assessment. Do you know how much risk is really in your portfolio? You should.
  •     Education. When kids learn about money from an early age, they appreciate what it does and how it works.

Responsible wealth management includes understanding the keys to preserving wealth as well as growing it. The biggest change in financial services over the next 25 years will be the massive movement away from brokerage firms where commissions and non-fiduciary relationships are standard, to Family Offices where a team of experts with no conflicts provides research and alternatives that are solely in your family’s best interest.

Steven Abernathy and Brian Luster co-founded The Abernathy Group II Family Office and the country's first Physician Family Office (PFO). The Abernathy Group Family Office sells no products, receives no commissions, and is independent, employee-owned, and governed by its Advisory Board comprised entirely of thought-leading professionals. They are regular contributors to several publications and blogs.

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