Press Releases issued by the Academy, by members and partners in 2008-2009 appear below.
Press Releases generally approved for release on the association websites include:
If you have a press-release you would like displayed on the member's website, please submit to firstname.lastname@example.org.
July 20, 2015
Family Owned Businesses are Different.
The traditional approach to dealing with Family Owned businesses is to assume that they are driven in the same way that conventional businesses are driven. Adam Smith, author of the seminal treatise “An Inquiry into the Nature and Causes of the Wealth of Nations (1776), referred to maximising owner’s wealth. Other great economists such as Nobel Laureate, Milton Friedman, also espoused the concept of maximising shareholder wealth and hence it has become an accepted idiom that this is the goal of a firm. Because of this general acceptance, advisers, including lawyers, accountants and financial planners, have all assumed that this is the case and that all firms act in the same rational manner.
Research indicates that this is not always the case. A study conducted by the Monash University Centre for Accounting Research, Characteristics of Family Owned Businesses (Baring, 1990) asked the following question:
“If you had a vacancy in your firm (family owned) and a member of your family was unemployed. Would you employ the family member even though his/her skill set did not match the vacancy”?
The initial response to this question had 24% affirmative and 76% said they would not employ the family member. The research group felt that this response was counter intuitive and went back to a sample of respondents. The respondents affirmed their initial response but then added a rider which was, “that is, unless the family member could not get a job elsewhere, then of course we would employ them. In addition we would probably employ another person to support them”. Hence the concept of wealth maximisation ceases to be the primary objective of the family firm in many instances (more than 50% in this research). As private companies represent more than 98% of all businesses and more than 50% of all private companies are family owned it is indicating that investment strategies based on the concept of wealth maximisation may be inconsistent with the true objectives of a family owned business. Although many small firms are family owned businesses there are also many large and public listed companies that are also family owned/controlled.
What Does this Mean for Advisers?
The primary consideration is that any adviser that treats a family business as if it is a conventional business with wealth maximisation as the primary goal may get things entirely wrong. Every family owned business is unique and there is no “one size fits all” solution. Advisors need to adopt the approach of “knowing your customer” (KYC) and that includes all aspects of their business. The advisor needs to understand the various roles of family members in, or with the potential of being in, the business. He/she needs to know the succession plan, the financial plan, the estate plan all of which are important roles of the wealth planning process but are not, in themselves, wealth planning. This point is not clearly understood as it is common for a legal adviser, for example, to advise a family business client about estate planning assuming that this is all that is required for wealth planning. Estate planning, as are the other elements mentioned above, is a critical element of wealth management but is not, in itself, wealth planning.
The solution for family business advisors is clear. Do not assume that a family business will, or wishes to act as a conventional business. In order to provide sound advice the advisor should ensure that he/she understands the dynamics of the business and then adopts a holistic approach to addressing the wealth management issue in order to do justice to the important role that the client is assigning to you.
June 17, 2015
With our continuing expansion the IABFM is opening new offices in a number of locations, either as standalone offices, or in conjunction with some of our business partners. Most recently we have relocated our Hong Kong office to the International Commercial Centre (ICC) building in Austin Rd, West Kowloon. The ICC is the tallest building in Hong Kong with magnificent views over Victoria Harbour.
Demand for our Wealth Management programs in China has led to the opening of an office in Beijing to support our existing office in Shenzhen. We are located with our partner, the Regal Global Group (RGG), at the Red Show International Club, 4 Guanghua Rd, Chaoyang, Beijing. This presence will make it easier for us to serve the Beijing market where we have just finalised an arrangement with one of the most prestigious universities in China. This arrangement allows the university to use some of the content of our Certified Wealth Management Professional and Certified Family Wealth Professional programs as part of their graduate programs. Graduates of the university may then complete some additional modules to obtain the IABFM qualification(s). We are also in the process of finalising details of a special accreditation program for 3000 professionals each year which will be announced in the next two weeks.
We have decided to consolidate our US presence in New York given that it is one of the major financial centres in the world. As from next week we will be operating from our newly established office with our partners RGG. Our New York office is located at 1330 Avenue of the Americas, Suite 23, New York City NY 10019. The major initial focus of our activities is in the area of Wealth Management with our award winning Certified Wealth Management Professional and our Certified Family Wealth Professional training programs already creating high demand.
Last, but certainly not least, the IABFM has opened an office at 50 Collins St, Melbourne in Australia to support operations in the Asia Pacific region. In 2014 we successfully trialled a number of programs in Australia and, on the back of these, have opened the offices to support the Australian manufacturing industry, particularly with our new logistics modelling programs. Dr Michael Fletcher, the Director of our logistics and supply chain programs, is launching this program next month and it will revolutionise the way that companies manage their supply chain.
June 4, 2015
CPD Certification Service
Participants at IABM training sessions can often claim the time at the program as part of their professional development or they may be sponsored by their organisation. However, it can be a hassle to provide all of the requisite documentation to show that the program conforms to professional development requirements.
In view of this sometimes onerous task we are pleased to advise members that the IABFM has become a member of the CPD Certification Service. We are in the process of having most of our programs certified for Professional Development purposes. This means that attendees at any of our programs that carry the CPD certification will be able to claim CPD professional development points for attending the program. As most professional bodies require some form of continuing professional development our membership of CPD will make it easier to claim these professional development points. So at the time of receiving your membership pack you will also receive a letter from us indicating that the program you have just completed was assessed by the CPD Certification Service as qualifying for CPD recognition.
Programs that have been certified will have the CPD logo on any advertising as shown above.
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