Billionaires - architects of wealth and legacy

There are times in history when it has been possible to take exraordinary wealth not seen for long stretches of a century. The majority of today's billionaires have made their wealth in the past 20 years. This has been called the 2nd Guilded Age, much like the beginning of the Industrial Revolution.
Leveling off is occurring now.
The characteristics of billionaires is the ability to take risk, to have the tenacity to keep going and the ability to scale up or grow the business. If they do not have the skill to grow the business, to be able to partner with someone who can grow their enterprise.
Legacy is important.
Over two thirds of billionaires are over 60.
Without clear and sensible governance, wealth can dilute rapidly. These wealthy individuals seek out wealth experts from the world's largest and longest run financial institutions. Planning and structuring are critical and it is a specialized expertise.
Some billionaires are setting up family offices which are like private equity organizations in how they run their investments. Again, these use the platforms of large global banks in order to achieve a truly diversified portfolio.
Philanthropy is very important
Over 100 billionaires have pledged half of their wealth to philanthropic causes. Again, true wealth management has a deep expertise in the philanthropy of their clients which can pass along the lessons to the next generation.

For more information, contact Jacoline Loewen.
Twitter @jacolineloewen

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities and Advisory services offered through  a Registered Investment Advisor.

Sustainable Investing - Jacoline Loewen

Jacoline Loewen with the UBS Bank team on Sustainable Investing.
UBS Bank team presenting Sustainable Investing.

For those with $2M to Invest

For those who are wondering why you need a Swiss bank to manage your wealth - here is an useful excerpt from Financial Review:
UBS manages more than $1.6 trillion of private client money globally. Advisers at the private bank also give strategic financial advice on structuring investments, philanthropy and establishing family trusts and self-managed superannuation funds.


Each month, a global team of more than 900 analysts, asset managers and investment bankers, led by UBS global chief investment officer Alex Friedman, work together to review the world environment, assess the short and mid-term outlook and make high-level calls on what asset classes, and in what proportion, clients should be advised to invest.
Part of the review process is devoted to bouncing ideas off the chief investment officers of major global fund managers, such as BlackRock, Pimco and Aberdeen Asset Management. Those businesses are key partners of UBS and their views and experience lend a different perspective that helps with decision-making. “Our view is that asset allocation decisions are critical for the long-term performance of your portfolio," Chisholm says.
“First we have a robust investment process, to define broad asset allocation, and then we modify it for local conditions in each country. For each asset class we recommend investments or securities for the client."
Investment suggestions are based on research by analysts based around the world, as well as in Australia. Chisholm says local knowledge on a wide variety of global markets is a key part of the bank’s offer. Having an internal team that conducts all the research means advisers are confident they can vouch for its quality, he adds.
Research covers international stocks, bonds, foreign exchange and other asset classes. “We can offer our clients deposits or loans in up to 16 currencies around the world," Chisholm says.
“That’s a huge advantage in this environment, where you may want to invest internationally in certain securities or markets but if you can’t manage your foreign exchange position at the same time you may be exposed to risks you don’t want."
Clients are sometimes invited to speak directly to the research experts or participate in global and regional forums. The private bank offers its clients access to one-off investments, such as pre-initial public offerings and whole commercial properties sourced from the investment bank and other wealthy clients who wish to sell.
In Australia, UBS can help some investors buy debt securities, such as corporate bonds, in parcels of $100,000, which Chisholm says few other local wealth managers can offer.


The service is upmarket and won’t appeal to everyone. It targets people who have more than $1 million to invest. Generally, below that level, investors are more likely to be interested in domestic equities and cash.

Managing the expectations of clients of wealth managers

Clients know it all, and want instant satisfaction. 

With the Web putting information at everyone’s fingertips in an instant, advisers face a lot of know-it-all clients. Many clients feel their Internet research makes them more knowledgeable than the advisors are.

Many clients also want instant gratification. Jacoline Loewen says, “We need to recognize this phenomenon and try to set realistic expectations for our clients…regarding the process, timing, potential complications, fees and likely results.”

Jacoline Loewen
LinkedIn profile for Jacoline Loewen

The sale of a business brings wealth and other unspoken isues

A business sale creates wealth, and unease. 

When a business owner cashes in and sells an enterprise, it often brings some confusion–even unhappiness–along with new wealth. This may seem to be similar to that internet meme - First World Problems. Think about it. People hear you are suddenly wealthy and that you should invest in your neice's startup.

To be of help in that situation, advisers may need to step outside their own comfort zone and discuss non-financial issues with clients. Advisors can help their client to focus on a new set of goals.

Jacoline Loewen is a Director with UBS Bank and writes about M&A, private equity and wealth management for business owners and entrepreneurs. You can follow her on Twitter @jacolineloewen or contact her at jacoline.loewen at

The benefits of tax-loss and investing

Benefits of tax-loss harvesting are inflated. 

Some so-called robo-advisers may be overstating the benefits of tax-loss harvesting. Some of the claims we’ve seen are unrealistic given our more than a decade of experience managing tax loss harvesting portfolios and results we’ve seen from competitors we respect

The claims made by online advisors arguably represent the triumph of favorably simulated back-tested results over actual experience.

Wealthy families and their trusts

Trusts that use multiple advisers. 
Traditionally, the directed trust model called for electing a trustee and an investment adviser. Now, the wealthiest families are slicing and dicing trustee duties into many different functions
Directed trusts are showing up with as many as eight different roles, including a “special assets advisor,” a “distribution advisor” and a “trust protector.”

More Women reaching the Billionnaires List

There is a strong showing of women making it to the Billionaires' List, and not all through the old fashioned way of death of a spouse or divorce.
Forbes has the list and tech is the foundation of the wealth of oly two of the women. I thought there would be more. Here it is:
Women make up 10% of global super-rich and 172 women, 25% more than in 2013, are in renowned club of billionaires.
 From the Facebook executive who told women to "lean in" to get ahead at work, to a Nigerian oil tycoon and a British online gambling entrepreneur, a record number of women have entered the global club of billionaires.
A total of 172 women, up 25% on 2013, have made Forbes' 28th annual billionaires' list. Women now make up 10% of the global super-rich.
Facebook chief operating officer Sheryl Sandberg, with a personal fortune worth more than $1bn (£600m), becomes one of the highest-profile new entrants to the Forbes list, joining Meg Whitman of Hewlett-Packard as the only other female tech billionaire.
According to Forbes, a record number of 42 women broke into the list for the first time, although only 32 female billionaires (1.9% of the total) built their own fortune, rather than inheriting it from a parent or husband.
The world's richest woman is Christy Walton, who shares a $36.7bn chunk of the Walmart fortune, edging out one of L'Oréal's principal shareholders, Liliane Bettencourt.
One of the top UK entrants is Denise Coates, the British online gambling queen who, along with her brother, owns Bet365. Coates was at school when she started working as a cashier in her father's betting shops and has amassed $1.6bn in personal wealth.
Fiercely private, she has escaped almost all press attention in the UK despite Bet365 taking almost £20bn in bets and making £150m in profits in the year to March 2013.
In a rare interview two years ago, Coates told the Guardian how she has, on occasion, had to correct some people who had assumed that her father, a well-known businessman, ran the company. Her business, which employs 2,500 workers, mostly in Stoke-on-Trent, made a £150m profit last year, even after swallowing £31m of losses from Bet365's controlling interest in Stoke City football club
Coates, who owns half the business, received pay and bonuses of £5.4m, as well as her share of £15m in dividends. Even after these payouts the company had a further £430m in cash reserves on the balance sheet. In the past five years, Bet365 has paid out dividends totalling £130m.
A total of nine women feature in the top 85.

Jacoline Loewen
Jacoline Loewen

The democratizing of financial services

A few years ago, I began to hear about the democratization of investing into private equity.  It was recognized that the earnings can be significant. Allowing the grandmother investor, for example, to put money into privately owned companies in the same way the public stock market allows, will have a way to go.
Currently, one way that was created to allow the average joe to invest with minimal knowledge is by going into your bank and selecting mutual funds. They show up on your bank app and give a pretty reasonable return.
Using the TFSA account, the average person could also invest into a startup but maybe (probably) lose their investment as the risk is so high at such an early stage.
So although we do have some democratization of the investment opportunities, the Canadian retail banks do offer their mutual funds which are a great start, the fees are hidden and do take a significant chunk of the returns.
We will come back to mutual funds and other investments where you can get started. In the meantime, one of my favourite motivational coaches, Tony Robbins, has put out a book on Money. In it, one his themes was about - surprise - democratizing investments. I liked his message:

Think about the four main elements that impact our quality of life: our relationships, emotions, health, and money. The most difficult one for many people to manage—and a frequent source of widespread confusion and anxiety—is the money.
2015 is the year that will change.
The One Big Idea for 2015 is the democratization of financial services, which means that for the first time, everyone will have access to the unbiased advice and education they need to make confident, informed decisions about money and investing. Everyone will be able to find knowledge, tools and insights to help them achieve their financial goals.
The current financial system is opaque, complex, and designed to enrich and reward those on the inside. Average investors are so in the dark when it comes to the system that most don’t know just how much they don’t know.
For example: how is your financial advisor compensated? Do they have a legal duty to put your interests first, or are they primarily paid to distribute products? If you’re like most people, you don’t know.

What can you do today for your retirement?

Saving for our children's university and retirement is one of life’s biggest savings, but surveys show these investments too often come last.
What could you do if you can see yourself in one or both of these situations?
Start by trying to save just 2% of what you’re bringing in; put the contributions on systematic automatic contributions to be sure they make it into the designated pot. 
Here’s the deal. Someone is reading this and thinking, `What the heck. It’s too late for me.’ But you don’t have to make these changes all at once. Look at your long-term plan and trim away that extra tank of gas or movie night out to start supporting all that you want down in ten or fifteen years.