The services of an outsourced CIO can take the form of a fully discretionary investment platform or advisory/implementation, where investment decisions are subject to approval by the client before implementation. Investment management outsourcing is the process by which institutional investors and wealthy families appoint a third party to manage all or part of their investment portfolio. This service may include various functions such as establishing investment policy, asset allocation, selection of investment managers, implementation of portfolio decisions (both strategic and tactical) as well as providing permanent monitoring, supervising risk management in addition to the evaluation and analysis of results.

The origin of the trend toward outsourcing began with institutional investors who were unable or unwilling to develop investment expertise in-house. According to a study by the Family Wealth Alliance, approximately 40% of wealthy families have outsourced the management of their investment portfolio to an outsourced CIO on a fully discretionary or advisory/implementation basis. The trend is even more widespread among families with less than $500 million in assets, two-thirds of whom have opted for outsourcing management. Likewise, only 11% of university foundations between $100M and $500M have developed internal management of their portfolios, the vast majority rely on the services of an outsourced Investment Manager.

Source: Wikipedia

The term open architecture is used to describe an investment platform where access to products, services or external managers is unlimited and has no constraints. For example, wealth management services at large financial institutions typically offer a mix of in-house management products and a limited number of external managers.

Of course, when we begin a new relationship with a client, as is often the case, we are already familiar or already have a relationship with some of the new client's managers. Sometimes the manager is unknown to us. But in all cases, decisions are always based on client needs and our objective assessment, therefore, if it is agreed that an existing manager is a positive and relevant contributor to the overall portfolio, he will be retained and integrated into the overall plan. That said, it is common for us to modify the mandate of managers to take full advantage of their strengths.

We offer the ability to access our administration, monitoring and reporting services separately. These services are offered at a fixed annual rate determined based on the complexity of the portfolio. In such a relationship, it is possible to use our expertise, according to your needs, on an hourly rate basis.

Our registration as a portfolio manager confers very specific responsibilities and limits on what we can and cannot do. The most important fact is that our role is strictly limited to portfolio management and the transactions we carry out within the framework of our functions. Your assets, cash and securities are always held in an account with a custodian. The custodian is responsible for the administration of your assets and all your money coming in and going out.

Objectivity and transparency are among our most fundamental values. Our revenues are based exclusively on fees paid by our clients. In addition, in accordance with regulations, we are required to disclose any conflict of interest to you. For the sake of transparency, copies of sub-management or subscription agreements negotiated with management firms can be consulted upon request.

Demonstrating our added value in terms of established facts is quite simple. Yet the benefits of our services are multiple, and go beyond the obvious value of manager selection, thoughtful allocation and design of your portfolio. Additionally, our clients benefit from economies of scale since management fees charged by external managers tend to be lower, since most view Patrimonica Asset Management as a single relationship. We also have the opportunity to further reduce risk by broadening the diversification of specialist managers. While many specialist managers have a minimum investment threshold of $5M or $10M, the collective size of our clients' portfolios allows you to invest smaller amounts while still paying fees based on our total assets with the manager in question rather than on an individual basis. In other words, if one were to attempt to replicate one of our portfolios, at best, the total fees would likely be much higher and, at worst, would simply not be possible given the required minimums of the managers.

Taxation plays a major role in the management process and calling on an investment manager is all the more relevant for private investors. Our sophisticated systems provide the information to manage the tax impact. By combining the strengths of the investment team with those of the tax team, we implement tax minimization strategies and monitor each file in order to deliver the best net-of-tax returns. This allows us to implement strategies to minimize taxes.

As a multi-family office, we believe we can play an important role in the education of family members, young and old. In fact, we encourage younger family members to invest their savings with the same prospects as larger accounts in the same family. This allows young adults to benefit from the same level of investment expertise, benefit from economies of scale and, above all, gives them the opportunity to become familiar and gain experience in the field of finance and investments over several years, in preparation for the possible transfer of power of the family fortune.

As we have heard so often, family fortunes often disappear in as few as three generations. While there are no magic solutions to eliminate this risk, some research and anecdotal evidence sheds light on certain factors that promote the longevity of a family legacy. A common trait of successful families is certainly being united by a common mission; a family business, holding company or charitable foundation. As the family grows from generation to generation, it is important to develop a family culture, to instill common values ​​in our children and certainly to exercise exemplary leadership. Another important factor in increasing family wealth is certainly the grouping of the assets of each member of the family under the same management to benefit from economies of scale and have access to investment opportunities which are accessible only to a higher level of capital.

Do not hesitate to consult the tab: Recommended readings for more information on the subject.

Absolutely, this service model is what we call consultancy/implementation. It is favored by many families where decision-making is achieved through deliberation and consensus. In addition, it also plays an important educational role in families that encourages the participation of younger generations and family members who are not as familiar with the subject.