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Who is Your CFO?
In the corporate world, a team of skilled advisors led by a Chief Financial Officer helps the CEO manage the finances of the business. This internal relationship sits at the heart of every company’s financial world. In a family, the role of CFO is frequently filled by an outside entity. In our experience, it is the vitality of this relationship – between the family and their primary advisor - that will determine the outcome of a family’s financial blueprint. » Read More
Independence
Conflicts exist in the financial services industry. It is important that we recognize this reality and tailor wealth management strategies accordingly. These parallel needs are the key to any discussion on independence. We believe that an advisor’s claims to independence should be evaluated on two narrow metrics: a firm’s architecture and the compensation arrangement that supports it. » Read More
Leadership
Wealthy families typically manage multiple relationships, each of which has input into the family’s financial affairs: a short list of preferred brokers, one or two CPA’s and a team of attorneys, each with their own niche specialty. A successful Family CFO must have the time, the skills and the aptitude to ensure that The Big Picture is understood by everyone involved. No matter how well asset managers perform, if tax and estate issues are not addressed, the end result will be disappointing or, worse, disastrous. » Read More
Investment Philosophy There may be many successful approaches to investing, but we believe that there is only one way to make any approach successful: the steady, consistent application of methodology and process. These two parallel but distinct concepts reveal the way in which an advisor chooses to interact with the capital markets, both through the tools they use and the manner in which they gather, order and interpret the variables that impact portfolio performance. » Read More
Access Access is a simple concept: a firm’s ability - which cannot be easily replicated - to consistently offer opportunities in top-tier investments. The challenge lies in the fact that top-tier managers, funds and private investments are surprisingly exclusive: we don’t choose them, they choose us. Although we identify the firms with whom we want to work, we can’t force them to take our client’s money. » Read More
Process How many times, when interviewing advisors or discussing your portfolio with your current advisor, have you been asked these two questions: 1. What are your return objectives? 2. What is your appetite for risk? We believe these questions are meaningless except when framed within the context of a thoughtful framework. » Read More
Performance & Reporting Every client wants to know how their investments are performing, how their portfolio is doing compared to relevant benchmarks, how well their cash flow is being managed and how much they are paying for these services. Yet every client struggles to balance the need for this level of information with the desire to have it presented succinctly. Many family offices and independent advisors offer a similar service, but with one key distinction: few, if any, offer the ability to incorporate private and alternative investments within the context of a composite report. » Read More
Independence
Conflicts exist in the financial services industry. It is important that we recognize this reality and tailor wealth management strategies accordingly. These parallel needs are the key to any discussion on independence. We believe that an advisor’s claims to independence should be evaluated on two narrow metrics: a firm’s architecture and the compensation arrangement that supports it. What is “open architecture”? Traditional bankers and brokers usually offer only the financial services and products their institutions produce and/or recommend. This structure is known as “closed” architecture describing the fact that advisors who work within such a structure do not usually have the flexibility to offer (or comment on) non-approved investments. It implies neither that their advice is inherently poor, nor that by following this advice, financial ruin awaits. We know brokers and bankers who work with integrity and intelligence, and we continue to maintain relationships with most of the large Wall Street firms. “Closed” architecture platforms, however, generate unavoidably biased advice. It is unreasonable to presume that any one firm can offer superior opportunities in every asset class. Thus, the ability to identify and deliver superior opportunities across all asset classes, regardless of source, is an invaluable characteristic in an advisor. This ability is known as “open” architecture. Narrowly defined, “open” architecture can mean the difference between an adequate return and a superior return. How does a firm’s compensation arrangement inform the advice it provides? Traditional brokers are paid according the amount of assets held at his/her firm. In this way, Wall Street firms compete to increase assets under management, and traditional brokers serve as the mechanism by which that competition is expressed. For a traditional broker to earn a living while working for you, you must custody your assets at that broker’s firm and utilize that broker’s firm’s products. Hence, a traditional broker has no incentive to evaluate, analyze or even consider assets that are not under his/her direct control. This represents a breakdown of management at the portfolio level by providing a compensation incentive to keep you invested in the firm’s offerings, regardless of quality. Our objective is to align The CAPROCK Group’s interests as closely as possible with our client’s interests. We do this in two ways. First, we maintain transparency in our relationships with the managers we hire, the custodians we retain and the fees we charge. Second, we ensure that the only way we can increase our income is to protect and grow our client’s wealth. At The CAPROCK Group, we refuse to align ourselves with any one firm, choosing instead to maintain a pure open architecture platform. We will never be influenced by corporate bosses, research departments or investment bankers. Unbiased advice is our rule, not our exception.
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Who is Your CFO? | Independence | Leadership | Investment Philosophy | Access
Process | Performance & Reporting | The Family Office | Team | Contact Us | Asset Classes
Copyright © 2007 The CAPROCK Group, all rights reserved. The CAPROCK Group is an SEC Registered Investment Adviser. This communication is not a solicitation or offer to sell investment advisory services except in states where we are registered or where an exemption or exclusion from such registration exists. All written content is for informational purposes only and may not constitute a complete description of available investment services. Investment in securities involves the risk of loss. Past performance is no guarantee of future returns. |
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