Sandip engaged in a healthy debate with top industry professionals and economists about the recent turmoil in the markets as a growth scare threatens to devolve into a recession or stagflation.
Risk assets have sold off in the midst of high policy uncertainty and fiscal austerity from government job cuts. In the span of just a few weeks, concerns about the U.S. economy have shifted from being overheated to now plunging into a recession.
Sandip believes these fears are overblown and unwarranted. The bark of tariffs will likely be bigger than the bite. Renewed fiscal stimulus, deregulation and productivity growth will eventually push growth higher in the coming years.
Watch now to hear Sandip’s more balanced, strategic and constructive outlook in a discussion with Phil Mackintosh, Chief Economist at Nasdaq; Brian Joyce, Managing Director on the Nasdaq Market Intelligence Desk; Steven Wieting, Chief Economist & Chief Investment Strategist at Citi Wealth; and host of Nasdaq Trade Talks, Jill Malandrino.
To learn more about our views on the market or to speak with an advisor about our services, visit our Contact Page.
Individual securities offer powerful advantages for ultra-high-net-worth investors.
If you’ve been investing for a while, at some point you were probably told that mutual funds were not only an easy answer, but also a wise one, promising a strong return with minimal effort and monitoring. This advice is not wrong, but it doesn’t apply to everyone.
After mutual funds rose to popularity in the bull market of the 1990s, they became a staple of individual retirement accounts (IRAs), which were rapidly replacing traditional pensions. IRAs and other mass-market purposes are exactly what mutual funds are designed for, and they typically perform well toward those goals. But they don’t make sense for investors with the resources to gauge the market on their own.
“One of the things that differentiates Whittier Trust is our belief that clients should own individual positions versus mutual or co-mingled funds,” says David Ronco, Senior Portfolio Manager at Whittier. “Buying individual securities for our clients allows us to save them money with respect to fees and taxes while creating a customized, transparent investment solution.”
“As a portfolio manager, I have an in-depth understanding of all major asset classes including equities, fixed income, real estate, and alternatives,” Ronco continues. “For each client’s portfolio, our team hand-picks the best individual investments to meet their goals.”
Here, Ronco explains four key benefits of owning individual securities.
Customization
Mutual funds are designed to reach a broad cross-section of market participants. “The only customization they offer is a choice between general goals such as growth or income,” Ronco explains. “They don’t take into account your philosophy, your risk tolerance, or the many other factors that can make you a standout investor. They are truly the lowest common denominator of investing.”
Overall Cost
Many mutual funds have high expense ratios, layered on top of wealth management fees. “We call that fee layering, and it’s not an issue with individual securities, which have no embedded fees,” Ronco says. “So right off the bat, moving to individual securities significantly increases the compounding return potential of a client’s portfolio.”
Tax Efficiency
“Individual securities are also more tax efficient than mutual funds by far,” says Ronco. “Mutual funds are essentially not concerned with tax efficiency. They generate capital gains and losses as they trade securities throughout the year, and they have to distribute those net capital gains evenly to all shareholders, even those investors that didn’t engage in any buying or selling.”
Whittier clients benefit from direct ownership of their holdings, which allows precise control over capital gains enabling flexible tax loss harvesting and tax-free compounding. Our portfolio managers strategically leverage these advantages through constant analysis of client positions, ensuring proactive, year-round tax optimization, not just a reactive approach at tax time.
Transparency
Individual securities offer Whittier clients ultimate transparency so their stakes in specific industries and companies are completely clear. “We can provide detailed, real-time information about every security our clients hold,” explains Ronco. “Mutual funds, on the other hand, are a bit of a black box, often reporting 60 to 100 underlying positions under a single, vague name or symbol.”
Growing Your Portfolio
At Whittier, no two client portfolios are the same, and the individual securities selected by portfolio managers and the Whittier investment team reflect the understanding we have of each client’s assets and goals, built through long-term relationships.
“We help families preserve and grow the wealth that they have worked hard to create,” Ronco says. “I consider it a privilege to share the expertise of our Whittier team and my own in-depth understanding of all asset classes—including equities, fixed income, real estate, and alternatives—to help clients build wealth.”
If you’re ready to explore how Whittier Trust’s tailored investment strategies can work for you, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
Last year’s National Nonprofit Day was a welcome reminder of the significant impact philanthropic activities can have on communities and the world. But at Whittier Trust we have also witnessed how helping families engage with philanthropy, whether by establishing a nonprofit, a family foundation or forming a philanthropic strategy, can significantly transform family dynamics and relationships, forging and strengthening bonds by a shared desire to do good.
One family we worked with illustrated the power of incorporating philanthropy into a wealth portfolio. To facilitate the creation of a family foundation, our team organized a retreat for the father, mother and their three adult children. The two daughters were enthusiastic about participating but their brother, who was estranged from the family, was less so and only reluctantly agreed to attend. During the retreat, the father became emotional as shared the childhood experiences that inspired him to support vocational training for low-income kids and motivated him to establish the foundation.
His heartfelt words came as a surprise to the children, who had never seen their father so passionate. It prompted them to open up about their interests and passions. The father’s moment of vulnerability sparked a deeper understanding and connection among the family members, leading to their active engagement in the foundation — including the once-estranged son. Through philanthropy, this family was able to gain a meaningful appreciation for each other and the experiences that shaped them.
While a simple story from a father about why he gives back can inspire family involvement and reconnection, there are benefits derived from family philanthropy.
Values and Succession
Discussions about family members' backgrounds and beliefs help everyone embrace family history and carry forward important values and civic responsibility. Through philanthropic activities, parents can also help ensure that family wealth does not undermine their children's drive for success.
Life Skills
Deciding on a charitable mission, selecting grantees, creating a decision-making process and determining and evaluating desired impact can be challenging. Making these decisions as a family allows members to research causes they care about, learn to communicate respectfully, make persuasive arguments, appreciate different perspectives and find compromises. Representing your family well in the community ensures every interaction leaves a positive impression on people, grantees, organizations and other philanthropists.
Financial Literacy
By setting a foundation's strategy and mission, family members gain knowledge about investments, financial planning, budgeting, market fluctuations, tax considerations and other financial management practices — including how to understand and evaluate the financial health of organizations they might support.
Resolving Ambivalence
Family members, especially those who didn't earn the wealth themselves, often have mixed feelings about the family money. Collaborating on how to use the wealth for good can help alleviate these tensions, uniting family members around positive impact.
Togetherness
With wealthy families often dispersed across the country or the globe, philanthropy serves as a unifying force around a common purpose. It encourages family members to come together, visit grantees, observe their work in the community and discuss their experiences.
When families select a cause based on their own experiences, interests and life journeys — as opposed to external influences — they maximize the odds of reaping the benefits discussed above. A family office can help identify each member's passions and develop a strategy that unifies the philanthropic focus and doesn’t seed resentment or frustration.
As we celebrate National Nonprofit Day, consider how family philanthropy can strengthen bonds, impart valuable life skills and create a lasting legacy. By thoughtfully establishing and managing a vehicle for family giving, families can unite around shared values and make a meaningful impact on the world for generations to come.
Written by Pegine Grayson, JD, CAP®, Senior Vice President and Director of Philanthropic Services as well as Ashley Fontanetta, Senior Vice President and Client Advisor, both in Whittier Trust's Pasadena Office.
Featured in Financial Planning Magazine. To learn more about how Whittier Trust can support you, your family and your legacy through our philanthropic services, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
“The difference between great people and everyone else is that great people create their lives actively, while everyone else is created by their lives, passively waiting to see where life takes them next,” Michael E. Gerber wrote in his book, The E Myth. The sentiment applies to entrepreneurs approaching the impending sale of the business they built: They must create the most favorable conditions to achieve their desired outcome, which can go far beyond optimizing the balance sheet and achieving a high valuation multiple.
Business owners are used to looking at all sides of a transaction, and that skill comes in handy with the ultimate transaction–the sale of the business itself. It is vital to consider not only the financial and tax consequences of such a sale, but also the impact on one’s family situation, next generation planning, other business holdings, and charitable giving pursuits. When all is said and done, you want to know that you maximized opportunities, minimized regrets, and positioned yourself for a rewarding next chapter. This doesn’t happen without thoughtful and timely planning.
Keep these three things in mind so that you can sell smart when you sell your business:
1. Enlist help.
Oftentimes, that’s where a certified exit planning advisor can come in to help strategize and execute the steps leading up to, and following, a sale. At Whittier Trust, the oldest multifamily office headquartered on the West Coast, we take a holistic approach that prioritizes investments, family relationships, and tax, estate, and philanthropic planning. By spending time getting to know clients’ needs and goals, we’re able to help avoid obstacles and optimize results. Often, by taking this approach and thinking ahead, we seek to help them achieve the best results possible. We focus on surrounding the entrepreneur with Whittier and non-Whittier professionals who will collaborate to educate, strategize, and help the business owner exercise more control over personal, financial, and business outcomes that might otherwise be left to chance.
2. Look beyond the bottom line.
One way our Whittier Trust team helps entrepreneurial business owners navigate a potential sale is by doing a deep-dive to understand the impact the sale of the business may have on your business goals and your personal life. In addition to fact-finding about the business itself and how it’s structured, the team works to understand the motivations behind why you built the business, why you’re prepared to sell, and how to best achieve your goals for the future. Here are some questions to help get you started:
What prompted you to start the business in the first place?
Why are you thinking about leaving the business?
Do you have a timeline in mind for your exit?
What’s your vision of the ideal transition?
What personal or business objectives would you like to see accomplished in the transition?
How do you expect exiting the company to impact your life?
Do you want to stay involved in the business after the sale?
Do you expect any family members to remain active in the business?
Are you concerned about any family issues?
How do you expect your key employees to be impacted?
Are you concerned about any employee issues?
Do you anticipate any partner or shareholder issues?
How important is preserving the legacy of the business?
Have you identified a successor(s)?
Have you taken steps to formalize a transfer arrangement?
What are you most concerned about relative to the transition?
Have you had the business appraised in the last 12 months?
Have you worked with anyone to evaluate the health of the business?
How will exiting the business impact your personal financial situation?
Does anyone else depend on the business for income or financial support?
Do you currently have a wealth management consultant?
Do you have a plan for optimizing tax efficiency and savings related to the transaction?
Have you estimated your cash flow needs after the transaction
To what extent do you expect to rely on proceeds of the sale to meet your post-transaction cash flow needs?
What are your post-sale goals?
Are there any family dynamics that might be a cause for concern when the sale happens?
3. Establish a realistic timeline.
This list of questions isn’t exhaustive, but it’s designed to help uncover risks and planning opportunities that are best addressed months, or even years, before the sale. Understanding your priorities is the first step in maximizing the success of your outcome.
Keep in mind that to increase your chances for a big win, it is essential that you coordinate with your professionals to tailor the results to your needs. At Whittier Trust, we have years of experience working with legal, accounting, and business advisory teams to ensure that the specifics of your deal will focus on the outcomes you seek from a holistic perspective. No two businesses are alike, just like no two families are the same, and we take pride in being the partner business owners can count on to pave the way for the result they want. Clients who have the most successful sales start thinking about the process early and focus on the personal results they want to achieve as well as the financial payout.
To learn more about how Whittier Trust can help you with the transition away from your business, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
Elder care is a personal and financial vulnerability many people fail to plan for.
Wealth can shield you from many of the hardships of life, particularly the discomforts of aging. Luxury retirement accommodations, private caregivers, and the best medical care can smooth the sometimes bumpy path of later years.
But money can’t insulate you from the personal complications of aging. Everyone has tough decisions to face and weighty conversations to initiate with loved ones. Having a knowledgeable partner to help facilitate those discussions and transitions is a privilege no one should forego if they can afford it.
“At Whittier Trust Company, elder care is integrated into the continuum of family office services we provide for clients in collaboration with trusted partner companies,” says André B. van Niekerk, Senior Vice President, Business Development. “Quite often, families end up facing complicated care decisions in the heat of the moment, after a hospitalization or other emergency. With our network of expert partners, we help families prepare for the inevitable and manage it when it comes.”
Failure to plan ahead for elder care makes your family vulnerable to financial risk as well as mental and emotional duress. Van Niekerk and his team spoke with one of Whittier’s partners, Barbara Oberman, CEO and President of Senior Living Solutions, about those risks and how they can be prevented or mitigated.
Crisis vs. Preparation
Making a decision in a time of crisis is never ideal. “It can be a trial by fire,” Oberman says. “I was fortunate that when my mother was hurt, I had already set up a plan, and it gave me the ability to act quickly and decisively.”
Planning ahead with your Whittier team and exploring options for care in advance ensures you can make the most of available resources, such as long-term care insurance policies, which may help cover certain care expenses. Medicare and supplemental insurance primarily cover medical expenses, so understanding these limitations is key to preparing for non-medical or long-term care needs.
Overload vs. Confidence
Assisted living, independent living, board and care, memory care, or caregivers —there’s an entire spectrum of possibilities, and the differences are often hidden in the fine print. Do you need help with meal preparation or medication management? Do you want activities and socialization? Oberman recalls: “One client came to me after moving their father into assisted living. They were genuinely surprised to find he didn’t have someone by his side to take care of him all the time. But that 24/7 type of service only comes with a private caregiver. It was stressful for them to have to fix that mistake.”
An upfront needs assessment avoids such mishaps by covering all the factors in advance, such as medical conditions, mobility levels, budget, preferred locations, desired activities, and cognition levels. “We’re like a real estate agent,” Oberman says. “We help you identify your needs and wants, then help you navigate the many moving parts until we reach the best solution. We help moderate tough conversations, analyze choices, and even assist in the move to a new place.”
Liability vs. Expertise
It is important for families to realize that if you hire private caregivers, you become an employer, with payroll and management responsibilities. You must follow labor laws or you could put yourself in financial jeopardy. Homeowners' insurance typically covers visitors, but often doesn’t cover regular household workers. A reputable agency will handle background checks, pay taxes, and provide workers' compensation for caregivers. If you are certain private care is your preference, however, Whittier Trust and a consultant like Oberman can help you with those arrangements.
We can also help find the ideal senior living community. "Many of these communities are part of national chains, but each one is unique,” Oberman explains. “We build relationships with local staff, visit each community in person, and review their history (including any violations or required corrections). Senior living communities must meet state licensing requirements, and we carefully check these reports to ensure they provide high-quality care before making a recommendation. We know all the finer points of each company’s approach and care philosophy, amenities, and costs.”
Sales Pressure vs. Concierge Service
The last thing you need during this difficult transition time is a heavy-handed sales pitch or dire warnings about waiting lists from a sales rep trying to meet monthly quotas. Your Whittier team safeguards you from such tactics, acting as your advocate in comparing different senior living options so you can make an informed decision without pressure.
“As part of our concierge service, we go beyond just making recommendations,” Oberman says. “We arrange personal tours of the communities you wish to visit, help you navigate paperwork in advance, assist with negotiations to secure the most favorable terms and services and coordinate move-in arrangements. Additionally, we connect you with trusted professionals to assist with selling your home, managing estate sales, and downsizing. Through our network of senior advisors, we provide personalized support to make the transition as smooth and stress-free as possible. Then we’ll check in after the move to address any concerns and ensure everything meets expectations.”
Chaos vs. Consensus
Procrastination is likely to leave you in turmoil if an emergency arises and you’ve failed to talk to your family about elder care. We know it’s not easy, though, to organize such personal discussions or reach consensus with multiple family members and multiple generations. We can help facilitate these conversations, create a plan and budget and keep it updated for whenever it ends up being needed.
“At Whittier, we’re here to help you manage life’s many stressors while maintaining your family’s security, unity, and overall well-being,” says van Niekerk.
To learn more about how Whittier Trust's family office services can make a difference for you and your loved ones, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
A calculated approach to risk management allows investment objectives to be met regardless of the conditions.
Managing risk is one of the most important portfolio management objectives. Risk is simply the possibility that an outcome will differ from what is expected or hoped for.
“Investment risk is like the wind on top of a mountain,” says Caleb Silsby, chief portfolio manager at Whittier Trust Company. “It’s unpredictable and often cannot be seen or even anticipated. The more calm the environment is around you, the less prepared you are likely to be when it hits.”
But with the right guidance and preparation, risk can be managed and planned for in a way that allows investment objectives to be met regardless of the conditions—to be understood rather than feared.
Whittier Trust offers a calculated approach to risk management that has served clients well through many market cycles. “We emphasize three interconnected mechanisms,” Silsby says, “And this trifecta has proven time and time again to generate strong returns for our clients.”
Recognizing the Risk Continuum
Most clients want more return than the bond market but less risk than the stock market. To achieve this outcome, Whittier Trust starts with an investment philosophy centered around owning quality companies. “With high-quality companies, you can own more of a higher returning asset class in your portfolio than you would with riskier, lower quality equities,” explains Silsby. “Whittier’s research team analyzes the history, management, and financials of these companies. When we refer to a stock as high-quality, it means the company has a clean balance sheet, strong management team, lasting competitive advantage, and strong returns on capital deployed.”
Minding the Bear
Correlation is a statistical tool for portfolio managers that indicates the degree to which securities move in relation to one another. Whittier Trust believes that in bear markets, correlations move to one (a perfect positive correlation), and the dollar tends to strengthen. “We are also mindful of currency impacts that often catch unwitting investors by surprise during bear markets,” says Silsby.
Whittier Trust has managed money through multiple market cycles and has seen the commonalities of bear markets. We employ thoughtful portfolio construction that anticipates a risk-off environment where risk assets will tend to move in synchrony. We set up portfolios with the anticipated market shifts in mind, which allows us to plan for the unexpected. During the 2022 bear market, the Whittier investment team anticipated the Federal Reserve’s aggressive interest rate hikes in response to inflation and maintained a constructive outlook despite widespread concerns and panic about a deep recession. Our disciplined approach emphasized a balanced perspective, suggesting that fears of stubborn inflation and severe economic downturns might be overstated. In 2023, amidst significant challenges such as regional bank collapses, Whittier Trust assessed the broader financial system’s resilience, predicting these crises would be “bumps in the road” rather than catastrophic events. This perspective proved revelatory, as markets rebounded, with the S&P 500 delivering a 26.3 percent total return for 2023. By aligning their investment strategies with key economic indicators and maintaining a steady hand, we have reinforced our reputation as a reliable partner in wealth management during challenging market cycles.
Playing the Long Game
Whittier’s formula for managing risk is focused on long-term investments. The market generates returns much more often than it doesn’t, making long-term investments one of the best ways to grow wealth. Silsby advises: “If you can be a long-term, patient investor who avoids being a forced seller, then the true risk to manage around is permanent loss of capital. Such losses most commonly arise through forced selling, uncontrolled equity dilution, or too much leverage.” Forward-thinking investors can ride out market volatility and take advantage of compounding returns, dividend growth, and capital appreciation.
As the oldest multifamily office headquartered on the West Coast, Whittier Trust Company has refined our approach to managing both short- and long-term risks over nearly four decades. As in everything we do, our guiding purpose as fiduciaries is to understand and meet clients’ overall goals and best interests, while working to ensure the resilience of their portfolios. With the long-term in mind, we can help protect clients, their families, and their legacies through uncertain economic trends and market fluctuations with tailored investment plans and our exceptional commitment to personal service.
To learn more about how Whittier Trust has approached portfolio management and managing risk for over thirty years as a multi-family office, start a conversation with a Whittier Trust advisor today by visiting our website.
To learn more about how Whittier Trust's calculated approach to risk can make a difference for your investment portfolio, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
A fresh perspective from a recent addition to the team:
Sharon Perlin joined Whittier Trust Company in January 2023. With nearly 20 years of experience providing legal counsel, she frequently remarks on the distinctive qualities that set Whittier apart from other companies in the wealth management field. “Although there are countless ways in which Whittier stands out,” Sharon explains, “I’d like to share two key points where my clients and colleagues agree that Whittier offers a truly exceptional experience.”
Personal Attention
Perlin works with about 24 families in her role as Senior Client Advisor at Whittier. The norm in the industry is closer to what she experienced at her prior employer, where she was responsible for 180 accounts (some of which included up to nine trusts). There was no time to be proactive in her advising, she recalls, or to build meaningful relationships with her clients.
“At Whittier Trust, I speak with most of my clients on a weekly basis,” she says, “or sometimes even multiple times a week. This is so different from my time before, as a practicing attorney, when I would bill clients in six-minute increments. It’s hard to get to know someone when a client is aware that with every story they share, the bill increases.
“At Whittier, I take the time to understand the history, values and dynamics of the families with whom I work. I know about the upcoming wedding, the new grandbaby and the son struggling with addiction. This knowledge is helpful when advising on estate and gift matters, too. At the same time, I stay current on legislative proposals and changes that might impact my clients’ estate and gift plans.”
Perlin gives an example of a client who recently sold a business in Illinois, with two phases to the sale. The first phase was recently completed, and phase 2 will be in two years. Because the client lives in California, she paid several million dollars in state taxes on the first phase of the sale. Over lunch one day, she shared with Perlin that she had just bought a house in Washington to spend more time with her grandchild. Perlin asked how long she typically planned to stay in Washington, and the response was, “At least half the year.”
“I was aware that Washington has no state income tax,” Perlin recalls, “so I suggested the client become a Washington resident. I ran a domicile tax analysis and confirmed that the decision would be very favorable for her.”
Thanks to Perlin’s recommendation, the client will save millions in taxes on Phase 2 of the sale of her business. “She’s delighted,” Perlin comments, “and this never would have happened if we hadn’t taken the time to talk over lunch.”
Being part of the Whittier extended family also opens the door to relationships with other ultra-high-net-worth individuals with shared interests. The company hosts special events throughout the year where clients can enjoy the camaraderie and elevated experience of our network of colleagues, clients and friends.
“Last month, I joined clients for a beautiful day at the Santa Barbara Polo and Racquet Club for a polo match hosted by Whittier,” Perlin says. “There was an open bar and delicious food and more than 100 attendees at this private event. A month later, one of the clients told me that she and her partner had now gotten together with two other couples they met at the match. That was the Whittier difference in a nutshell.”
Responsiveness
Whittier’s focus on clients’ needs is what drives the company’s internal processes as well. This means that advisors are empowered to be proactive in their guidance on investments, estate planning, philanthropy, taxes, real estate and other matters and that clients can always expect thoughtful and timely follow-ups to requests.
Perlin gives an example: “At my prior firm, if a client had a trust where the firm served as trustee, and they requested a discretionary distribution from the trust, it was an arduous process. They had to provide extensive supporting documentation, and then the request went to an out-of-office committee that met only twice a month. No one with decision-making authority had ever spoken to the client, and even as their advisor, I had no ability to weigh in on the request. Clients were frustrated and felt like the system was set up against them, rather than in partnership.”
Such a request would typically be completed within hours at Whittier Trust. We serve as trustee on many of our clients’ trusts, and a client’s request for a trust distribution is vetted by a local committee, including the client’s advisor. In most cases, no supporting documentation is needed from the client because their advisor already knows the finer points of their financial status and understands their global balance sheet, cash flow needs, and family dynamics and circumstances. This allows us to quickly distribute funds, often on the same day.
“Whittier Trust is like no other firm I have experienced,” Perlin says. “I am thrilled to be a part of the Whittier team and to have deep personal connections with clients that are incredibly fulfilling for me. I hope if you’re reading this, you will reach out and talk to us about whether the Whittier experience would be beneficial for your family as well.”
To learn more about how Whittier Trust can make a difference for you, your family, and your estate, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
Whittier Trust’s internal investment team selectively partners with outside managers to yield higher returns. We call it our hybrid architecture. Our clients call it the best of both worlds.
Internal + External Investing
The investments we make on behalf of our clients fall into two categories: those our internal investment team manages directly and those we allocate to outside managers. Most investment managers employ only one of these strategies, which makes our dual approach relatively uncommon—enough so that we gave it our own name: hybrid architecture.
Equities, fixed income, and real estate are the three major asset classes directly managed by Whittier Trust’s investment team. For one other major asset class—alternatives—we allocate to external managers. The alternatives asset class includes private equity, venture capital, private debt, and hedge funds.
“We know that this internal-external distinction can seem abstract,” says Sam Kendrick, Whittier Vice President and Portfolio Manager, “But it perfectly embodies Whittier’s unique history and client-centric approach. We’ve been in the multi-family-office business since 1989, and we’ve continuously evolved our structure to find the approach that gets the best result for our clients. We used to outsource the management of stocks and bonds—stocks to mutual funds, and bonds to brokers. But after years of analysis, we felt confident we could beat Wall Street’s returns, especially on an after-tax basis. We moved the management of stocks and bonds in-house. Since doing that, we haven’t looked back.”
Custom Solutions for UHNWI Clients
One of the primary reasons outsourcing equity management can lead to worse results is that it limits the ability to customize investment exposure around clients’ unique needs.
The investment products that Wall Street creates don’t cater to Whittier’s particular clients, who are interested in returns after taxes. “Wall Street products pursue the highest headline return possible to gather assets while ignoring the tax consequences,” Kendrick says. “This is because only a quarter of the U.S. stock market is owned by taxable investors. Unfortunately, the result is excessive turnover and capital gains, leading to lower after-tax returns.”
What’s more, in an equity mutual fund structure, investors have no control over the timing of gains. Capital gains are realized and distributed at the whim of other investors in the fund. This is unacceptable for most Whittier clients, who tend to have vastly different taxable incomes each year due to liquidity events and private investments. By investing in individual stocks for clients, rather than equity funds, we’re able to create dispersion: A few stocks will go up many multiples of the original investment while others go down. This allows us to sell losing stocks to offset gains while winning stocks can be donated to avoid capital gains entirely, all of which leads to an increase in after-tax returns.
Whether it’s low-basis, legacy stocks, or ownership interests in private businesses, many of our clients have meaningful existing exposures in specific companies and industries. Buying an equity mutual fund or ETF will indiscriminately add to existing concentrations, needlessly increasing risk. Actively managing portfolios of individual stocks allows us to strategize exposure to best suit each client’’ specific balance sheet.
Maximum Return on Fixed-Income Investments
The way the Whittier Trust team manages fixed income internally comes from knowing the goals of our clients and working backward. “Our clients want the maximum return from fixed income with minimal risk,” says Kendrick. “They don’t specifically want to own munis, treasuries, or preferreds.” While most funds only buy one type of bond, regardless of the relative attractiveness to other types, our team looks for bonds that deliver the best returns for each client with their specific tax situation in mind. We analyze opportunities outside municipal bonds, factoring in the added tax to make apples-to-apples comparisons, and then choose the best investments. The result is a portfolio that’s not only higher returning but also more diversified.
Deep Experience with Real Estate
Whittier has been actively investing in real estate since our origin as a single-family office more than a century ago, and we use that expertise to buy individual buildings that our clients own directly. With ownership limited to Whittier clients, we have the control to build real estate portfolios on a deal-by-deal basis, diversifying by property type and geography according to clients’ needs. And because there is no fund structure and no outside investors, we decide when to sell based only on when is best for our clients.
Partnering on Alternative Investments
With Whittier’s successful record managing investments internally, the obvious question is why wouldn’t we keep everything in-house? Why allocate to outside managers for alternative investments? “The reason comes from our client-focused approach,” Kendrick explains. “Throughout our history, we’ve managed alternative investments in both ways, internally and externally, and the results for our clients have been better using external managers.”
Whittier’s scale allows us to meet with hundreds of outside managers a year—spanning hedge funds, private equity, and private debt—and select the best ones for our clients. These high-quality managers, selected from the most attractive alternative investment sub-asset classes, offer an impressive array of opportunities for diversification and above-market returns. Allocating to outside managers means we can be both broad and nimble in an asset class that is evolving and expanding, rather than internally managing alternatives, thereby restricting ourselves to only a handful of strategies and sub-asset classes. And because we don’t charge additional fees on alternatives, we continue to ensure that our incentives are aligned with our clients’.
It's the best of both worlds: With Whittier Trust’s hybrid architecture, clients get customized, direct exposure to stocks, bonds, and real estate, as well as access to the best private equity, private debt, and hedge fund managers with no extra charges. It’s a structure that has evolved organically over time to best serve our clients’ needs. “You reap higher returns because we can minimize taxes and eliminate layers of investment products and embedded costs,” Kendrick says. “Our clients get the kind of results you’d expect from the single-family office model of direct ownership, but with the scale advantages of a multi-family office. And as we continue to grow and learn about our clients, we’re always looking for new solutions that will further their goals.”
For more information about how a hybrid team of internal professionals and the right external experts can help your investment portfolio, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
Many ultrahigh net worth clients spend a good portion of their lifetime building their wealth. Losing that wealth due to identity theft is a nightmare scenario — one that is becoming increasingly common in today's world, as AI automation and efficiencies allow bad actors to increase the scale and impact of their attacks.
Although a recent study found that bad actors cast a wide net when it comes to targeting victims, tending not to discriminate based on wealth, UHNW families may be more susceptible to identity theft due to the large network of professionals and advisors required to manage their day-to-day lives.
It's a network that typically consists of retail and investment bankers, real estate and insurance brokers, attorneys, assistants, household employees and other concierge service providers — many of whom have their own teams supporting them. All of them have some degree of access to the family's personal and financial information. It takes only one slip-up by one person within this large network of people to open the floodgates to identify theft.
As part of a family office that serves wealthy individuals and their families, I often work in tandem with clients and their networks to prevent identity theft before it happens and to take swift action if it does.
Educate clients and their networks to prevent cyberfraud
Bad actors frequently use social engineering — techniques that leverage psychology to trick individuals into divulging sensitive information — to obtain personal and financial information. Educating clients and their networks on how to identify these attacks is a great way to safeguard against data being leaked in the first place.
For instance, wealthy families often have a diverse portfolio of business interests and investments and manage them through various legal entities to ensure privacy and mitigate risk. Maintaining separate financial and email accounts for each business and/or legal entity is a best practice for limited liability purposes, but doing so can also limit the assets and information exposed due to a compromised account.
I also recommend that clients perform background checks when introducing new persons to their network, such as executive assistants or household employees. They should also consider adopting some form of ongoing monitoring procedures.
Another simple but impactful way to protect clients' wealth is through multifactor authentication, Though not every application provides an option for MFA, applications that do will walk you through the steps to enable it via phone number, face ID, fingerprint scans or a separate application. Even if a password has been guessed or hacked, MFA means that would- be thieves can't access the account without a second or third form of authentication because it requires users to actively participate by confirming each transaction.
Mitigating damage after identity theft is detected
Sometimes, however, information is exposed due to circumstances out of the client's control, ranging from a corporate data breach to skimming devices placed on ATMs or at gas station pumps.
If this happens, it's vital that the family office team, executive assistants and other applicable service providers immediately take steps to mitigate the damage. After a client discovers their identity has been compromised, the first step is to file a police report with the local authorities. That report will be used as a supporting document to file an identity theft report with the Federal Trade Commission. Next, report the identity theft on the FTC's IdentityTheft.gov site.
If fraudulent accounts have been opened with financial institutions, it's important to file reports with those companies' fraud departments.
Another priority step is to prevent bad actors from opening accounts in a client's name. Contact the three major credit bureaus — Experian, Equifax and TransUnion — and tell them to freeze credit.
Beyond the three major credit bureaus, it's important to place security freezes with key bureaus used for opening bank accounts. These include ChexSystems, a national specialty credit reporting agency that collects and reports data on checking account applications; the National Consumer Telecom & Utility Exchange, an organization that collects information from new telecommunications and utility connection requests; and LexisNexis, a service often used by financial institutions to verify an applicant's identity when opening new credit accounts.
Note that unlike requesting a LexisNexis security freeze, "opting out" prevents the company from sharing Non-Fair Credit Reporting Act (Non-FCRA) information with companies that may request it. Non-FCRA providers are entities that utilize public records and consumer data but are not governed by the FCRA. These providers typically operate in areas unrelated to credit, such as aggregating data from public records for investigative purposes, including financial crime investigations, legal investigations and identifying or locating people. Opting out will likely require a copy of the police report, including the complaint number.
IRS, USD — and don't forget USPS
One way bad actors try to exploit data is by filing fraudulent tax returns in an attempt to direct a tax refund elsewhere. This can be prevented by the use of an IRS IPPIN, a form of multifactor authentication that prevents someone from filing a tax without entering this code. A new PIN is issued for each tax filing period and is only available from one's IRS account or via physical mail to the address associated with a person's tax returns.
We also recommend proactively creating an account with the state Unemployment Services Division to prevent a bad actor from fraudulently filing for unemployment benefits — even if the client would be unlikely to file for such benefits themselves.
While a lot of fraud takes place online, never forget the importance of physical documentation. Thieves can fraudulently set up a mail forwarding order to gain access to mail. It's important to contact the USPS to ensure that a mail forwarding order, for either a home or business, has not been placed. Once that is verified, the client should sign up for USPS Informed Delivery, which notifies a homeowner or business owner of mail that is expected to be delivered. It's possible that a thief could sign up for this to preview incoming mail.
A team approach in which the family office, professional advisors and other persons within the client's trusted network work together is invaluable when responding to or preventing and mitigating identity theft and other cybersecurity risks.
Tom Suchodolski is a Vice President and Client Advisor in Whittier Trust's Pasadena Office.
For many ultra-high-net-worth individuals (UHNWIs), it's easy to believe there will always be time to address estate planning. The demands of running a business, managing investments and nurturing family relationships often take precedence. But estate planning isn't just about preparing for the inevitable; it's about ensuring your wealth survives — and thrives — for generations to come, even in the face of unexpected events.
At Whittier Trust, I've seen too many situations where a lack of proactive planning has created unnecessary stress, conflict and financial strain for families. The good news? With a thoughtful, early approach to estate planning, these crises can often be avoided. Here are some of the critical lessons I've learned from my years in estate planning and wealth management.
Why Early Action Matters
Waiting to address estate planning until it feels urgent is a common mistake. It's human nature to focus on immediate priorities, but this approach leaves families vulnerable to the unexpected. One of the most overlooked aspects of estate planning is ensuring that the right legal structures are in place to address unforeseen circumstances, including incapacity.
Imagine a scenario where a family patriarch or matriarch — the key decision-maker — suffers a sudden illness or accident that renders him or her unable to manage the family's financial affairs. Without a plan in place, this can lead to delays in critical decision-making, confusion over who has the authority to act, and even costly legal battles. Such crises can strain family relationships and jeopardize the wealth that generations worked hard to build.
The consequences of failing to plan for the unknown can be significant. In one case I handled, a family member serving as trustee began losing capacity — repeatedly requesting the same distribution within days, forgetting she had already done so and that it had already been fulfilled. It became clear that she could no longer reliably fulfill her responsibilities, but determining her incapacity and appointing a successor trustee created tension, confusion and delays — three things you never want in the financial world. Without a clear plan, these situations can lead to family conflicts and financial risks, all of which could have been avoided with proactive estate planning.
This is also where powers of attorney play a critical role. Many people assume that simply having a document in place is enough, but these agreements often lack the flexibility to optimize the estate for tax purposes. For example, most powers of attorney grant authority only to make annual exclusion gifts (currently $18,000 per recipient). However, more comprehensive provisions can allow an attorney-in-fact to gift beyond this amount, potentially reducing estate tax burdens significantly. Without this foresight, families may miss critical opportunities to minimize taxes and preserve wealth.
The Hidden Risks of Family Trustees
Another common challenge arises when families don't take the time to fully understand their options and appoint relatives as trustees. While it may seem like a natural choice to entrust a loved one with managing your estate, this can lead to unforeseen complications. Family members serving as trustees are often unprepared for the legal, financial and emotional responsibilities the role entails. Worse, they may face undue influence or capacity issues that compromise their ability to act in the best interests of the estate.
As an unfortunate example of undue influence, a patriarch serving as trustee became entirely dependent on a caregiver for his daily needs. This caregiver isolated him from his daughters, changed the locks on his home and persuaded him to create a trust for the caregiver's grandchildren. Such scenarios are heartbreaking but also preventable with the appointment of a corporate trustee.
Corporate trustees can offer an impartial, professional alternative. Unlike family members, a corporate trustee doesn't age out, lose capacity or develop emotional conflicts of interest. This neutrality preserves healthy family relationships and ensures fiduciary responsibilities are upheld.
Beyond the logistical benefits, a proactive estate plan can mitigate the emotional strain that often accompanies wealth transitions. For example, I worked with a family that inherited a strip mall in Los Angeles. Purchased by their grandparents, the property was deeply sentimental to one sibling, but financially burdensome to the others. Despite a lucrative offer to sell, the emotional attachment of the sibling serving as trustee created a rift that took years to heal.
A corporate trustee could have handled the situation differently, prioritizing the long-term financial well-being of all beneficiaries. By removing emotions from decision-making, corporate trustees can help families avoid these types of conflicts, fostering unity instead of division.
Protecting the Next Generation
One of the most meaningful aspects of estate planning is preparing the next generation to manage the wealth they inherit. This involves more than financial education; it's about instilling values and fostering stewardship. Trust provisions can be structured to encourage responsible behavior, support charitable giving and provide for future generations without creating dependency.
By engaging in open conversations about your intentions, you can help your heirs understand their roles and responsibilities. This transparency reduces the likelihood of misunderstandings and ensures your legacy is managed in a way that aligns with your vision.
A Call to Action
As UHNWIs, you have the resources and influence to shape your family's future for generations. Don't let procrastination or a false sense of security jeopardize the legacy you've worked so hard to build. Proactive estate planning is not just about protecting assets; it's about preserving relationships, minimizing stress and creating a roadmap for your family's continued success.
Whether it's revisiting your powers of attorney, appointing a corporate trustee or ensuring your trust provisions reflect your values, every step you take today can prevent potential crises tomorrow. Estate planning may not always feel urgent, but its impact on your family's future cannot be overstated. As someone who has spent decades helping families navigate these complexities, I can't emphasize enough the importance of starting early.
Featured in Family Business Magazine. For more information about proactive estate planning, start a conversation with a Whittier Trust advisor today by visiting our contact page.
From Investments to Family Office to Trustee Services and more, we are your single-source solution.
