{"id":3996,"date":"2015-02-25T18:20:13","date_gmt":"2015-02-25T16:20:13","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=3996"},"modified":"2015-02-25T18:20:13","modified_gmt":"2015-02-25T16:20:13","slug":"por-que-todo-inversor-necesita-una-eafi-o-una-family-office","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/por-que-todo-inversor-necesita-una-eafi-o-una-family-office\/","title":{"rendered":"Why does every investor need an EAFI or a Family Office?"},"content":{"rendered":"

\"\"Perhaps for those of us who are professionally engaged in it, the answer may seem obvious. Especially for those of us who have suffered for decades in our own flesh the miseries and shortcomings of private banking. It is no coincidence that, in addition to being advisors, we were, are and will continue to be essentially investors, and as such, our interests are still, unfortunately, at the antipodes of those of the banks and their misnamed advice. Having said that, let us now analyse the transcendental decisions that every investor should take to advise on the correct management of their assets.<\/p>\n

To begin with, the ordinary investor should analyse his or her asset situation and determine whether, in addition to purely financial advice, he or she also needs tax, legal, commercial, corporate or real estate advice. In other words, they may need to put their companies\/businesses in order, their real estate investments or divestments, the administration of these properties, inheritance and family matters, their investments in the stock market and in unlisted companies, the generation of the necessary income for their family or projects, optimising the taxation of all of this, etc.<\/p>\n

If an investor only holds financial assets and does not require any further advice, they should engage the services of a Independent Financial Advisory Firm (EAFI)<\/a> regulated by the CNMV, of which there are already more than 150 throughout Spain. But that decision does not automatically meet your advisory needs, because, as with everything in life, there are good, average and poor EAFIs. From among them all, you must choose the one that inspires the most confidence, the one that offers competent advice most closely aligned with your interests, and therefore the one that is furthest removed from the model of banking \u00abadvice\u00bb that has caused \u2013 and will continue to cause \u2013 so much distress to its long-suffering clients. It is not enough for an EAFI to be a mere replica of that advisory model, staffed by former private banking employees who, instead of selling their own brand\u2019s products, now sell a range of brands. No. Independent financial advice must go much further and seek exclusively the client\u2019s best interests, given that these advisers no longer work for any banking institution to which they owe commissions or are beholden through their sales.<\/p>\n

In return for a fee, the independent adviser must ensure that their interests are fully aligned with those of the investor, and must more than recoup their costs through savings on bank fees, access to institutional-grade shares in the funds they recommend investing in, selecting investments solely on the basis of their quality and returns rather than the fees they generate, and so on. In other words, looking after their clients\u2019 money as if it were their own investments. In fact Investors should view it very favourably if their independent financial adviser, as well as being technically competent in terms of their knowledge and advice, is also an investor themselves<\/strong>. We advisers all make mistakes, and anyone who boasts of their ability to predict the future is lying, because crystal balls do not exist. But there is no doubt that, even though we may make mistakes, An adviser who co-invests their own money alongside that of their clients builds a level of trust and commitment that is hard to match. It is undeniable proof that their interests are aligned with those of their clients<\/strong>, as it should be. And that\u2019s something a run-of-the-mill bank investment salesman could never offer.<\/p>\n

If, on the other hand, the investor also holds non-financial assets such as businesses or property, and requires tax or legal advice, etc., it is essential to go a step beyond the simple financial advice provided by EAFIs, as Spanish legislation paradoxically prevents these regulated firms from providing their clients with advice that is not strictly financial in nature. The advisory body that can address all these needs in a comprehensive and coordinated manner is a Family Office. And if the investor\u2019s assets are not substantial enough to set up their own Family Office (Single-Family Office), their best option will be to engage a Multi-Family Office, that is, a comprehensive wealth management firm serving multiple families. Unfortunately, the concept of the Multi-Family Office as such is not yet regulated in Spain, unlike in other EU countries such as Luxembourg, but it is only a matter of time. Due to Spain\u2019s outdated legislation, modelled on the banking advisory model, companies such as ours that manage wealth comprehensively must do so legally by combining two business activities: EAFI+Multidisciplinary consultancy<\/strong><\/a>. And all because the Spanish regulator still falls short of its Luxembourg counterpart and prevents EAFIs from providing advice on matters other than purely financial ones, despite such advice being just as necessary \u2013 if not more so \u2013 than mere portfolio management for any family with a certain level of wealth. This is certainly absurd from an investor\u2019s point of view, but understandable when we consider that the regulator itself is essentially made up of corporate executives from the banking sector, rather than investors who should be ensuring the sound growth of their assets. I recommend the article entitled \u00abThe perversion of counselling<\/strong><\/a>\u00ab, in which we were already discussing these issues three years ago (incidentally, the shares involved in the Santander convertible bond scam mentioned in the article are still trading at the same price as back then, meaning that investors are still losing more than half their money three years on\u2026)<\/p>\n

In any case, investors with wealth management needs that go beyond mere financial advice should engage the comprehensive services of a Family Office, rather than relying solely on the financial services offered by EAFIs. The absurd legal restriction mentioned above, which prevents EAFIs from offering comprehensive wealth management advice, forces many of their clients to deal with their other non-financial wealth-related matters through a range of additional professionals (solicitors, estate agents, tax advisers, family business consultants, etc.). It also forces them to try to piece together, on their own, a complex jigsaw of disjointed advice and guidance. Receiving advice from a number of professionals in an uncoordinated manner is not only expensive but also highly inefficient and dangerous.<\/strong> Most of the decisions a family needs to make regarding its assets require expert multidisciplinary advice, which must also be fully coordinated. Investors with assets that extend beyond purely financial ones need a single point of contact comprising professionals who are specialists in each field, and who have a comprehensive understanding of their clients\u2019 wealth and family circumstances. This is precisely the essence of the Family Office\u2019s role, although Spanish regulation \u2013 much like the banking sector \u2013 insists on separating financial advice from other forms of wealth management advice.<\/p>\n

Oh, and the fees for a comprehensive Family Office service needn\u2019t be any higher than those of an EAFI, not at all. In short, depending on each investor\u2019s specific needs:<\/p>\n

Exclusively financial advice: EAFI<\/p>\n

Comprehensive wealth management advice: EAFI + Consultant = Family Office<\/p>","protected":false},"excerpt":{"rendered":"

Quiz\u00e1 para los que nos dedicamos profesionalmente a ello la respuesta puede resultar obvia. Sobre todo para los que hemos sufrido desde hace d\u00e9cadas en nuestras propias carnes las miserias y carencias de la banca privada. No en balde adem\u00e1s de asesores, fuimos, somos y seguiremos siendo esencialmente inversores, y como tales, nuestros intereses siguen […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51,57,58,39,40,47,52,37,48,55],"tags":[],"class_list":["post-3996","post","type-post","status-publish","format-standard","hentry","category-banca","category-funcionamiento-family-office","category-crear-mi-propio-family-office","category-crear-mi-propio-family-offices","category-gestion-financiera","category-gestion-del-patrimonio-inmobiliario","category-asesoramiento-patrimonial-multi-family-office","category-reflexion","category-asesoramiento-patrimonial-multi-family-office-crear-mi-propio-family-offices","category-necesito-un-family-office"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/3996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=3996"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/3996\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=3996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=3996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=3996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}