Tag: wealth management

Feb 14th

More than Wealth Management: The Whittier Difference

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.

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Feb 11th

Exceptional Returns With Hybrid Investing

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.

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Feb 7th

Guarding Ultrawealthy Clients and Their Networks From Identity Theft

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. 

Featured in Financial Planning Magazine. For more information about how a family office can help protect you, your family, and your estate from identity theft, 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.

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Feb 5th

The Overlooked Key to Multigenerational Wealth: Proactive Estate Planning

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.

Sharon Perlin is a Senior Vice president and Client advisor at Whittier Trust's Seattle Office, which celebrates its 25 anniversary this year.

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.

 

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Jan 21st

Whittier Trust Celebrates 60 Years in the Pacific Northwest

Company Proudly Marks 25th Anniversary in Seattle 

Whittier Trust, the oldest multi-family office headquartered on the West Coast, celebrates two major milestones in 2025: 60 years of service to the Pacific Northwest and the 25th anniversary of our Seattle office. Our legacy in the Pacific Northwest began in the 1960s with founder Paul Whittier's vision and passion for the region. With a rich history and an enduring commitment to clients, Whittier Trust has been a trusted partner to generations of families and local community organizations throughout Puget Sound.

“As we celebrate six decades in the Pacific Northwest and 25 years since opening our Seattle office, we are immensely proud of our rich history and enduring commitment to our clients and the region’s future,” says David Dahl, President and CEO of Whittier Trust. “We look forward to upholding our dedication to excellence and delivering tailored wealth management, family office and trust services for generations to come.”

The Whittiers were visionaries who recognized the potential of the Pacific Northwest. Their passion for the region’s natural beauty initially led them to Goudge Island in British Columbia, which they purchased in 1949, and then to the San Juan Islands, where they dedicated themselves to philanthropic endeavors. 

Today, Whittier Trust’s support of local organizations—including the Friday Harbor Airport, Seattle’s Museum of Flight, San Juan Airlines, Shuttle Express and the San Juan Community Theater—continues to leave a lasting impact on the community. The Whittier Trust team remains actively engaged in supporting these vital entities.

“Paul Whittier’s vision to expand our family office, wealth management and trust services to multi-generational families in the Puget Sound region—anchored by the values of duty, loyalty and commitment—continues to inspire us as we build on our strong foundation,” says Nickolaus Momyer, Northwest Regional Manager, Senior Vice President and Senior Portfolio Manager at Whittier Trust. “We are proud to honor the Whittier Family’s legacy by delivering innovative solutions and personalized service to our clients.”

To view a timeline commemorating the Whittier family’s legacy and Whittier Trust’s impact throughout the region, click here.

Beyond its impact in the Pacific Northwest, Whittier Trust is globally recognized by the Society of Trust and Estate Practitioners (STEP) as one of the top five multi-family offices in the world. The company has also been named one of Washington’s 100 Best Workplaces by the Puget Sound Business Journal, underscoring the company’s dedication to cultivating a positive, productive work environment that empowers its team to exceed client expectations.

Throughout this year, Whittier Trust will host several events and programs to deepen relationships with clients, their families and the local community. Follow Whittier Trust on LinkedIn to learn more about these initiatives and how the company plans to honor this commemorative year. 

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For more information about Whittier Trust's wealth management, estate planning and family office 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.

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Jan 17th

Strategic Wealth Planning for UHNWIs for the Second Trump Administration

The new year will present challenges and opportunities for ultra-high-net-worth individuals as they re-evaluate their portfolios and long-term financial plans in light of President-elect Donald Trump’s incoming administration. Strong partnerships between UHNW clients and their advisors will be essential during this transition and the ensuing four years. Proactive planning will be key, especially given potential shifts in tax laws, market dynamics and interest rates.

Tax Law

Before Trump’s election in November, many ultrawealthy families were scrambling to optimize their estate plans ahead of the scheduled sunset of the Tax Cut & Jobs Act to take full advantage of exemptions while they remained in place and to adjust estate plans when and if those exemptions reverted at the end of 2025.

The policy uncertainty in 2024 paved the path for families and their advisors to give more consideration to their legacy and how it will affect their extended family in the future. The impending tax law change forced conversations around important estate planning considerations such as dispositive provisions, age attainments, and wishes for the use of the hard-earned wealth for future generations. The difficult decisions around the mechanics of intergenerational wealth were front and center leading up to the election.

However, with the incoming administration, it’s likely that the TCJA will be extended or even made permanent. UHNWIs and their advisors should continue to review their estate plans and build on those important conversations despite having more time to approach their plans strategically.

This extended horizon also allows for a renewed focus on aligning investments and real estate strategies with enduring goals, emphasizing tax efficiency, diversification and legacy planning. Advisors should take this opportunity to evaluate the use of tax-advantaged structures, optimize trusts and consider philanthropic vehicles that can minimize tax burdens while fulfilling broader family objectives.

Market Dynamics

From deregulation to policy shifts on renewable energy sources to protectionist economic policies, Trump’s election will hold many implications for investors and their portfolios.

The stock market’s reaction to the election results was initially positive. The day after the election, 3 in 4 companies traded higher, with the three major indices reaching record highs. As investors digested the possible policy changes under the new administration, markets in November saw a strong post-election rally, led by small-cap stocks and supported by gains in large-cap indices. However, recent Federal Reserve interest rate cuts and signals of a cautious monetary policy approach for 2025 have sparked turbulence, with major indices like the Dow, S&P 500 and Nasdaq experiencing sharp declines in mid-December.

Projected winners are expected beneficiaries of deregulation including banks; energy-related companies (especially in the liquified natural gas space); cryptocurrencies, particularly bitcoin; technology companies facing increased anti-trust exposure; and Tesla with Elon Musk leading the newly formed Department of Government Efficiency, or DOGE, committee.

Projected losers are companies in the renewable energy space, including EVs not owned by Elon Musk and utilities invested in renewable energy sources. Other losers, given Trump’s protectionist platform, include international companies broadly, and China specifically.

It is still unclear how the markets will treat healthcare companies. Managed care organizations initially saw a bump in anticipation of a hoped-for easing in pricing scrutiny.  Since the election, MCOs have been selling off (CVS Health’s Stock has fallen 24% in December with UnitedHealth Group and Cigna Group also experiencing substantial declines), with the expectation that they may be more heavily scrutinized if Robert F. Kennedy Jr. is confirmed to head the Department of Health and Human Services. The industry-level volatility may create opportunities for investors with the ability to tolerate short-term pricing aberrations if the policies are more moderate than feared.

Seriously, Not Literally

As the markets react and overreact to policy decisions, we are reminded that the new administration should be taken "seriously" but not "literally." Advisors and clients should keep in mind that administrations rarely achieve everything they set out to do. The challenge will be to react to a broader understanding of what the administration intends to focus on rather than fearing the most radical proposal or enacted policy.

Regardless of what policy shifts come to pass, the time-honored values of successful planning remain the same: prioritizing long-term strategies, tax efficiency and high-quality companies. It’s important for the advisor to encourage clients to stay disciplined, avoid being too hasty to react, and emphasize strategic consistency within a portfolio.

Having said that, it’s also important to communicate often with clients about shifts and expected changes within market cycles, as there are opportunities to be seized within any market environment.

Caleb Silsby is the Executive Vice President, Chief Portfolio Officer at Whittier Trust, overseeing a team that collaboratively manages portfolios for high-net-worth clients, foundations, and endowments. He is credentialed as a CFA Charterholder and CFP professional.

Featured in Barron's. For more information about private market investments, start a conversation with a Whittier Trust advisor today by visiting our contact page.

 

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Jan 14th

Who Should Be the Trustee of My Real Estate Portfolio?

Make sure your family’s property assets are stewarded from one generation to the next.

The story of family wealth-creation in the West is not complete without a discussion of the role real estate has played in building multi-generational legacies. This is true throughout the region but specifically so in California. Almost every entrepreneur has a balance sheet that includes significant real estate assets in addition to whatever operating business may be the primary driver of the family’s fortune. In our experience at Whittier Trust, many of these entrepreneurs think of real estate as the “simple” part of the balance sheet. Buy the property, maintain the property and collect the rent—easy, right?

Those of us who work with families holding large real estate portfolios know all too well that, while it may seem simple on the outside, the day-to-day of owning real estate is far from easy. The glamor in real estate comes from the acquisition and the disposition and rarely from the details of operating the property. As it is often said, the devil is in those details!

Multi-family housing is a good place to start our discussion since it may be the asset class that requires the most hands-on attention by owners. Units must be rented and common areas maintained, but there are a whole host of other considerations. What tools are employed to monitor market rental rates to ensure rents are sufficient? Is there someone in the family who will perform the day-to-day supervision of property management, or will they oversee an outside management company? Who is vigilantly reviewing insurance markets and the myriad of local governmental regulations concerning housing? Property management of multi-family buildings is fairly labor intensive and while the wealth-creating generation may do this work themselves, it is important to consider whether there is someone with the interest and aptitude in the next generation. If not, seeking a professional fiduciary may be a good option.

Commercial and industrial buildings may be less hands-on, particularly if there are triple net leases in place. However, when vacancies arise, the buildings must be properly marketed to maximize the family’s return on the asset. What if there is damage to a building caused by a fire or a natural disaster? Who will vet potential new tenants for creditworthiness and overall desirability?

When talking with families about succession planning concerning their real estate assets, our team at Whittier Trust often finds that the older generation who has been performing these oversight and management activities will downplay the difficulty involved and the skills required to successfully operate the real estate portfolio. We will hear things like “All they have to do is deposit the rent checks and pay the insurance and property taxes.” In our experience of serving as a successor trustee in innumerable trusts with real estate, there is always more to the story than depositing checks and paying a few bills. 

In the worst-case scenarios, we see surviving spouses who have never been involved in operating the real estate being named as the successor trustee. This is usually done to provide the spouse with control, but there are better ways to accomplish this objective. An unprepared or unskilled spouse can easily make costly mistakes. Frequently, the surviving spouse is an older person who may not be fully able to appreciate and understand the responsibilities they’ve been given. They may experience confusion or even be susceptible to undue influence. This is a particularly difficult situation if the surviving spouse is the stepparent of the ultimate remainder beneficiaries. We often see litigation result in these cases. 

A best practice is to be as thorough and thoughtful about the succession plan for the management of the real estate as one would be in the planning for an operating business. Corporate trustees who have a history of direct real estate investment and management of a variety of assets, make good succession partners. The family can always be given control by holding the power to remove and replace the corporate trustee—a far better solution than having an ill-equipped family member serve in a fiduciary capacity. 

Selecting an experienced and trusted partner who can enter the situation when needed helps preserve and enhance the value of the real estate assets for generations to come.

Written by Thomas J. Frank, Jr., Executive Vice President, Northern California Regional Manager, Whittier Trust.

Featured in Mountain Home Magazine. For more information about trustee services or transitioning a real estate portfolio to the next generation, 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.

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Jan 6th

Getting Started in Private Market Investment

Investor interest in private markets has surged over the past decade. To understand why, it's essential to grasp what these investments entail and the factors driving their growth. Here, we offer insights into the complexities and benefits of private market investments and outline Whittier Trust's distinctive approach.

Demystifying Private Market Alternatives

Private market alternatives might sound exotic, but they're essentially the private counterpart to public markets. Publicly traded stocks represent ownership in public companies. Private equity is simply ownership of a private company. The key distinction between public and private markets is liquidity. Public shares can be easily bought and sold on exchanges, whereas private equity investments may be subject to transfer restrictions and may require specialized brokers to facilitate transactions.

The Appeal of Performance

So why is investor interest in private markets growing so rapidly? The answer lies in performance. A report by Hamilton Lane found that over the past 20 years, returns from private equity buyouts outperformed global equities on a public market equivalent basis. This trend extends to private credit, which has also delivered more income compared to the public leveraged loan market, particularly appealing during low-interest environments.

Expanded Opportunities and Diversification

Beyond performance, the expansion of investment opportunities is a significant driver of interest in private markets. The number of public companies in the U.S. has declined by 50% since 1996, while private equity firms now own more companies than those listed publicly. Globally, the number of private companies with revenues over $100 million is over eight times that of public companies. This shift provides a broader array of investment options and helps mitigate concentration risk in public markets, where the top 10 firms currently account for over 35% of the S&P 500’s value.

The Whittier Trust Approach

It’s important to note that private markets come with additional risks, costs, and complexities, notably illiquidity. At Whittier, we use private markets to complement our core internal strategies, enhancing returns, diversification, and cash yield. This hybrid approach combines top-tier internal investment management with best-in-class private market managers.

Quality and Alignment of Interests

Quality is a cornerstone of Whittier’s investment philosophy. We believe that quality in public markets, and private markets, and the managers we partner with, are key to compounding wealth. This focus on quality extends to the selection of private market opportunities and partners.

Crucially, Whittier's incentives are aligned with client interests. We are not compensated by private equity managers to raise capital, nor do we incentivize employees to direct client assets to private markets. This conflict-free approach ensures that decisions are made solely in the best interests of clients, avoiding the pitfalls of added fees, commissions, and feeder expenses that can erode returns and turn good investments into poor results.

Strategic Integration and Expertise

Whittier Trust integrates private market investments as part of a holistic, diversified portfolio strategy. We view private investments as an extension of public market opportunities. With companies staying private longer, substantial value creation occurs before potential public offerings. Investing in private entities like SpaceX, which remains private and valued at over $200 billion after 20 years, exemplifies the potential for significant returns.

Final Thoughts

Private market investments offer expanded opportunities and the potential for superior returns, but they come with added risks and complexities. Private investment should be considered when after-tax returns, risks, and correlation characteristics more than compensate for higher costs and lower liquidity.

With a focus on quality, a conflict-free approach, and a strategy that integrates private and public market opportunities, Whittier Trust positions itself as a trusted partner for ultra-high-net-worth investors navigating the private market landscape. Whether you are new to private markets or seeking to deepen investments, Whittier’s expertise and alignment with client interests ensure a thoughtful and strategic approach to wealth compounding.

Written by Eric Derrington, Senior Vice President and Senior Portfolio Manager at Whittier Trust. Eric is based out of the Pasadena Office.

Featured in Kiplinger. For more information about private market investments, 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.

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Dec 19th

Navigating a Challenging Landscape: Key Considerations for UHNWIs Amid Interest Rate Cuts

In September 2024 we saw a Fed interest rate cut of 0.5 percentage points and another rate cut of 0.25 in November. Now, as we start 2025, The Fed is considering additional rate cuts. For ultra-high-net-worth individuals (UHNWIs), shifts in interest rates carry significant implications for wealth management strategies. Lower interest rates—though more elevated than in prior cycles—can influence everything from investment decisions to long-term planning. To navigate this landscape effectively, Whittier Trust advises affluent families to check in with their advisors to assess risks, seize opportunities, and safeguard their legacies.

Here are five essential questions to guide those conversations:

1. How Should My Investment Strategy Adjust to Reflect Market Conditions?

Interest rate cuts tend to buoy stock valuations, often making equities a more attractive option than bonds in certain scenarios. However, the dynamics of today's market—where interest rates remain higher than historical lows—warrant a nuanced approach. UHNWIs should ask their advisors about the wisdom of rebalancing their portfolios to capitalize on sectors poised to benefit from economic growth spurred by rate cuts.

For example, technology and consumer discretionary sectors often thrive when borrowing becomes more affordable, stimulating corporate growth. Conversely, some traditionally defensive sectors may underperform. The goal is to ensure your portfolio is positioned to benefit from rate-driven shifts while maintaining the long-term diversification necessary to weather economic uncertainty.

2. What Role Should Bonds Play in My Portfolio Now?

While bond yields have been suppressed in recent years, even modest increases in yields can make fixed-income assets more attractive as part of a diversified portfolio. Families relying on predictable income streams should consider whether their bond allocations need adjustments to optimize for yield and risk.

Ask your advisor if now is the right time to reintroduce or increase exposure to investment-grade bonds, municipal bonds, or alternative fixed-income vehicles. The relationship between rising bond yields and overall portfolio performance should be carefully analyzed to avoid unintended risk.

3. Is My Portfolio Adequately Hedged Against Inflation?

Lower interest rates stemming from Fed rate cuts often coincide with muted inflation, which can diminish the urgency of inflation-hedging strategies. However, inflation trends are dynamic and UHNWIs must remain vigilant. Ask your advisor to review whether your current portfolio includes sufficient protection against potential inflationary pressures in the future.

Real assets, such as real estate and commodities, can serve as hedges while offering diversification benefits. Meanwhile, Treasury Inflation-Protected Securities (TIPS) may be less necessary in a low-inflation environment. An advisor's expertise can help you fine-tune the balance between inflation protection and growth-oriented investments.

4. Are There Opportunities for Alternative Investments in This Environment?

Lower interest rates often drive interest in alternative investments, which can offer uncorrelated returns and enhanced growth potential. Private equity, venture capital and real estate are often key areas of focus for UHNWIs seeking to diversify and capitalize on rate-driven opportunities.

A crucial question to ask your advisor is whether the timing aligns with your financial goals and risk tolerance. In a shifting rate environment, access to exclusive investment opportunities through private markets can complement traditional portfolios, particularly for families with multigenerational wealth aspirations, but it’s important to ensure this decision is right for you.

5. How Can We Leverage Lower Interest Rates for Long-Term Wealth Transfer?

An interest rate cut creates potential opportunities for intergenerational wealth planning. Lower rates can reduce the cost of intra-family loans, making it more affordable to transfer wealth in ways that minimize estate and gift tax exposure. Additionally, strategies like grantor-retained annuity trusts (GRATs) become particularly attractive in a lower-rate environment. 

Meet with your wealth management advisor to evaluate how the current rates align with your estate planning objectives. By employing rate-sensitive strategies effectively, families can amplify the impact of their wealth transfers while preserving their legacy.

Partnering for Strategic Decisions

Navigating this period of post-pandemic inflation, one currently defined by periodic Fed interest rate cuts requires strategic decision-making and close collaboration with your advisor. Every family’s financial situation is unique, and a tailored approach is essential.

The interplay between interest rate cuts, market trends, and long-term goals underscores the importance of regularly revisiting your financial and estate plans. These five questions provide a strong starting point for meaningful discussions with your advisor, helping you adapt to evolving market conditions while safeguarding your family’s future.

An experienced advisor not only understands the technical aspects of wealth management but also acknowledges the emotional considerations that come with stewarding significant assets. By focusing on both, UHNWIs can position themselves for success across generations, regardless of economic shifts. At Whittier Trust, we’re committed to helping you navigate these complexities with a customized, thoughtful approach that evolves alongside your goals.

For answers to these questions and more, 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.

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Dec 16th

Finding The Right Family Office

For high-net-worth individuals and families, a family office can optimize giving, investing and more.

The term “family office” is frequently used, but what exactly does it mean and how are these services delivered? Each high-net-worth family needs a full complement of professionals to manage their needs. What does this look like? There are probably as many configurations of a family office as there are families that use them. Here, we explore some of the many functions a family office may fill in the lives of wealthy families. 

What is a Family Office?

Typically, when we talk about family offices, we think of one or more financial professionals working with wealthy individuals to help them manage their financial lives. This may range from a single “personal CFO” or even a bookkeeper to a team of dedicated employees or an outsourced resource like an accounting firm or multi-family office. 

Who Might Need a Family Office?

Typically, wealthy individuals and families with multiple business interests and a complex ownership structure, including trusts, corporate entities and partnerships, might be well served by a dedicated team. If the beneficial ownership of the assets includes various family members and different generations, then a family office may be an excellent way to optimize investing and reporting. 

Financial Reporting 

At a minimum, most family offices will provide a level of financial reporting and bookkeeping. This will often include paying bills, coordinating insurance and reconciling bank and other financial statements. Depending on the level of assets and complexity, this financial reporting function may be split among a bookkeeping staff and a true accounting/tax staff. Even if the actual tax compliance work is outsourced, many family offices will have CPAs on staff to coordinate tax documents, review returns and schedule payments. These same professionals may also provide tax planning to family members. 

Financial reporting often includes balance sheet and cash flow reporting, broken out by legal entity. In situations where there are multiple family members with split ownership of investing entities, rolled-up reporting by family members is often desired. Cash flow projections and budgeting services are also quite common. For very sophisticated offices, asset allocation and investment performance reporting will also be provided to the family. 

Investment Oversight

Investment functions provided by family offices vary. In some situations, the family members will direct their own investments. In other cases, the family members may have a particular area of investment interest, for example, real estate, and then have investment professionals on the family office team who will either oversee outside managers or directly invest assets themselves, or both. Very large family offices will often resemble major investment firms, with a Chief Investment Officer and managers who specialize in particular asset classes. 

Legal Services

Family offices are often a compliment to the family’s legal team. Larger family offices may have in-house counsel who coordinates the delivery of legal services to the users of the family office. Like the investment function, for very large family offices, a staff of practicing attorneys will perform most basic legal services but work with outside counsel for complex matters, allowing the outside counsel to practice at the higher levels.

Philanthropy

If a family is particularly philanthropic, it may have a private foundation or a very large donor-advised fund. If they’re running their own family foundation, there is usually some level of staffing by philanthropic professionals. This can range from grant-making to full-on compliance services. Of course, the very largest private foundations will have staffs that rival large public nonprofits. Once families are beyond the first-generation wealth creators, it is rare that they don’t use some type of professional philanthropic assistance. 

Family Governance and Family Continuity

The family office may replace the governance structure once provided by an operating business. Whether or not this is the case, multi-generational families of significant wealth tend to benefit from the structure provided by a family office as they can provide a framework for the family to make decisions concerning shared assets and philanthropic goals. In addition, teaching younger generation family members about finances is frequently an important job of the family office. 

Types of Family Offices

As mentioned earlier, the term “family office” can be used to describe everyone from a bookkeeper to a full-time staff covering multiple disciplines. It is generally only the very wealthiest individuals or families who can afford the costs associated with building all the capabilities in-house. 

There are several stand-alone multi-family offices around the United States. These multi-family offices usually provide the services already mentioned, but are typically more economical and can be a more effective choice than a single-family office thanks to their proven infrastructure and access to diverse and comprehensive expertise. Most of these were established by a single family who then expanded their services to include other wealthy families. Multi-family offices are also often set up as trust companies, so they are able to also serve as a fiduciary for the family by acting as the trustee and executor. They typically serve a limited number of individuals and families and offer bespoke solutions depending on the needs of each client's family. 

There are also registered investment advisory firms that offer family office services. Typically, however, they are unable to serve as a trustee as their business models center around providing investment management. Several national banks offer divisions that provide family office services, often tied closely with banking and investment products. 

Next Steps

Each individual and family will need to carefully consider the assistance they require prior to either launching their own family office or securing outsourced support. It is not uncommon for each generation of a family to either reaffirm the choice made by the preceding generation or strike out on a different path. After all, as a family gets generationally further from the wealth creators, the wealth typically becomes dispersed and various family members will have different goals and objectives. 

For those families who make the choice to have family office services, whether they build their own or outsource, a clear understanding of what the family is seeking from the provider and ways to measure against the expectations will be essential. 

Featured in Mountain Home Magazine.

Written by Thomas J. Frank Jr., Executive Vice President and Northern California Regional Manager at Whittier Trust. Tom is based out of the San Francisco Office and oversees the investment team for multiple Whittier Trust offices.

For more information, 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.

Contact Us
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