Family offices perform an extremely important role for high-net-worth individuals (HNWIs) by providing an array of services aimed at preserving and growing wealth. A family office is often tasked with overseeing investments, estate planning, tax management, trust administration and various other crucial tasks.
One area where family offices are taking an increasingly keen interest is structured investments and derivatives. The asset class offers many wealth management benefits for HNWIs who wish to diversify their investment portfolio.
However, many family offices do not have the expertise in-house to effectively harness the opportunities that structures can provide. Some family office managers may also actively avoid structured investments due to negative media coverage that classifies them as dangerous, opaque and complex.
At Affinity Capital, we’re passionate about supporting family offices that have £50 million or more to invest in structured investments and derivatives. With the right knowledge, experience and advice at your disposal, structures and derivatives can form a central protection component of many family offices’ investment strategies.
Every family office is committed to providing the best outcomes for their clients. In keeping with this, family offices must keep abreast of any developments in the wealth management sphere that can optimise client portfolios.
A key issue then arises. Who can family offices turn to for independent pricing and expertise? Traditionally, the only entities with relevant skills and pricing ability were the investment banks themselves. Asking an investment bank or their private bank for impartial and independent feedback on their own offerings is a huge conflict of interest. So where can these family offices turn for wholesale independent advice and expertise?
Structured notes are a relatively new breed of financial instrument, and only became active in the UK in the early 1990s. However, they have grown in popularity over the years because they offer predefined returns, capital protection and participation in a range of markets that investors may normally find inaccessible.
Another key advantage of structured investments is that they typically provide returns across various scenarios, including up, down and flat financial markets. This characteristic can prove useful when the economic landscape is particularly volatile.
No two family offices are the same, which means there is no one-size-fits-all solution regarding structures. Whether an organisation is a single- or multi-family office, it requires a financial investment boutique that takes a holistic approach to its needs.
Affinity Capital provides a full range of services that put family offices at the centre of the structuring process, ensuring clients are fully informed every step of the way. After all, structures and derivatives are much more than financial products that can simply be bought and added to an existing portfolio.
Structures provide the best returns when they are tailored specifically to a family office’s requirements. Affinity can help family offices analyse their current portfolio and design the ideal structured investment vehicle for their unique purposes.
We decompose the entire process by understanding the family’s complete portfolio. We then work with and educate family offices around the use of derivatives and structures within the context of their existing portfolio. This collaborative approach ensures that the family office managers can then give accurate and detailed advice and updates to their family regarding structured investments.
Crucially, Affinity understands the importance of discretion to family offices, which is why we provide all our services with complete anonymity when required. We are happy to fulfil the role of a silent partner, allowing family offices to fully benefit from our extensive experience and expertise.
When family offices lack the resources to manage structures themselves, outsourcing these services is often the only way to provide a comprehensive offering to HNWI clients.
Securing best pricing on structured investments requires a number of key elements. Firstly, family offices need access to a range of investment banks to ensure competitive quotes. Fully independent advice and analysis of the available options is also important.
Affinity Capital can provide all this and more, with state-of-the-art pricing models, an extensive suite of trade support services, modern IT infrastructure and long-term relationships with key investment banks.
We offer a complete end-to-end solution for all our structured investment trades, ranging from idea generation and structuring, through order collation and booking to settlements and after-trade care. Here at Affinity, we are confident that we provide a truly unique best execution service to family offices that helps guarantee long-term profitability.