Offshore trusts are estate planning tools that grant individuals legal jurisdiction outside of the U.S. They tend to be multi-generational, held in jurisdictions that don't have a statute of limitations and often encompass an unwieldy number of beneficiaries thereby increasing the potential for conflict.
As a result, offshore trusts are often challenging vehicles for ESG investing, according to Shelly Meerovitch, co-head of global families at Bernstein Private Wealth Management.
Challenging for fiduciaries, but not impossible.
“There are two primary tools for fiduciaries,” says Meerovitch. “The first is ESG integration, which essentially takes the ESG considerations along with traditional financial ideas. The goal is always to get the best risk-adjusted return.”
“The other tool is ESG focused strategies, and those, along with financial performance, also aim to achieve non-financial goals as well,” Meerovitch said.
Those non-financial goals are harder to measure, says Meerovitch, so it's vital for a fiduciary opting for the focused strategy to think about a clear objective measurement of that performance.
An investment policy statement can help clear things up by setting up in advance standards that the family and the beneficiaries involved agree upon.
“It could deal with the time horizon of the ESG investment. The monitoring that the family wishes to have over those investments. The need for diversification. The need for rebalancing,” said Meerovitch. “All of those things could be addressed in advance and use the beneficiaries as co-investors, if you will, as partners in the investment process that would hopefully lower the risk of litigious environment later for the fiduciary.”
Lawsuits and legal actions generally don’t make for fun family affairs of course. That’s why Meerovitch says it is always best to get beneficiaries to buy into the plan before they invest.
“After you invest, you can do an accounting or a reporting and get them to sign off. The challenge there is that sometimes you have beneficiaries that aren't able to sign off like minors or unborns, and then you need to look to representation of classes of beneficiaries,” said Meerovitch.
"The most effective strategy for getting and keeping everybody onboard is through ongoing beneficiary involvement," says Meerovitch. "And that includes the investment policy statement, annual meetings and similar tools that “encourage communication, encourage collaboration, and hopefully get a shared goal for the family to work together towards.”
A private partnership, Edward Jones is a giant in the retail brokerage industry with more than 20,000 financial advisors.
Meanwhile, Raymond James and Tritonpoint Partners separately welcomed father-son teams, including a breakaway from UBS in Missouri.
Paul Atkins has asked staff to solicit public comment on novel ETFs, pausing the clock on as many as 24 filings linked to the booming event contracts market.
From 401(k)s to retail funds, Deloitte sees private equity and credit crossing into mainstream investing on two fronts at once.
Big-name defections from Morgan Stanley, UBS, and Merrill Lynch headline a busy two weeks of recruiting for the wirehouse.
Wellington explores how multi strategy hedge funds may enhance diversification
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
