The UHNW Institute’s August Theme: The New Allocation

Each month, The UHNW Institute identifies a specific industry theme to emphasize. Much of the content and programming we will highlight in August will be dedicated to The New Allocation, focusing on how ultra-high-net-worth families and firms are making major changes to asset allocation.

All monthly themes can be found in the 2023 Programming Calendar here.

Throughout the month of August, our content will focus on the interdisciplinary management of the financial, investment, real estate, collectible, equity and other assets that comprise a family’s wealth. To get started, we have selected the following resources related to The New Allocation, most of which are housed within our UHNW Resource Library, for members to explore this month to broaden their comprehension of this crucial industry topic.

1. Report – UBS – 2023 UBS Global Family Office Report

This report provides valuable insights into the evolving trends, challenges and opportunities faced by family offices in managing and preserving wealth. Through in-depth research and interviews with prominent family office executives, the report offers a unique perspective on the strategies, asset allocation and impact investing preferences of wealthy families across the globe.

2. Report – BlackRock –Global Family Office Report

In this report, BlackRock provides a comprehensive investor guide that offers an in-depth analysis of family offices around the world. This report provides valuable insights into the investment trends, challenges and strategies adopted by family offices to navigate the complex financial landscape. Drawing from extensive research and interviews with industry experts, the report sheds light on the evolving priorities of ultra-high-net-worth (UHNW) individuals and offers practical recommendations for optimizing investment portfolios and achieving long-term growth.

3. Podcast – Tom McCullough and Jean Brunel – Wealth of Wisdom – Constructing an Investment Portfolio to Support Family Goals

In this podcast episode, host Tom McCullough interviews investment expert Jean Brunel to discuss the challenges individuals and families face when constructing investment portfolios that align with their specific goals. They highlight the importance of considering multiple goals with different time horizons and decision markers and emphasize the need to factor in costs, such as taxes, when adjusting asset allocation. Through practical examples and statistical analysis, they guide listeners through the process of setting goals, identifying sub-portfolios for each goal and combining them to develop an overall investment portfolio.

4. Book – Gregory Curtis — Family Capital: Working with Wealthy Families to Manage Their Money Across Generations

This book provides practical lessons on wealth management by following a prototypical wealthy family through several generations and multiple family units to show what effective family capital management looks like long-term. It allows the reader to “listen in on” meetings between the family and its wealth advisor as they grapple with the many challenges family investors face. It also provides helpful guidance in finding an advisor you can trust, evaluating their performance, and how you can take the lead role in managing your wealth with the right advisor by your side.

5. Book – Ashvin Chhabra –The Aspirational Investor 

In this book, Ashvin Chhabra, one of the fathers of goals-based wealth management, expands on his seminal paper, The Wealth Allocation Framework. It provides a practical and very accessible explanation and understanding of how behavioral finance and goals-based investing can be applied in the real world.

6. Video – Daniel Kahneman – Behavioral Finance

Widely regarded as one of the world’s most influential living psychologists, Daniel Kahneman won the Nobel in Economics for his pioneering work in behavioral economics — exploring the irrational ways we make decisions about risk. Now in this excellent video, he talks about why we make the decisions we do about investing and how we can improve our outcomes.

For this month, we also have a special request: We would like to hear from you! How are you seeing asset allocation evolve given the era of ample liquidity and low interest rates is coming to an end? How are the families you serve managing these changes within their own portfolios? Is investing in traditional asset classes down, and alternatives up, and in what specific areas? Are we collectively seeing a shift away from private equity and toward short-duration fixed income and hedge funds as diversifiers? Is high inflation the top worry for family offices in 2023? Join the conversation in our Community Forum topic: The New Allocation within the UHNW Institute member portal.

On a final note, as many of us squeeze in family trips and downtime for this last month of summer, we will take a break from regular programming this month and invite you to enjoy a refreshing summer treat, The UHNW Institute Summer Reading List, a curated collection of great reads, podcasts and faculty favorites to fill your bookshelf or device. This reading list includes industry and work-related topics, as well as guilty pleasure reads and resources. Enjoy the sunshine! 

If you have any questions about this month’s theme or are interested in joining The UHNW Institute, please do not hesitate to contact us.