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Introducing the Institute for Wealth Management Standards

The aftermath of the financial crisis has seen many people talk about the world changing forever, but few have come up with any credible, long-term solutions that are ready for implementation, writes Marc Smith.

As policymakers and regulators grapple with how best to curb excessive risk taking, improve warning systems and generally clean up a bloated, rotten system, families of substantial wealth have been coming to terms with losing significant sums of money.

In particular, families are now looking for ways to avoid the disappointment created by trusting a wide range of asset managers and advisors in whom they put enormous amounts of trust.

It is against this backdrop that some of the private wealth management industry's leading lights began to put together a set of principles, the aim of which was to minimise the possibility of financial mismanagement and fraud for individuals, families, family offices, foundations and private trusts. (click here to read more about the Principles)

Charles Lowenhaupt, chairman of Lowenhaupt Global Advisors, one of the architects of the Principles of Wealth Management For Private Wealth Holders, said: "The Standards are an international effort to protect wealth and avoid a repeat of the fraud and mismanagement that have hurt so many families around the world. The Institute's purview is deliberately global because the Standards are designed to safeguard wealthy families, which today are global."

His view was backed up by a snap poll conducted by back in February, when by a margin of nine to one respondents agreed that a global standard would help to protect private wealth holders (click here to read the story in detail).

Buoyed by these results, Lowenhaupt and co-architect Don Trone, president and founder of the Foundation for Fiduciary Studies, began to establish a set of standards for private wealth holders, the results of which are launched today exclusively on

Trone said: "The Standards provide individuals and families with the first benchmark to oversee the management of significant wealth. History has shown that when an industry identifies and codifies its best practices into standards, it is possible to evaluate performance objectively. To move from draft Standards to approval, the Institute has begun a three-month public comment period to collect feedback and make refinements to the draft."

Designed to be adopted and implemented by family offices, trusted advisors and others who manage significant wealth, the Standards aim to achieve the following:

  • Help restore trust and confidence between wealth holders and advisors
  • Provide the basis for prudent practices and procedures that can be independently assessed across multiple jurisdictions and countries
  • Guide consistent decision-making and communication across all levels, including staff, money managers, and other service providers
  • Benchmark current status, prioritise work, and measure progress
  • Uncover procedural and behavioural risks of decision-makers or malfeasance
  • Allow wealth holders freedom from the burdens of wealth

The next stage of the process was the establishment of The Institute for Wealth Management Standards, an independent, non-profit organisation dedicated to advancing the Standards to a worldwide audience. Today, the IWMS, which is supported by Campden Media, is launching a consultation period and would like to hear from as many wealth holders as possible. Click here to have your say on the Standards.

"Personally and professionally, I want to urge wealth creators, wealth holders, trusted advisors and others who manage significant wealth to comment on the Standards and support this effort," Lowenhaupt said. "Working together, we can create a better future."

At a time of such uncertainty, the IWMS and the Standards hope to create a framework that families can adopt to professionalise governance procedures, improve risk management and investment management, and implement ongoing oversight and monitoring. The future security of the wealth you manage could well rest on you taking the lead in ensuring the best systems are in place.

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