A Wealth of Information

Bailing Out:
The Fiduciary Duty
Investing is a two-way street, as much a matter of knowing when to take profits as when to buy. "Under Florida's Prudent Investor Rule, you are required to monitor a portfolio and you're required to have a sell strategy," says John Pankauski, of the Pankauski Law Firm in West Palm Beach. "There were lessons learned from recent bear markets where money managers weren't selling and incurring excessive amounts of losses in portfolios. So as a fiduciary, knowing when or how to implement a sell strategy is very important."

No Will? No Way
Mellon Financial's private wealth management group says getting clients to think ahead and develop a comprehensive succession plan isn't as easy as it may seem. "You'd be surprised how many people we find who have gotten to a point where they have accumulated significant wealth but haven't really put in place an estate plan that accomplishes all of the objectives that they need for the succession of their money to the next generation," says Joe Fernandez, senior director of Mellon's private wealth management group in Miami.

Fernandez says it often takes a change in a client's life -- such as a major life event, contemplating retirement or thinking about his or her own mortality -- before he or she begins to seriously consider estate planning. More often than not, he says, clients have been too busy accumulating wealth to think about what they'd like to do with it.

"Lots of times people don't really know what they want their money to be when it grows up," he says. The sooner that discussion begins, the better for all concerned, Fernandez says.

Shifting Opportunities

A recent Merrill Lynch and Capgemini world wealth report cites three investment arenas in which high net worth individuals (HNWI) increased their fortunes from last year: Investments in the Asia Pacific region, Latin America and real estate.

Going forward, the report expects HNWIs to continue to transfer assets away from mature markets and into emerging ones.

"We live in a global environment where information is shared at a much greater speed than we've ever seen in the history of the world," says Kemp C. Stickney, president of Wilmington Trust FSB, Florida. "And we've got to keep that in mind when making asset allocation recommendations."

As for real estate, Stickney doesn't see Florida's bubble affecting his clients. He sees the wealthy in the state as so skilled in their real estate holdings, whether REITs, residential or commercial property, that it's not as big an issue as it is for those who bought on speculation and planned on flipping. "For the wealthy, it's kind of sit and wait."

Tags: Banking & Finance