The world added eight billionaires a week in 2020, taking the total number to a record 3,288 with a total net worth of $14.7 trillion, according to Hurun Global Rich List 2021. This is a marked increase from 2,604 billionaires with a total wealth of $9 trillion recorded in 2019. Of all global billionaires currently, 71 per cent are self-made including 231 self-made women, an increase of 51 from last year.
The number of single-family offices globally, rose from an estimated 1,000 to more than 10,000 in less than a decade. Following this trend and given that the biggest reason for the increase in the number of family offices was higher levels of individual and family wealth, globally, it is expected that there will be an increase in family offices and/or wealth management companies that offer family office services in response to the spike in the number of billionaires.
The Oppenheimer Family Office Services (OFOS) is not a stand-alone family office but is included as part of the services offered by Oppenheimer & Co. Inc. (Oppenheimer). Oppenheimer is self-described as a global full-service brokerage and investment bank of over 130 years’ experience providing individuals, families, corporate executives, foundations and endowments, charities, pension plans, businesses and institutions with innovative, customized solutions, through their financial expertise, to help them achieve their goals. It has four offices globally, an Asia office located in Hong Kong, a Europe office located in London, an Israel office located in Tel Aviv and the headquarters in New York, United States.
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OFOS assists “a family office to offload investment management and other ongoing financial services on behalf of their clients, while maintaining oversight.” This could include the day-to-day administration of a family’s affairs; assistance with preserving and growing wealth of multiple family members across generations; providing an investment platform that offers a broad range of carefully selected and monitored funds across various assets classes including alternative investments; philanthropic initiatives; the purchase or sale of businesses that family office clients may own and setting retirement/pension plans.
Oppenheimer Private Client Division
Through its Private Client Division (PCD), Oppenheimer provides a comprehensive array of financial services – including OFOS, through a network of approximately 1,032 financial advisors in 93 branch offices throughout the US. As of 2019, Oppenheimer’s PCD had $91 billion assets under administration, an increase from $78.7 billion in 2015.
In its 2019 Annual Report, Oppenheimer Holdings reported a gross revenue of $1,033,379,000 of which the Private Client Division accounted for $653.4 million of the revenue. However, clients include high-net-worth individuals and families, corporate executives, and small and mid-sized businesses, so it is unclear how much of the revenue came from UHNWIs.
Forbes’ 2019 Top 250 Next-Gen Wealth Advisors ranking, included 6 advisors from Oppenheimer. Ed Harrington, Head, PCD stated, “I’m proud to see six Oppenheimer Financial Advisors receive this honorable designation. As we enter a new era in wealth management, how we cultivate the next generation of talent is extremely important to us. These individuals exemplify Oppenheimer’s values and their dedication to serving clients’ evolving needs is admirable. We look forward to supporting their continued success and celebrating their contributions to our firm’s future growth.”
Corporate Governance
Oppenheimer Holdings Inc (Oppenheimer Holdings), a publicly traded company listed on the New York Stock Exchange, is the parent company of Oppenheimer, and its corporate governance guidelines are applied to all Oppenheimer Holdings companies, globally, including Oppenheimer of which OFOS is a part. The guidelines include an Audit Committee Charter; Code of Conduct; Compensations Committee Charter; Compliance Committee Charter; Nominating/Corporate Governance Committee Charter; Statement of Corporate Governance Guidelines and a Whistleblower Policy.
Oppenheimer is overseen by the Board of Directors of Oppenheimer Holdings and a Management Committee.
i. The Board of Directors of Oppenheimer Holdings oversees the management of the business affairs of the Oppenheimer group of companies globally and is charged with providing direction and oversight to the senior management, as well as to oversee the strategic direction of the Oppenheimer Group. According to the Corporate Governance Guidelines of the company, members of the Board do not need to be well-versed in the business of Oppenheimer itself but are expected to provide guidance through their business expertise. The current members of the Board include Evan Behrens, Managing Member, B Capital Advisors LLC; Timothy M. Dwyer, founder and former CEO and Chairman, Entitle Direct Group Inc; William J. Ehrhardt, a retired Senior audit partner formerly with Deloitte & Touche LLP, New York; Paul Friedman, former COO, Fixed Income Division, Bear Stearns & Co., Teresa Glasser, a Principal with Financial Risk Group, Inc, A. Winn Oughtred, retired Counsel, Oppenheimer Group; R. Lawrence Roth, Managing Partner of RLR. Strategic Partners LLC; Robert S. Lowenthal, Managing Director of the Company’s Taxable Fixed Income business and Albert G. Lowenthal, Chairman of the Board and CEO of the Company.
ii. The Management Committee is the leadership team of Oppenheimer. They are responsible for setting and executing organizational strategy as well as implementing and enforcing firm-wide policies. The Management Committee includes Peter Albano, Senior Managng Director, Global Head of Fixed Income; Jeff Alfano, Executive Vice President, Chief Financial Officer; Ed Harrington, Executive Vice President, Private Client Division; John Hellier, Senior Managing Director, Equities; Joan Khoury, Managing Director, Chief Marketing Officer; Max Lami, CEO & Head of Investment Banking, EMEA; Robert Lowenthal; Senior Managing Director, Head of U.S. Investment Banking & Chair, Management Committee; Bryan McKigney, President, Oppenheimer Asset Management; Dennis McNamara, Executive Vice President, General Counsel; Leon Molokie, Executive Vice President, Chief Operations Officer, and Douglas Siegel, Managing Director, Chief Compliance Officer.
Looking Forward
Oppenheimer is keen on digital transformation and is investing in technology relevant to OFOS. In Sept 2020, Harrington announced the launch of a strategic alliance with global fintech firm InvestCloud for the creation of a new digital advisor-client web-based portal for Oppenheimer’s PCD, to be integrated with Oppenheimer’s existing technology infrastructure.
The partnership is expected to significantly enhance Oppenheimer’s ability to deliver the following technology-enabled solutions to its financial advisors and other professionals:
• Recruit and prospect transitioning
• Client onboarding and retention
• Business growth and process efficiency
Speaking to this, Albert G. Lowenthal, CEO and Chairman at Oppenheimer, said, “We continue to deploy capital in a disciplined manner as we make great progress on our digital transformation roadmap across our business segments. Our partnership with InvestCloud will provide intuitive, automated, and modern interfaces that improve the wealth management experience for both our advisors and their clients. This investment will optimize and enhance prior investments as we work to anticipate the preferences our clients have for both in-person and digital delivery.”
About the column: Preserving wealth across generations remains a key concern for High Networth Individuals (HNWIs). This column explores factors that shape the successful transfer and preservation of wealth through the generations.
