Top 6 Valentine’s Day Facts for 2025:
h/t: https://wallethub.com/blog/valentines-day-facts/10258
Will one firm provide your tax, legal and wealth management advice? Is that a good idea?
The wealth management space (and its private equity backers) are closely watching KMPG’s ABS application in Arizona that, in addition to its accounting services, would allow them to provide legal (and, potentially, wealth management services) in Arizona. In the effort to create scale in the advice industry, the “one-stop shop” has been a dream of advice disruptors for years, They exist in other parts of the world and if initially successful, other states will probably follow suit (Utah and D.C have programs for outside law firm ownership).
However, these arrangements come with obstacles to overcome and many risks.
For example,
Some clients will gravitate to the simpler “one fee” approach (and rightfully so).
There will be efficiencies- perhaps even some long-needed outside capital injection and different management ideas.
However, from my perch, I’m not sure that a private equity “operating system” leads to better long-term advice.
The different margins of the advice business, the blurring of duties owed to the client and, the blending of fees creates a set of conflicts that will neuter the quality of advice on more complex, individualized situations. The accounting industry discovered this when it figured out you shouldn’t have audit and tax advice under the same roof.
Additionally, an unintended outcome of this arrangement will be the gradual reduction in standards around accounting and legal certifications.
Injecting scale into hourly business models requires tech enabled advice delivered by the least expensive method.
Ultimately, in order to fill positions with cheaper talent, these multidisciplinary firms will water down the Bar Exam and work experience requirements for CPAs in ABS states.
As a result, as the business pushes for a larger volume of business serviced by standard templates, the specialized advice will be watered down too.
Long term, I don’t think that’s a recipe for quality in situations requiring individualized attention, judgement, and ongoing administration.
(h/t: Matthew Erksine and Tom Burroughes)
In this case (populated with a lot of bad facts), beneficiaries can’t unilaterally change the situs of a trust.
The Pennsylvania court determined that without trustee consent or court approval, the ability of the beneficiaries to unilaterally change the situs of the trust would allow them to undermine both the grantors’ intent and the authority of the courts. (h/t George Pappas)
This is why the art market scares me:
“Crypto investor and $6M duct-taped banana "Comedian" (2019) buyer Justin Sun sued David Geffen to recover a $78M Giacometti sculpture, "Le Nez" (1947, cast 1965). In the lawsuit Sun claims the piece was sold to Geffen without his permission last January in a fraudulent transaction orchestrated by his former art advisor. The suit seeks replevin of the piece. Geffen's attorney have called Sun's claims a case of "seller's remorse." More fun and games in this nebulous asset class.” (h/t Adam Russ)