In part one of this report we discussed the current state of trust in financial institutions and the related client response. At the conclusion of that report we committed to follow-up with insight into the private world of family offices and expand on reasons why wealthy families are forsaking the unfulfilling relationships they have with their existing advisors. This report is intended to serve as an intro- duction to the private world of family offices, and while not an exhaustive study, it will provide the reader with a better understanding of what a family office is and why families are drawn this form of family wealth management model.

1. A primer on private family ofFices
The silent paradigm shift in
Family Wealth Stewardship
Part II

2. Welcome to PANGEA Private Family OfficesTM
.
Our purpose is to help global families flourish
for generations.
Pronounced pan-jee-aah, the word pangea is a neologism created from two ancient Greek
words, pan meaning all, entire or whole and gaea meaning earth or land. The words taken
together mean whole earth, all lands or entire earth. We chose the name because we believe
it epitomizes our thinking.
We recognize that while political boundaries create international separation, technology has
unified the whole earth in a manner that makes the continents appear to fit harmoniously to-
gether as one. We care for multiple family generations, and so we recognize that economic
and geopolitical shifts that occur half-way around the world will have some impact on the lives
of the different family members who may be attending school, attending to business or on hia-
tus abroad. We also recognize that opportunities to help families achieve their wealth strategy
objectives sometimes exist outside their primary country of residence.
We don’t claim to know everything that is happening at all times around
the world, however we are diligent to keep watch and ask questions of
our international network of professional associates. At PANGEA
Private Family Offices we help global families flourish for generations.
For more information please visit www.pangeafamilyoffices.com

3. THOUGHT LEADERSHIP PERSPECTIVES from PANGEA Private Family OfficesTM
The silent paradigm shift in
Family Wealth Stewardship
Part II: A Primer on Private Family Offices
By: Declan Winston Ramsaran | Managing Director
PANGEA Private Family OfficesTM

4. In part one of this report we discussed the current state of trust in
financial institutions and the related client response. At the conclu-
sion of that report we committed to follow-up with insight into the
private world of family offices and expand on reasons why wealthy
families are forsaking the unfulfilling relationships they have with
their existing advisors. This report is intended to serve as an intro-
duction to the private world of family offices, and while not an ex-
haustive study, it will provide the reader with a better understanding
of what a family office is and why families are drawn this form of
family wealth management model.
The name Oprah Winfrey is one that you’re likely familiar with. In
addition to her being a media mogul and international humanitar-
ian, Oprah has also formed her own family office. She’s not the
only one. Many superstar athletes and entertainment A-listers have
also seen the value in the family office model. Away from the stage
and screen, people you see in your neighbourhood like business
owners and professionals who have created significant wealth like-
ly have a form of family office established to oversee the wealth
management needs of their family. If you’ve never heard of the term
family office (or you’re only vaguely familiar with it) you’re not alone.
Meaningful information about the private world of family offices is
relatively difficult to come by – especially if you don’t know what to
look for. Even some seasoned wealth management professionals
and senior leadership finance professionals aren’t familiar with the
term family office.
WILL OPRAH WINFREY REDEFINE THE
FAMILY OFFICE MODEL?
campden FB
Oprah Winfrey Opts for a Family Office
The NewYorkTimes
Oprah Winfrey Hires Money Manager, Setting Up
Family Office To Manage Billions
Huffington Post
Private 4

5. I recently had lunch with someone whose ongoing tenure in the
financial services sector surpasses two decades. To protect her
identity, let’s call her Jody (not her real name). For lunch with Jody,
I ordered the roasted lamb shank – a rich treat that I indulge in on
rare occasion. Sharing time with Jody was the rare occasion I need-
ed as an excuse.
The CV of this highly talented professional is impressive. Super-
latively accredited, Jody once held a senior role in the Canadian
business tax advisory practice with one of the big four accounting
firms, then later held a senior leadership role at a prominent Cana-
dian full-service brokerage firm and then moved to the bank side of
the business to head research that was regularly published in the
Canadian media. Jody is well informed about the Canadian wealth
management sector and is also widely acknowledged as an indus-
try expert - she is also published.
Over lunch, as our conversation unfolded I engaged Jody in con-
versation about changes taking place in the family office space to
learn from her perspective. After a short while speaking, I paused to
acknowledge and inquire about her uncharacteristically blank stare.
When I asked Jody if she knew what a family office was she replied
in the affirmative saying, “Yes, I know what a home office is.” I de-
tected the misapplied terminology home office but listened further
to learn if she misspoke. She continued unaware of the terminology
slip, “I’ve worked with home offices before. Some families run their
business out of a home office.” As she persisted, I quickly realized
that Jody did not know the term family office and was doing what
most professionals do when asked about a subject they know little
or nothing about: save face by switching gears and talking about a
topic that they do know something about.
I quickly realized that Jody did not know the term family
office and was doing what most professionals do when asked
about a subject they know little or nothing about: save face by
switching gears and talking about a topic that they do know
something about.”
“
Private 5
Current state assessment

6. “ Mid-way through lunch, I had the opportunity to tactfully explain
the concept of a family office to Jody, taking care to respect her
industry tenure. This explanation, opened up a wonderfully rich
conversation about Jody’s past experience at the accounting firm
where she was part of a special advisory team assembled to ad-
vise UHNW Canadian families on complex tax matters. Jody went
on to openly share her thoughts on the topic of conversation while
reflecting on her past experience at the accounting firm. She said,
“Oh yes, we did something like that back at [name of big 4
accounting firm omitted from article]. But it wasn’t profitable for
the firm and there were other issues too. We spent a lot of time
structuring and recommending tax strategies to clients but our
advisory team fell apart.
What happened was that one of the firm’s partners, who was on
the advisory team, found that he could make a lot more money on
his own by selling the insurance solutions that were part of our tax
recommendations. The way he figured it, all he’d have to do was
close three or four of these big insurance deals a year and he’d be
earning seven digits. We weren’t making anywhere near that back
at the firm. I don’t blame him for leaving to do that. After he left,
others on our team followed.”
While listening intently to Jody’s recount of the situation, I won-
dered what had happened to the families after the advisory team
fell apart so I asked. “Oh, they were fine, they were happy” she said
vaguely while ensuring to protect the reputation of the firm. “We
did what we said we were going to do for the clients.” I recognized
the quasi-elusive nature of her answer. Not wanting to prolong this
part of the conversation, I didn’t press for a deeper response. As we
concluded our lunch together we made plans to reconnect. While
walking away from the restaurant I realized how little was known
about the family office space – even at some of the highest levels
of leadership in the Canadian wealth management sector.
Oh yes, we did something like that back at [name of big 4
accounting firm omitted]. But it wasn’t profitable for the firm
and there were other issues too. We spent a lot of
time structuring and recommending tax strategies to
clients but our advisory team fell apart...
Private 6

7. While Jody’s story was insightful, comprehensive tax planning and the relat-
ed risk management strategies are only one of many considerations within a
family office. Jody’s story behooves me to define what a family office is and so
here it is, the description of a family office, the way we see it:
Created to serve the 360 degree wealthcare needs
of a family as it’s sole purpose, a family office is a
private, family led organization that orchestrates
comprehensive, full balance sheet & income state-
ment quantitative management in conjunction with
appropriate qualitative services that address human
complexities through family governance & lifestyle
management while considering an extended time
horizon that naturally includes multiple family
generations.
In the above definition, we have deliberately underlined critical elements of
what we believe to be essential to a genuine family office. Those key ele-
ments are expanded upon below. Families of significant wealth who, after
reading this report and doing more research, still knowingly choose to partner
with a large institution that claims to offer family office services rather than
establishing or partnering with a genuine family office are settling for a fake.
Private 7
Our word of caution is this; making this choice would be akin to
knowingly buying, wearing and bequeathing a counterfeit Patek -
the next generation will certainly pay the price.

8. Prior to discussing the underlined, critical elements in the definition of a genuine private family office, consider the perspective of very wealthy families expressed
in this excerpt from an article in the Financial Times:
“The super rich are victims like anyone else,” says Michael Shelton-Agar, chief executive of Global Partnership, a London-based
membership organization for family offices. “Very wealthy families also feel betrayed by the banks – they have also lived through the sales
culture in financial services.” Wealth advisers say these clients have lost patience after paying large commissions and fees to banks and
investment managers on products that have largely failed to deliver. Many are setting up family trusts to manage their financial affairs
independently.
“They have become incredibly frustrated with financial institutions and money managers who have delivered largely mediocre returns and
adopted a product-led approach,” says Jon Needham, global head of fiduciary services at SGPB Hambro, the wealth management arm of
Societe Generale. “They have now increasingly taken ownership of the management of their money, working with key strategic partners and,
where the need and opportunity arises, working closely with their own in-house talent.”
- Financial Times
Private 8

9. The description of a private family office, the way we see it:
Created to serve the 360 degree wealthcare needs of a family as it’s sole purpose, a family office is a private, family led organization that or-
chestrates comprehensive, full balance sheet & income statement quantitative management in conjunction with appropriate qualitative services
that address human complexities through family governance & lifestyle management while considering an extended time horizon that naturally
includes multiple family generations.
1.
6criticalelementsofagenuine,privatefamilyoffice
A true family office aims to direct the potential of family capital (financial, intellectual,
community) to serve the family’s vision. Employees in the family office consciously ar-
range all quantitative & qualitative affairs for the sole benefit the family and their com-
munity. A genuine family office does not view family capital as a source of revenue for
corporate profit via fees charged. An inherent conflict of interest smolders between pri-
vate family objectives and large corporate profit motives. A genuine, private family office
extinguishes this conflict of interest.
Family as it’s sole purpose:
Private 9

10. A genuine family office is owned by a private family – akin to the family owning a private family busi-
ness. Furthermore, true family offices are not owned by large financial institutions like accounting
firms, or publicly traded banks, or wealth management firms. Large, corporate interests that are legally
separate from the family who have temporarily pasted the term family office onto their moniker are
doing so as a marketing ploy. Designed to serve the mass market, large corporations with sustainable
business models are guided by the principles of systemization and standardization to increase profit-
ability and create an enterprise wide “consistent client experience.” This mass market institutional fo-
cus and business objective are polar opposite to the required competencies and established intent of
private, family offices.
Simply put, the aim for large corporations is to have customers receive the same service experience
wherever they may be located – think McDonalds. Now contrast this mass market McDonalds expe-
rience with the ne plus ultra fine dining experience at the privately owned, Noma (consistently voted
world’s best restaurant located in Copenhagen, Denmark). A true, private family office delivers what a
large corporation cannot; a ne plus ultra, bespoke family wealth experience. In addition to this unique
tailoring, being private means that confidentiality remains within the control of the family.
6criticalelementsofagenuine,privatefamilyoffice
2. Private:
PRIVATE 10

11. 6criticalelementsofagenuine,privatefamilyoffice
3. In conjunction with the aforementioned, a true family office will be under the
leadership of members of the family. In some cases, a co-leadership arrangement
is agreed upon. This co-leadership arrangement generally takes the form of a
partnership with the in-house CIO, CFO or Wealth Executive. Being family led
makes all the difference in long-term performance – and by performance we don’t
mean only investment rates of return. Families with a clearly defined purpose are
equipped to be at the helm of their wealth strategy for strong leadership and
proactive decision making rather than being subject to reactive decision making
based on random suggestions from multiple advisors - the result being that the
strategy ends up looking like a Picasso.
Family led:
Private 11

12. To illustrate how centralized decision making easily slips out of the hands of the family when working with multiple advisors,
we’ll share an experience from a family office conference that we attended at the NYC Harvard Club. One of the speakers was the
CIO from a prominent, bank-owned “family office” operation. In his eloquent talk, he dedicated the full hour to exclaim the merits
of investing in REITS. His position was supported by graphs and charts and tables all framing REITS as “THE” solution for UHNW
clients who wish to invest in real estate. In our minds however, we were thinking that the families we work with prefer direct owner-
ship of real estate (be it multi-unit residential, hotel or commercial) because of the control it affords them. Not only do they prefer
the control, they also have the resources to self-fund or co-partner with other like-minded families on these types of deals.
As this thought was going through our minds, a family office principal who was at our table sitting to our right piped up during
a pause in the presentation saying, “Why would families do this?” referring to REITS as he gestured to the screen where the pre-
sentation was being projected. “We can buy these properties directly and hold the hard asset.” Heads around the room nodded
in agreement with the statement, and then all eyes turned to the CIO looking to him for a response. In a tone not as confident as
before, the CIO at the front of the room conceded that families of significant wealth, like the ones present in the room, could indeed
directly acquire real estate assets and build their own diversified portfolio. To save face however, he shifted gears and went on to
say that REITS may also serve as a complement to those hard real estate assets that families already own. For example adding
exposure to a market segment not represented in the hard asset portfolio. This was a reasonable suggestion. As we listened to the
presentation we understood how a client or family looking on at this presentation in a private room with catered lunch on fine china
would be convinced that REITS were the solution for them – especially if they weren’t aware of the alternatives.
our EXPERIENCELEARNINGfrom
Private 12

13. “It’s partly the realization of the conflict between private wealth
and the financial services industry, and it’s partly because now
there’s a lot more opportunity out there for private wealth
relative to that available for the financial services industry
compared with pre-crisis.”
- Peter Douglas, Principal at GFIA Pte,
advises investors seeking to allocate money to hedge funds.
An insider’s perspective.
Private 13

14. 6criticalelementsofagenuine,privatefamilyoffice
4. Decision making with incomplete or inappropriate information usually leads to ongoing
performance disappointment. Such was the case of families who once managed their
wealth in a fragmented, piece-meal fashion with multiple siloed advisors, each advisor
protecting their own competing agenda.
This siloed approach meant that each advisor, while having the intention to act in their
client’s best interest, was advising on only his/her piece of the puzzle, the result of
which is an overly biased view in their recommendation. For example, the accountant in
the relationship will claim that tax is the most important part of the puzzle and provide
advice that is solely tax driven. What’s the problem with that you might ask? Consider
the client challenges expressed in the following excerpt from a New York Times article
entitled, When the Tax Tail Wags the Investment Dog:
Comprehensive, full balance sheet & income statement quantitative management:
Private 14

15. I had a recent conversation with some friends about a rental home they owned. They
were evaluating their options for the property. Should they keep it? Remodel it? Sell it
and look for an alternative investment?
As we walked through the details, it became clear to all of us that they have a great lit-
tle investment in the context of their overall financial plan. Based on the price they paid
years ago, the money they put into the house, the rental history and the income they
collect, it appeared to be a much better investment than the alternatives they were con-
sidering, even when we accounted for the risk associated with rental properties. But as
soon as we came to that conclusion, they asked me this: “Why did our accountant tell
us the opposite?”
Now, their accountant prefaced his advice with the disclosure that his job was to focus
on taxes. Based on that perspective, his advice was to sell it because they currently
qualified for a substantial tax savings on the capital gain that would not be available to
them in the near future. To be clear, the accountant didn’t give my friends bad advice.
Instead he gave them advice based on one perspective, taxes. The reality is that smart,
long-term financial decisions need to take more than one thing into consideration. But
because taxes are associated with so much emotion (given how much people truly hate
paying them), it’s incredibly easy to let taxes become our sole focus. And that can lead
to bad decisions.
“Why did our
accountant
tell us the
opposite?”
- New York Times
WhentheTaxTailWagstheInvestmentDog
This is an example of advisor risk that families face when managing wealth in a fragmented, piece-meal fashion with multiple siloed advisors, each advisor protecting their own competing agenda.

16. The preceding example discusses a tax scenario however similar situations
regularly occur in legal advisory on trust & estate planning matters and
investment recommendations, among other types of advice. Most forms of
advisory where the professional is making decisions in a silo, will generally
result in poor strategic advice (even though the advice may be technically
sound and the professional is acting in the best interest of the client).
Comprehensive full-balance sheet & income statement management
orchestrates asset, liabilities and cash flow to work in unison to achieve the
family’s defined objectives. A clear, big-picture dashboard showing both
balance sheet and income statement information is vital to effective strate-
gic decision making. By looking at all aspects of both the balance sheet and
income statement, better decisions can be made that yield better long term
performance. To emphasize the point, we quote a phrase that some may be
familiar with: all things working together for good. A genuine family office
delivers comprehensive full-balance sheet & income statement manage-
ment.
- PANGEA Private Family Offices
TM
nota bene
Private 16

17. 6criticalelementsofagenuine,privatefamilyoffice
5. Tax avoidance, portfolio construction, variance drain, internal rate of return, price per key. These
activities primarily focus on the numbers. And while quantitative analytics are important, they only
consider half of the family picture. Some professionals argue that the other half of the picture – the
qualitative elements – matter more to long term family success than the numbers driven structures
that are put in place. Qualitative elements will include family communication skills development, family
governance, working with a wealth psychologist, making use of concierge services to create time and
retaining the services of a health coach to increase energy and longevity. While not an exhaustive list,
the aforementioned qualitative services are vital to helping the family thrive. Our position is that both
the quantitative and qualitative elements are equally important and demand appropriate attention.
Qualitative services:
Private 17

18. To appreciate the importance of effectively orchestrating the qualitative family office elements, James E. Hughes Jr. says the following about family
governance:
“To successfully preserve its wealth, a family must agree to create a system of representative
governance through which it actively practices its values. Each successive generation must reaffirm
its participation in that system of governance. Because a family is, by definition, two or more
individuals, any decision made by a family must involve joint decision making. Joint decision making
expresses a system of governance. Recognizing that joint decision making is a form of governance is
one of the fundamental first steps in wealth preservation.”
Thought leadership perspective
- James E. Hughes Jr.
Private 18

19. Our position:
Effective family governance is a substantial responsibility, that we believe trumps asset
allocation in priority. If the family is falling apart, no portfolio on the efficient frontier will
resolve the family conflict. No risk-adjusted or absolute return rate will increase the
success rate of a family values transfer to the next generation. Without a strong family at
the core, the wealth that surrounds them may, in some cases, be a curse rather than a
blessing. A true private family office possesses the awareness, competency and time to
manage these qualitative factors for the benefit of the family.
- PANGEA Private Family OfficesTM
Private 19

20. 6criticalelementsofagenuine,privatefamilyoffice
6. Includes multiple family generations:
While this point may appear simple enough on first blush, to graphically illustrate the com-
plexity involved, consider the following:
Private 20
Fig.1

21. Commentary:As you may appreciate from looking at the graphic in Fig. 1, overseeing the complexities of the business,
family and ownership is a magnanimous task that requires unique professional competencies and aligned
interests from advisors working with the family. Considering the multiple dimensions that a family office
oversees you may also recognize the value in defining a family office in the manner that we did. A true family
office manages tremendous complexity to create clarity for the family. Managing this high degree of intersect-
ing complexity coupled with the meticulous focus on customization for the family is not the type of service
that large financial institutions are designed to consistently provide. High complexity and customization in
a private family office is contrary to systemization and standardization and so for large financial institutions,
operation of a true family office model is unsustainable for their business. If their “family office” business
models are to exist, the models will have to be a shadow of a genuine family office with compromises being
made in the level and type of services offered. If this is the case, then their service is no longer a family office
but rather a quasi modo offering masquerading for public attention.
- PANGEA Private Family OfficesTM
Private 21

22. Commentary:Welcome to Big Bank “Family Office.” Caveat Emptor.
An ongoing claim from large institutions about their version of a “family office” offering is that they offer
the same services as a private family office. While some have interpreted this claim as typical PR rhetoric
and therefore disingeneoius, we invite readers to consider the following analogy:
While in conversation with some new friends at a neighbourhood dinner party you
find yourself talking with Wayne. When you ask how he passes his time he says, “I play hockey
for a living.” Since you’re not a hockey fanatic, you don’t recognize him as “The Great One.”
After finding your conversation with Wayne pleasant enough, you top up your glass of wine
and next find yourself talking with Josh. Josh tells you that he plays hockey too and you think
to yourself, “Wow, another hockey player.” Josh goes on to tell to you that he wears the same
number on his jersey as Wayne does, and wears the same size skates and uses the same hockey
stick blade pattern that Wayne does. At this point in the conversation you think, Wayne and
Josh sure do have a lot in common. After some more mingling and one more glass of wine you
decide to leave the party at the same time as your next-door neighbour. As you walk along
the quiet street back to your homes your neighbour tells you that their kids’ hockey coach has
moved on and their minor professional hockey team is looking for a new coach. Your imme-
diate reaction is,“You know, I just spoke to two hockey players tonight.” While recounting the
conversations to your neighbour you say, “They both seemed like nice enough guys, maybe
one of them would be available to help.”
Unfortunately for you, what Josh neglected to mention (and what you didn’t know
to ask) was while he and Wayne both play in hockey leagues, Wayne plays in the NHL
and Josh plays part-time in a recreational house league. While it is true that Wayne and
Josh both play hockey and on the surface appear have many similarities – they perform at
significantly different levels and their respective results from coaching the hockey team will
be substantially different. So it is with large financial institutions branding themselves to
look like to family offices on the outside, but on the inside their staff generally remain same,
their process remains the same, their solutions remain the same and their objective remains
the same – sell products and services to clients to profit from the relationship. Blue Ocean
Capital Partners Director, Daniel Lin says, “For private banks, because they have certain
targets, they need to find something that will give them a financial return pretty quick-
ly,”... “For us, we’re not in a hurry to make money out of this; we have time to build on the
intangibles such as family values and governance.” Worth acknowledging is the important
role that we see private banks and other like financial firms playing in collaboration with
private family offices. These large institutions are proven to be innovative and prolific in
product design and distribution. Leveraging their core competencies, wealth management
firms should remain open to designing custom solutions for private family offices while
acknowledging that overseeing strategic family affairs requires competencies they do not
possess. To achieve the family’s objectives, the private family office will continue to fulfill its
role by negotiating appropriate terms, pricing and solutions for the family from the widest
available spectrum of product & service providers.
- PANGEA Private Family Offices
TM
Private 22

23. Thought Leadership:
Private 23
PANGEA Private Family OfficesTM
is part of the PANGEA Global Wealth Group
corporation. PANGEA Global Wealth Group is a Canadian controlled private corporation. Our
clients highly value our independent position because of the candor that it affords in commu-
nication and the allegiance it fortifies to the family’s best interest. We’ve eliminated conflicts of
interest by centralizing decision making authority within the family’s thought leadership council/
Board of Advisors who are loyal to the family. Furthermore, we’ve separated the strategy from the
sale thereby putting the decision making control back into the hands of the family. Confidentiality,
trust and independence are the primary reasons clients choose PANGEA Private Family Offices.
Our clients find us mainly from within our own private circle and therefore share similar family
values, strong community involvement and a yearning for personal growth. PANGEA Private
Family Offices has published many other reports, articles and interviews. Our thought leadership
reports, articles and interviews are regularly sought after by enterprising global families and their
private advisors. Learn more at www.pangeafamilyoffices.com
PANGEA Private Family OfficesTM
Wine as an asset class.
Exploring fine wine as an investment
A report by PANGEA Private Family OfficesTM
April 2014
Should your family consider
an insurance captive?
How families with a globally diverse
portfolio of assets can establish their
own insurance captive.
A report by PANGEA Private Family OfficesTM
March 2014
How cyber-secure is your
family enterprise?
Even wealth service providers are
concerned about cyber-attacks to
access private client information.
A report by PANGEA Private Family OfficesTM
May 2014
The high-tech disconnect.
The wealthy & wealth managers are
out of sync on digital culture.
Current state assessment by
PANGEA Private Family OfficesTM
June 2014
Private real estate &
Private equity.
The case for private equity funds.
A report by PANGEA Private Family OfficesTM
July 2014
Real Estate Investments -
A European perspective.
A look at the structures and opportunities for
investing in real property in Western Europe.
A report by PANGEA Private Family OfficesTM
August 2014
Gold as an investment.
The challenges and opportunities in gold.
An report by PANGEA Private Family OfficesTM
July 2014
Facilitating diffucult conversa-
tions with 2nd generation
business owners.
Learning from a real family situation.
Insight from PANGEA Private Family OfficesTM
December 2013
The silver lining.
Examining the upside potential in silver.
A report by PANGEA Private Family OfficesTM
November 2013