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Kurzman Karelsen & Frank, LLP: Thinking Ahead of New PWM Industry Regulations

Press Release – Interview with: Lee Unterman, Managing Partner, Kurzman Karelsen & Frank, LLP

Family offices might need to change their structure altogether as all of the new regulations for the private wealth management industry come into force, says Lee Unterman, Managing Partner at Kurzman Karelsen & Frank, LLP. A service provider company at the marcus evans Private Wealth Management Summit Fall 2010 in Las Vegas, Nevada, December 1-3, Unterman shares strategies for how family offices can prepare for the changes ahead.

What do you see as the main challenges for family offices in the near future?

Lee Unterman: Family offices face the business challenges of an uncertain economy and trying to deliver steady and stable returns. They also face challenges as increased regulation and increased operating costs drive them towards consolidation or a change in their corporate structure. Some single family offices either have or will become multi-family offices or will change their structure altogether when the latest regulatory changes come into effect.

Over the next 12 months, family offices will also face a number of legal questions due to the changing state of family office regulation and the Dodd-Frank financial reform bill including compliance, due diligence, the possibility of having to register, and the increased liability risks, all of which will add costs.

How can family offices prepare for the Dodd-Frank Wall Street Reform Act?

Lee Unterman: There is no best way to prepare for this as the US Securities and Exchange Commission (SEC) has not yet finally defined the family office exemption, although a proposed rule has just been published for comment.

Nonetheless, it would be prudent to consider a number of different competing factors. Most family offices want to keep their finances, intra-family and generational issues private. They need to consider the prospective ramifications of registering or changing their corporate structure. How will it impact their privacy and what are the costs involved? Should they use or form venture capital funds to take advantage of the venture capital fund advisor exemption? Would they fit into the private fund advisor exemption? Should they try to form a private trust company, subject to various state banking regulations and examinations?

Until the SEC clarifies the definition of the family office exemption, they need to consider the different options and discuss the pitfalls of registering and the structures that can be used to avoid registration, if that is what the family wants. If they have no concern about registering, I might also advise them to consider switching to a multi-family office model to spread their administrative and operating costs while keeping their eye out for due diligence issues even if they have third-party investment advisors managing their money.

What long-term strategies would you recommend?

Lee Unterman: Family office managers and directors should be guided by such words as due diligence and transparency. If they anticipate a requirement to register in the future, they should conduct their business in a transparent way now. Complying with laws is not hard. It is about understanding the rules and working with experts to accomplish business goals within the confines of those rules.

Author: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

For more information: Christina Sears, Marketing Manager mediapartners@marcusevansmi.com

305.358.6138 ext. 233

About the Private Wealth Management Summit Fall 2010

This unique forum will take place at the Red Rock Casino Resort & Spa, Las Vegas, Nevada, December 1-3, 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on the new dynamics in federal tax policy, innovative asset allocation strategies, cutting edge techniques to evaluate and manage risks, and tips for educating the next generation in wealth management.

Please note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings.

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About Kurzman Karelsen & Frank, LLP

KURZMAN KARELSEN & FRANK is a full service law firm which traces its roots back to the Civil War. The Firm engages in a variety of corporate, securities, litigation and real estate matters, including: mergers and acquisitions; private placements; regulatory filings; corporate governance and compliance issues, with a special emphasis on the financial industry and compliance with SEC and FINRA rules.

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