Why are Family Offices on the rise?19 Jul 2018
Following July's International Association of Young Lawyers (AIJA) Family Office seminar, Ocorian's Family Office expert and opening session moderator Richard Joynt, explores why Family Offices are experiencing a surge in popularity as part one of a trio of articles examining the evolution of Family Offices.
Over the last 15 years the nature and role of Family Offices has really evolved. We are now witnessing the Family Office becoming a common way for families to organise their financial and administrative affairs. In the opening session of the AIJA seminar organised by law firm Bedell Cristin and chaired by Bedell Cristin partner Ed Drummond, I was joined by my Ocorian colleague Amy Collins, Grant Thornton's Charlotte Senior and Niklaud Glatthard of Bratschi Advocates to discuss the rise of Family Offices in front of an international audience of young lawyers.
The rise of the Family Office professional
Traditionally, the majority of wealthy client families delegated the management of their financial assets to investment managers. However, as target returns from such managers have fallen (especially in light of the prolonged low income environment experienced in the last decade) this appears to be a less appealing option and clients are left wondering if they can do better themselves, with Family Office Executives managing the financial assets and reporting directly to family members. This also coincides with clients becoming more concerned about the security of information. Clients are showing an increasing interest in maintaining all data in one place and having absolute control; this can be attractive and give them a greater peace of mind.
There are other factors at work however. In order for clients to source good Family Office Executives, the availability and willingness of professionals to move from traditional careers in financial services needs to be present. As private client wealth services is quite a mature sector in Europe, such high quality professionals do exist, and there is a growing pool of such individuals who are seeking a non-traditional career path. Family Office can provide them with employment working directly for a client family, making them accountable for just one relationship. However, career progression and development routes are not so obvious once in a Family Office environment, meaning that due care and attention needs to be given to motivate and reward such individuals. Alternatively, if clients want to avoid the hassle of employing a dedicated individual, they can use a specialist Family Office provider such as Ocorian.
All Family Offices are unique, yet the operational aspect of them is becoming ever more distinct. Set up to meet the demands of a specific client family, wealth professionals' traditional ways of operating are being challenged by client demands for increased visibility and control of their affairs. As a result, we need to foster open and honest communication channels to deliver the bespoke services they request. Intricately tailored services well served by advisors and service providers alike put you in the very best position to retain a client for years to come.
Ocorian has a highly experienced team of Family Office professionals who can assist with the outsourcing of any aspect of Family Office operations; from minor aspects such as employment of staff, all the way through to managing and operating the Family Office for all the client's affairs.
You can find more about Ocorian's Family Office services here.