Notes

How wealth management businesses can prepare for turbulent times [Farnoush Farsiar]
Generational changes. Global mobility. Technology advancement. Farnoush Farsiar, EU Today writes that these are just one of the many major changes that have affected family offices, and in the end threatened their operational structures and practices.

Family offices cater to the increasingly mobile, tech-savvy and younger generations. All clients, regardless their age, are becoming more attracted, regardless of their financial situation, in managing their own investment portfolios. This means they want more information and involvement , not just a portfolio manager to manage.

These changes happen at a time of extreme political and economic instability. If they attempt to continue with the old ways, they will be abandoned by the very people they were designed to help. Instead, they need to adjust and adopt a more creative approach to investment management, in order to create the best value offering for UHNWIs.

Family offices are diverse in size and size and. They should be able to focus on scalability and streamlining their offerings rather than trying to be experts in every subject. The best customer service will be provided by a smaller team of advisors that are able to quickly implement new technologies and also bring in external experts as needed. Since the lines between family and private banking have been blurred the most successful firms will have a smaller group of advisors who are able to quickly adopt new technologies and work with external experts when needed. This will enable them to provide a more valuable service to customers.

The ability to use both traditional, reputation-based and network-based methods for deal sourcing can lead to successful outcomes. But, you may also use online methods to locate opportunities and deals. Deal sourcing platforms online are only one tool that wealth managers and agile private offices can readily install in contrast to the large, bankers who are ensnared in bureaucratic red tape. Dealmakers can use these platforms to quickly browse and evaluate a variety of deals, which results in significant savings in time and resources.

Other online services which are changing how family offices interact with their clients include dashboards, like Wealthica, which automatically consolidate investments from a range of sources, bringing customers in daily contact with their investments - which is a vast improvement over the days of wealth managers who gave periodic updates on the state of their customers' money.

They aren't the only method wealth managers can boost the efficiency and speed of their operations. The most crucial element in investing is the method that is used to implement these tools. The key to success is to combine traditional and new. It is likely that you will continue to seek out deals on real estate and will also be looking at opportunities to invest in previously unexplored areas such as food security and climate science. The UBS Global Family Office Report 2018 revealed that impact investing has become a mainstream topic in family offices. One third of these family offices are involved with this kind of investment and many expect to get more involved in the near future. There are a myriad of issues with this area including the difficulties of measuring impact and doing due diligence. However the next generation of UHNWIs and HNWIs will expect family offices can find and secure these investments. Plato Capital, my own boutique investment bank, is based on the expertise of its founders who have worked in large banks as well as the technology industry to provide investment advice that is entrepreneurial in focus. Our clients are able to successfully control risk and receive the most value for their investment due to our network of local experts.

Blending the old with the new, while adjusting to the changing needs of the new generation and being prepared to be risk-averse with their own structures and techniques Wealth managers of all kinds are able to remain relevant and thrive during difficult times.
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