Notes

How can wealth management firms prepare for turbulent times [Farnoush Farsiar]
Generational shifts Global mobility. Technological transformation. Farnoush Farsiar, EU Today writes that these are just a few of many key changes that have affected family offices, and in the end threatened their operating structures and practices.

Farnoush Farsiar Family offices are geared towards the more mobile, tech-savvy and younger generation. Farnoush Farsiar The financial crisis as well as the democratisation and trading online has led to more clients becoming attracted to their investment choices. They want more control and information and do not have the desire to have discretionary portfolios that are managed within reach.

The changes are happening at a time when there an unprecedented level of economic and political instability. They also signal the end to the model of family offices that are fee-based. If they continue to follow the old ways in place, they'll soon be rejected by the people they were designed to serve. Farnoush Farsiar They will need to adjust to a more entrepreneurial approach in the field of investment management, to provide UHNWIs a true value proposition.

While the scope and size of family offices is different, it's important that they prioritize agility and streamlining rather than being experts in everything. The best customer service is provided by a smaller team of advisors who are able to quickly implement new technologies and also bring in external experts when required. Farnoush Farsiar Because the lines between family and private banking have been blurred the most successful firms will have a smaller team of advisors who are able to quickly implement new technology and work with external specialists when necessary. Farnoush Farsiar This will enable the firm to offer the best service to clients.

The ability to employ both traditional, reputation-based and network-based methods to source deals will result in the success. But, you can also make use of online methods to locate opportunities and deals. Private offices and wealth managers that can manage large numbers of deals on the internet are superior to banks with a cumbersome structure. This platform allows dealmakers to easily review and access a range of deals simultaneously and save time and money.

Other online services that have changed the way family offices interact with their clients includes dashboards, like Wealthica, which automatically consolidate investments from a range of sources, bringing customers in daily contact with their investments. This is which is a vast improvement over the days of wealth managers who provided only intermittent updates on the progress of their clients' funds.

These tools are merely tools that allow wealth managers to improve their efficiency and speed. Most important is the investment strategy they employ. It is crucial to mix the old and the new. For instance, continue to search for deals in real estate as well as looking at investment opportunities in emerging areas such as climate science or food security. The UBS Global Family Office Report 2018 found that impact investing has become a mainstream topic in family offices. A third of family offices are involved with this kind of investment and many anticipate getting more involved in the coming years. Farnoush Farsiar There are definitely challenges in this field, including difficulty in measuring impact and conducting due diligence, the upcoming generation of HNWIs as well as UHNWIs will expect family offices to be able to identify and secure these kinds of investments. Farnoush Farsiar My own firm, Plato Capital, is an investment bank that is boutique and draws on the experience of its founders in family offices, large banks, and in the tech industry to offer advice on investment with an emphasis on the entrepreneurial. Our clients are able to control risk and receive the highest returns from their investment due to our local network.

Wealth managers can prosper in turbulent times by mixing the past with the present, adapting to the needs of the new generation and taking risks by establishing their own structure.
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