Speaking at a recent event ‘The Role of the Family Office in the Evolution of Families’, part of the ‘Embracing change’ series hosted by Family Health Office Qineticare, Mark McMullen outlined seven key themes that have emerged from conversations with wealthy families in the past 12 months.

On philanthropy. Many clients brought up the topic of their social capital and how they could help their local and global communities and charities. We are working with a number of clients to assist in the formation of charitable trusts as well as helping them communicate their positive impact.

On reputation. This is something that takes years to build but minutes to ruin. Wealthy families, and in particular their reaction to the pandemic, have been under increased scrutiny over the past 12 months. We encourage clients to put in place protocols around things such as social media to avoid some of the common pitfalls we have witnessed in the press.

On Investing. There was a lot of concern in March 2020 but it was good to see families not panicking and riding out the storm. What we did see was more discussion and interest around certain types of asset class such as private equity, venture capital and accessing tech.

On citizenship. Covid-19 prompted clients to consider whether they felt safe where they lived. Many families are spread out globally and were looking at jurisdictions where they felt safe, where the whole family can gather at short notice if needed. This included buying assets as well as the administration around citizenship and passports.

On data. People are concerned about protecting their personal data. These days everyone accesses apps and websites without considering properly what information is being recorded. We have been working with families to implement ‘Transparency Impact Assessment’s’ to audit what data is held by who, why and where. We may not be able to fix everything but we can come up with a plan – identifying threats and mitigation strategies.

On tax. The federal reserves of most economies have a hot printing press and someone’s going to have to pay for that action ultimately. There will be changes and it is likely the wealthy will be the target. It’s our duty as practitioners to stay current on the requirements of the regulators, tax authorities and governments in the different jurisdictions where our clients live and operate and provide the right advice. Clients are re-considering where they want to settle for the long-term, structuring and succession planning.

On leadership. Families have had more time on their hands to consider the bigger picture. Conversations around their mortality, capacity and health have led to deeper discussions around succession planning, purpose and leadership. We have been pleased to see more of these types of discussions taking place. In our experience, the biggest threats to the longevity of a family’s wealth are not financial. Family disputes, poor communication, a lack of leadership and failing to engage the next generation are the greatest wealth desecrators.

Photo by Waldemar Brandt on Unsplash