How can wealth management firms be prepared for turbulent times? [Farnoush Farsiar]

Generational changes. Global mobility. Technological transformation. Farnoush Farsiar Farnoush Farsiar from EU Today discusses the major changes that affect family offices and are fundamentally challenging the operating structures and practices.

Farnoush Farsiar Family offices are increasingly catering to the younger, mobile generation. The financial crisis, along with the increasing accessibility of trading online and its democratisation has led to more clients becoming attracted to their investments. They seek more control and information and do not want the discretionary portfolio management mandates of their clients within reach. The changes are happening in a period of an unprecedented level of economic and political turmoil. They also signal the end of the model of family offices that are fee-based. Offices who try to maintain their current practices will soon be abandoned by the individuals they were created to help. They must change their approach to become more entrepreneurial and develop an attractive offering for UHNWIs.

Although the size and scope of family offices can be different, it’s important to focus on agility and streamlining rather than being experts in all things. Customers will benefit from a smaller number of advisors skilled at implementing rapid changes to technology and also bringing in experts as needed. Since these changes require the blurring of the line between private banking and family office The most successful companies will be those that maintain the loyalty and level of trust that a family office has whilst remaining in the forefront of new technology and deals to source.

Success will result from the capacity to profit from more traditional, network and reputation-based strategies for deal sourcing as well as using online tools to find deals and opportunities. Wealth managers can utilize deal sourcing sites online to discover deals and opportunities. They’re much more convenient than large, cumbersome banks who are stuck in large-firm bureaucracy. These platforms allow dealmakers to review and access a huge amount of deals at a time, which is a significant saving of time and effort.

Another service online that is revolutionizing how family offices interact with clients is Wealthica. The Wealthica dashboard service automatically collects investments from multiple sources and puts clients into regular contact. It’s a vast improvement back to the days where wealth managers provided periodic updates on the progress of their clients’ funds.

These tools do exactly thatthey enable wealth managers to increase their effectiveness and speed. Their investment strategy is what is most important. The most effective strategy is to combine the old and the new. This means you should continue looking for opportunities on real estate however, you should also explore investments in areas like food security or climate science. Impact investing has definitely arrived’ in the family office world – the UBS Global Family Office Report 2018 found that one third of family offices are now active in impact investing, and the majority expect to be more active in the near-future. There are many challenges in this field including the difficulty of measuring impact and doing due diligence. Farnoush Farsiar But, the next generation UHNWIs and HNWIs will be expecting family offices to determine and secure investments in this area. Plato Capital, my own boutique investment bank, draws on the experiences of its founders from large banks and the technology industry to offer investment advice that is entrepreneurial the focus. Our local knowledge and network allows us to help our clients effectively reduce risk while increasing the capital return.

All types of wealth managers can succeed during turbulent times, by mixing old and the new by adjusting and taking risks with their structures and methods.