How can wealth management firms prepare to face turbulent times [Farnoush Farsiar]

Generational changes. Global mobility. . Farnoush Farsiar from EU Today writes about these key changes that affect family offices and are fundamentally challenging the operating structures and practices.

Increasingly, family offices are catering to the younger, more tech-savvy and mobile generation. The financial crisis and democratisation of trading via online platforms have made all clients, irrespective of age, more interested in their own investment portfolios which means they are looking to gain more knowledge and be more involved as well as losing the old fashioned desire for discretionary portfolios that are managed by arm’s length.

The changes take place in a period of extreme economic and political instability. Offices who try to maintain their old methods are likely to be relegated by the people they were created to help. Instead, they must change and adopt an creative approach to investment management to develop an authentic value proposition for UHNWIs.

While family offices can differ in terms of size and scope, they should prioritize agility over the desire to be experts in all fields. Customers will get more efficient service if they have less advisors who can implement new technologies quickly and also bring in specialists from outside as needed. These changes have led to the blurring of distinctions between private banks and family offices. Companies that are successful will continue to maintain the trust of family offices and the level of trust they have while also being ahead of the curve in sourcing deals and implementing the latest technologies.

You’ll be successful if are able to leverage traditional networks, reputation- and network-based approaches to dealsourcing while also making use of online tools to identify opportunities and deals. Wealth managers can make use of online deal sourcing platforms to identify opportunities and deals. They’re much more convenient than large, cumbersome banks who are stuck in large-firm bureaucracy. These platforms make it possible for dealmakers to review many deals simultaneously, and thus make it easier to save time and energy.

Another service online that is changing the way family offices interact with clients is Wealthica. This dashboard service automatically consolidates investment from a variety of sources and brings clients in daily contact. It’s a vast improvement back to the days when wealth managers only provided periodic updates on the progress of the clients’ investments.

These tools aren’t the only way wealth managers can increase the efficiency and speed of their operations. Their investments strategy is what matters the most. The key to success is to combine traditional and new. It is likely that you will continue to seek out deals in real property, and also explore investments in previously unexplored areas such as food security and climate science. Impact investing is definitely ‘at last’ in the family office world – according to the UBS Global Family Office Report 2018 showed that one-third of family offices are now involved in impact investing and most expect to become more involved in the near future. There are a few issues with the field such as difficulty measuring impact and due diligence, the HNWIs and UHNWIs of the future will want family members to have the ability to identify the right investments. My own firm, Plato Capital, is a small investment bank that utilizes the knowledge of its founders in family offices, banks and the tech industry to provide investment advice with particular attention to the entrepreneurial. Our local expertise and connections allow us to assist our clients successfully control risk while maximising the capital return.

Wealth managers of all kinds can succeed in turbulent times by mixing traditional with the modern by adjusting and making a risk with their structures and techniques.