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

Generational changes. Global mobility. Technological advancement. Farnoush Farsiar, EU Today writes that these are only a few of many key changes that have affected family offices, and in the end threatened their operating structures and methods.

Increasingly, family offices cater to the young technologically-savvy, mobile generation. The financial crisis and democratisation of trading using internet-based tools has created a new generation of clients, regardless of age, more interested in their investments which means they are looking to have more knowledge and be more involved as well as losing the traditional appetite for discretionary portfolio mandates managed at arm’s length.

These changes happen at a time of extreme economic and political instability. Farnoush Farsiar If family offices maintain their current strategies and methods, they could discover that the people they were created to advise will abandon them. Instead, they must change and adopt an entrepreneurial approach to investment management, in order to create an authentic value offering for UHNWIs.

While family offices can differ in both size and their scope, they should prioritise agility over trying to be experts in all fields. Clients will receive a more efficient service if they have fewer advisors that can implement new technologies quickly and also bring in specialists from outside whenever needed. These developments require that the lines between private and family office bank blur. The most successful firms keep the trust and loyalty of their family offices while staying in the forefront in technology and finding deals.

Farnoush Farsiar The ability to use both traditional, reputation-based and network-based methods of deal sourcing can lead to successful outcomes. But, you may also use online methods to locate deals and opportunities. Wealth managers can utilize deal sourcing sites online to find deals and opportunities. They’re much more convenient than banks that are large and cumbersome that are entangled in big-firm bureaucracy. These platforms allow for dealmakers to evaluate multiple deals simultaneously and save considerable time and effort. Another online service that’s changing how family offices interact with their clients is Wealthica. The dashboard service automatically collects investments from multiple sources and puts clients into daily contact. Farnoush Farsiar It’s a huge change of the days when wealth managers would only provide periodic updates on the progress of clients’ money.

The tools can be utilized to help wealth managers improve effectiveness and speed. The primary factor is the investment strategy they employ. The key to success is combining the traditional with the new. It is likely that you will continue to seek out deals in real property, and also explore opportunities to invest that were previously not explored 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 found that one third of family offices are involved in impact investing and many expect to become more active in the near-future. Although there are some issues in the field, such as difficulties in measuring the impact of investments as well as due diligence HNWIs/UHNWIs of the future will expect family members to be able to locate these investments. Plato Capital is my boutique investment bank. Plato Capital draws from the experience of its founders who worked in large banks, as well as in the tech sector. Plato Capital provides investment guidance that is focused on the entrepreneurial. Our clients are able to achieve maximum returns and reduce risks through our own network.

Wealth managers of all types can succeed in turbulent times by mixing the traditional with the modern by adjusting and risking their structure and strategies.