Part of the family - Interview with AVC in Working With Family Offices course authors

Sunday, 01 September 2013
As STEP launches its new Advanced Certificate in Working With Family Offices, Hannah Downie catches up with the authors of the course, Anthony Brewis and Michael Oliver, to discuss the rationale for the course and why it should be of interest to STEP members.

Why should STEP members be excited by this course?

Anthony: The family office sector has grown significantly over the last 20 years and has attracted considerable attention from a wide range of service providers in the financial services industry. It has often been thought of chiefly as an investment office, but in fact family offices require regular support from a whole range of professionals, including accountants, wealth planners and lawyers. Gaining access to and understanding the inner workings of a family office is a challenge. In my own experience many firms have struggled to gain access to family offices as potential clients. This is partly down to the inherent discretion of the sector, and partly due to insufficient understanding of the role and workings of a family office. So this course will help STEP members, whatever their profession of origin.

Michael, could you tell us what the course involves and the key aim?

Michael: In terms of the essential components, the course combines pre-reading, attendance at a day-and-a-half workshop and an assessment. The workshop will combine lectures, exercises, role-playing and case studies taken from real-life situations. The goal is to provide an interactive learning experience with an emphasis on practical solutions for your day-to-day job dealing with family offices. The perspective of the course is cross-cultural, in recognition of the increasing globalisation of the family office community.

If I were to describe the aim overall, then I would say that this course is designed to give STEP members a comprehensive insight into all of the critical facets which the family office executive deals with on a daily basis. With their emphasis on discretion and inaccessibility, family offices are often reluctant to disclose more than the bare essentials to outsiders. As a result, service providers develop a very piecemeal understanding of the workings within a family office.

How does the market differ between the US, Europe and Asia?

Anthony: The family office sector has been established longest in the US. What differentiates this market is extensive academic research on the domestic industry and a greater transparency within the sector, facilitated in part by a single, unified tax system. By contrast, the market in Europe is often characterised by extreme privacy and complex cross-jurisdictional structures. Less academic research has been done on it and it has only reached its industry significance over the last ten or so years. Asia is the largest source of new wealth but is the least developed of the three regions, although it shares some of the same complexities of the European family office market in terms of accessibility and cross-border wealth-planning solutions, with the added complexity of developing economy issues.

What does it take to establish a family office unit in a service-provider organisation?

Anthony: Family offices require products and services such as company administration, trust administration, tax planning, reporting and aggregation of investment accounts, all of which need a thorough understanding of the wider family office universe (e.g. of the strategy and asset allocation of the family office). Developing a relationship with a family office requires long-term commitment and appropriate resources. Essentially, there is no quick shortcut to gaining the favour of professionals and family members within a family office.

This course is key to helping formulate a family office strategy for service providers who wish to set up a dedicated family office unit. As a rule of thumb, any commitment of less than 18 months or two years is unlikely to see any measurable ROI or the establishment of long-term relationships.

How has the professional infrastructure changed?

Michael: Many professionals who have long worked for large institutions in the financial services industry have built second careers within the family office sector. In structure, professionalism and from the size of assets under management, family offices are increasingly seen by service providers as institutional investors, requiring sophisticated services and solutions, rather than mere ‘products’. On the one hand, this poses a heightened challenge for STEP members to have the right long-term, coherent strategy to serve this market. On the other, the professionally run family offices are more likely to be receptive to the service offerings of STEP-affiliated firms.

How have the needs of family offices evolved in the past 20 years?

Anthony: Though family offices have long existed in the US, the emergence of the current model of the family or private office in Europe and Asia is more recent. Twenty years ago, the prevailing structure in Europe was that of the estate office, consisting of a legal advisor, accountant and specialist in land management. In the modern family office, the need for legal and accounting expertise remains, whether internal or outsourced. However, the primary focus is now on managing financial investments and structuring wealth for future generations. As a result, the modern family office requires the services of professional investment managers, IT experts and those familiar with cross-border tax issues. Hence this is ripe territory for STEP members and requires the sort of skillset that many TEPs can offer.

The course will be run initially in London in November 2013, and we aim to run courses in Singapore and Hong Kong in 2014. For course information and booking details, please visit the CLTI website. For queries, please contact pd@step.org
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Anthony Brewis and Michael Oliver

Anthony Brewis and Michael Oliver are author of the STEP Advanced Certificate in Working with Family Offices.

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