Family comes first
Ultra high-net-wealth clients are worried about the long-term future of the family, according to research by the US-based Family Office Exchange (FOX).
It ranked equal with maintaining family relationships as the two most worrying concerns of FOX’s client base.
“What families are focusing on is family continuity and governance,” FOX president John Benevides told a Dealers’ Group conference in Melbourne.
“They are not too concerned about wealth management.”
In the survey, investment performance was ranked as eighth in the list of issues worrying families.
“The next generation and the leadership they will provide to the family is more important than investment returns,” he said.
“It is changing the fundamental approach of advisers to this type of business model, which has focused on investments.
“It is changing to a more client-led advisory approach.”
Apart from financial planning, family office clients want risk advice on a broader scale that includes family continuity planning and philanthropic advice.
“Advisers need to bring in other services, even if the family office provides some of these in-house,” Benevides said.
“The family office business is becoming more complex and clients are demanding more services.”
One of the problems facing advisers is family offices want a point of difference in the services they provide.
“The challenge is for the advisers’ firm to differentiate their services from everybody else,” he said.
“The answer is to be focused on the service delivery and not offering a product.”
According to research by VIP Forum Research, the main point of difference for advisory firms is quality of advice (42 per cent) followed by service quality (26 per cent).
Benevides said the standard approach to reaching this high-net-worth market is to keep adding services to the product offering, but that doesn’t work.
“It is a complex mix of very expensive services rather than finding the solution to the problem the client wants,” he said.
“The best way is to focus on client fit in the company.”
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