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The Inside Track on Servicing Family Offices

By Crucial Clips     November 8, 2017
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Oct. 2, 2017 

BRUCE LOVE, MANAGING EDITOR, FINANCIAL ADVISOR IQ: Hi. This is Bruce Love with Financial Advisor IQ. And I'm here with Dr. Rebecca Gooch, who is the Research Director of Campden Wealth. Rebecca, you've just finished this year's rendition of the Global Family Office Report. How's that been going?

DR. REBECCA GOOCH, RESEARCH DIRECTOR, CAMPDEN WEALTH: Yes. It's been a really busy year. It's a year-long process to produce this report. It's gone very, very well. This year we had 262 family offices from around the world participate. In particular, in North America, 31% of those came from that region. So it's been a fantastic year.

BRUCE LOVE: Rebecca, what are the key points for financial advisors this year when it comes to servicing family offices?

REBECCA GOOCH: I think there's a few things that they can do. I think one, we can see, given what we've reported in this year's Global Family Office Report, that we're going to see a significant generational transition in the next 10 to 15 years. And with that said, family offices' number one priority has been to plan for succession. And family office advisors can be a very, very useful tool to help them do that.

Another area is co-investing. It's an area that family offices have shown a real appetite for. But they've struggled a little bit in terms of a lack of deal flow, finding satisfying deals, being able to do the due diligence in-house. So there are things that advisors can do in terms of supporting them, such as they can help them build up due diligence facilities that are effective. They can also help them understand more about fund to family investing rather than family to family investing. So that's a couple things there.

There's another interesting point that came out. And in speaking with the interviews and some other aspects of the Report, we found that advisors can look at diversifying their staffs. We are seeing that women in wealth are really coming up into their own. And they're managing more wealth than they have in previous years. And in that sense, some of the responses have also been that it would be nice if advisors could have staff that kind of reflected that diversity.

BRUCE LOVE: That's fascinating. So the families who are being advised by these advisers are saying, we'd like to see more diverse staff within the advisories.


BRUCE LOVE: Ultra high net worth families and those who have their investments in family offices, they invest differently to even high net worth investors. They have different purposes, don't they, to a certain degree?

REBECCA GOOCH: Yes, to a certain degree. I think that family offices can look at investing, for instance, for social good. So we have an aspect of philanthropy. And we also have an aspect which is just giving. And we have an aspect of impact investing, which is another area which has taken up an interest in the family office community.

So we can see, for instance, at the moment, globally speaking, 28% of Family Offices are involved in impact investing. In North America, it's 31%. So it's an area that's really caught a lot of attention amongst the family office community.

BRUCE LOVE: I think advisors might be, advisors of people with less assets might be interested to know that impact investing, it has such high regard and high interest in the family office space.

REBECCA GOOCH: Yeah. It's definitely something that we speak with so many family offices and people in the community. And it's definitely an area that has caught a lot of attention. And it's something that family offices are very keen on getting more involved in. So absolutely.

BRUCE LOVE: The family offices also usually have, as you say, a large philanthropic target or goal as well. It's part of the way that they look at what the family offices are doing. Just explain a little bit more about the role of philanthropy in family offices.

REBECCA GOOCH: It's a really central role. It absolutely is. I mean, we can see family offices globally, on average, each family office gave $5.7 million to philanthropy. In North America specifically, that was an average of $8.4 million. There's a number of key areas that family offices tend to give, philanthropically.

Education is a key one. But one thing that's actually interesting we found this year is that giving to environmental causes and giving to poverty alleviation is something that more family offices have been directed towards this year.

BRUCE LOVE: Fascinating. Thank you so much.

REBECCA GOOCH: You're welcome.