April 3, 2017 admin

Working with the Next Generation (Next Gen) within a Family Office

In our previous White Paper on “When does it make sense to set up a Family Office” we explored the huge and unprecedented era of transfer of wealth from one generation to the next as the world’s most affluent individuals approach retirement and contemplate their succession and wealth planning issues. The needs of these families are extensive, complicated, and require expert advice, so many are considering a Family Office to help them manage this transition and provide a crucially provide a framework for the Next Generation (Next Gen).

The problem is especially difficult for many advisers is that they are ill-equipped to connect with these Next Gen clients who are technology savvy and expect a very different service experience than their parents did.

 

So how do you work with the Next Gen to ensure a smooth transition?

Engagement leads to stronger relationships.  Education coupled with strong communication results in a more empowered and engaged Next Gen.  Conceptually it’s simple.  In practice, it’s not.

So how do you get started?

 

Old-fashioned trumps high-tech

Millennials, Gen Y, Gen X, all names for the Next Gen, are often described as tech savvy, data-driven and social media-obsessed.  However, when it comes to engaging with their advisors, they prefer face-to-face meetings.    82% of those in the 2016 Veritage Next Gen study said they prefer in-person engagement, followed by phone, 72%, and email, 68%.  Communication through social media and Internet/video/skype weren’t particularly sought out, with a mere 15%, and 5%, respectively, seeking such interactions.

 

Start early

Building relationships takes time.  More than half, 54%, of the 2016 study respondents began working with their Family Office advisor when they were under 20 years old, and 38% did so in their 20s.  Initial discussions often centre around who the advisor is and what she does for the family.  Over time, advisors become more sophisticated in maintaining the level of disclosure with which the matriarchs and patriarchs are comfortable.  Much can be shared without putting specific dollar amounts on expected family wealth or inheritance.

 

Forge bonds with educational programs

It’s crucial to identify a manner to reach out to the Next Gen, whereby the older generations are comfortable and the Next Gen are interested.   General education fits that bill.  Gatherings including members of different families are particularly attractive. Approximately 75% of the 2016 study participants said they would be interested in attending a Next Gen program hosted by their Family Office advisor.  Next Gen members need the most support with investments.

 

Appeal to a sense of social consciousness

A hallmark of the Next Gen is they tend to be socially conscious.  Discussions around mission-related investing, philanthropy and making an impact are ideal to generate interest and engagement. All of the subjects can be used to teach about wealth management and as a stepping stone to getting them more involved in learning about managing their wealth.

 

Understand family values

The majority of the Next Gen have similar values as their parents.  A key to engagement is to find out what’s important to them—how they view wealth and its purpose.

 

Education is Key

There’s a direct correlation between how educated, and by association, how empowered, a Next Gen family member is, and her comfort and happiness with the Family Office advisors and wealth plans.  By establishing relationships with the Next Gen and helping them learn about their wealth, family offices will significantly increase their ability to retain their roles as trusted advisors.

 

Cavendish Family Office

We are an independent and modern multi family office catering for entrepreneurial families.

The business was founded on the basis that many international families wanted a different service which incorporated all aspects of their wealth, but without the conflicts of interest, or the need to invest money first.

We serve families from all over the globe including the USA, Europe, Middle East and Asia.

We also help families from unusual and high risk geographic jurisdictions or with political connections, such as PEPs.

Cavendish Family Office manages all aspects of wealth including Tax & Structuring, Accounting, Investment Management, Real Estate, Commodities, Alternative Assets (Art, Cars, Jewellery and so on) as well Concierge.  They also have expertise in dealing with the Next Generation helping shape the family’s legacy and ensuring that the wealth is maintained for future generations.

 

Mark Estcourt
Founder &CEO

mark@cavofo.com
07973 634 185