Family Office Leaders are Eager for Insights

Family Office Leaders are Eager for Insights


Single-family offices serving the financial and wealth management interests of rich families have become a growing force in global markets as wealth has boomed.

In the last 10 years, the number of single-family offices managing wealth management, investing and philanthropic needs for families with at least $200 million has doubled to as many as 15,000, according to Citi Private Bank. Yet little is known about how many of these offices—managing several trillion dollars of assets—operate. Even executives who run single-family offices are often in the dark about what their peers do.

But unlike the past, these execs are not as worried about privacy and confidentiality—they want to reach out and learn from other family offices. They view their role as more as an emissary for the families they serve, rather than a “gatekeeper,” keeping other outside experts at bay, says Stephen Campbell, chairman of Citi Private Bank’s global family office group, and the former chief investment officer of a large Seattle-based family office.

One way the veil can be lifted is by getting family office executives together, which private banks and wealth managers that serve them as advisors and bankers, try to do. In fact, many single-family office practitioners, once happy to work alone, are now eager for insights they can gain from their peers and will seek out opportunities to network with the right people, Campbell says.

“We’ve seen a significant pick up in interest in (learning) what’s working, what’s not working and how they can learn from the mistakes of others,” he says.

A familiar adage in financial services is that, “if you’ve seen one family office, you’ve seen one family office,” meaning, no two are alike. But the truth is, the operations of most family offices are very much the same, he says. Most of them have to manage investment portfolios, estate planning and philanthropy, as well as paying bills and handling legal affairs.

“Where they differ is in areas of culture and values, and in the governance biases and practices of the family,” he says.

Campbell’s insights are well-founded: Citi works with 1,100 family offices, most of them serving a single family. Most also use Citi as their primary bank, he says.

How families communicate with the offices that run their wealth management needs is one area that can differ wildly. One of the families Citi works with, for example, established a family office in a separate jurisdiction from where they lived, a practice that can provide tax advantages. The office was set up nine years ago with a staff to run it, but as of today, no one in the family has ever been there, Campbell says.

At the other extreme, a principal member of another family that works with Citi goes into his family office every Thursday, sometimes with other family members, and they cook a meal together with the staff. “Oddly enough, those are both models that work,” he says.

Citi has found families are willing to share what’s worked for them on a range of topics if they can exchange ideas with families of a similar wealth level and degree of sophistication. Two years ago, the private bank began a “family office leadership program” in New York, which includes 125 family-office executives serving the world’s “most affluent families,” Campbell says. The event has now spread to programs in Hong Kong and Dubai, and elsewhere to accommodate demand.

Because it’s difficult to cover all the topics families want to discuss, Citi is now rolling out a series of articles and white papers on nitty-gritty topics, like, “why family offices are increasingly relying upon bespoke remuneration packages to attract top executive talent” and “how grooming tomorrow’s family leaders can help preserve family wealth and influence and prevent discord in the family.”

There are a lot of “how-to” manuals on how to set up and run a family office, Campbell says, but “the nuance is in how and when to apply these concepts, and that’s what we’re tackling with these articles.”


To Educate IAS Daughter, Kashmiri Family Ate Less, Sold Jewellery

To Educate IAS Daughter, Kashmiri Family Ate Less, Sold Jewellery

Bisma Qazi is one of the 14 candidates from Jammu and Kashmir to have cleared the IAS exam.
SRINAGAR: Last August was a difficult time in the Kashmir valley. Street protests had broken out in mid-July after Hizbul commander Burhan Wani was killed in an encounter. And every time the security forces controlled mobs throwing stones with pellet guns, they left people on Kashmir’s streets angrier. Thousands had been injured in the protests and much of the valley had been under curfew for days at end.

But in the midst of the turbulence, there were many who didn’t let the conflict around them get to them and stayed focus at the task at hand; cracking the civil services examination to join the IAS, or the Indian Administrative Service.

“I tried to keep calm at my heart and mind. That was need of the hour,” recalls Bisma Qazi. The 25-year-old engineer from Srinagar’s uptown area is one of the 14 candidates from Jammu and Kashmir to have cleared the examination, a record for a state.

That includes a police head constable’s son Suhail Qasim Mir from Bijbehara in south Kashmir, who cleared the examination in his first attempt. Or Bilal Mohi Ud Din Bhat, who had set his eyes on joining the civil services early in his life, and made it to the 10th rank in his fourth attempt.
A key inspiration for many of them was the Shah Faesal, the 2009 batch IAS officer who hit national headlines when he topped the exam. Bisma said Mr Faesal, who many say opened a window of hope for Kashmiri youth, was her inspiration too.

“Only inspiration for all us is Shah Faesal – he is the one who made the path easier for us” she told NDTV.

But it was her parents who made it possible that she has come this far. Mother Haleema had sold her jewellery to get a decent education for her three children. “When my two kids got admission in engineering, I told them you don’t have to worry, I have jewellery which I sold,” said Haleema. Father Mohammad Shafi talks how they cut corners, on food and clothing to save money for Bisma’s education.


Family Businesses Gear Up for Growth, But Stumbling Blocks Remain

family businesses0After a few years of caution, U.S. family businesses are feeling optimistic and ready to grow again, according to PwC U.S.’s third Family Business Survey. Some 93 percent of U.S. family business owners feel confident about their future growth prospects, compared to 81 percent of family business owners globally.

That’s not to say it’s all smooth sailing.

The economy is still a key issue for family businesses in the coming year, with 68 percent saying market conditions are a primary concern. However, that’s down from 88 percent who were worried about market conditions in the prior survey two years ago.

In addition to greater optimism about external factors, family businesses in the U.S. also feel more confident about their internal operations, with more than three-fourths saying they plan to pass their business on to the next generation (up from 55 percent two years ago).

Although family businesses are planning growth, they’re not rushing into it but instead taking a long-term view. The majority (82 percent) say they plan to grow steadily over the next five years. Just 11 percent of businesses say they will grow quickly and aggressively.

Overall, however, family businesses are taking a more proactive stance seeking opportunities for growth. Companies in the study were focused on investing in innovation and expanding to international markets. More than half (58 percent) see innovation as key to growth, while almost half (47 percent) are expanding overseas, and 54 percent expect to do so in the future. This is a significant increase from the 30 percent who had plans to sell internationally two years ago.

What are the biggest challenges for family businesses, and how can they overcome them? PwC identified two key areas:

Talent Shortage – Both Internal and External

More than half (52 percent) say it’s hard to find employees with the skills they need to compete. Within the family, succession planning is a concern, with 50 percent worried that the next generation doesn’t have the skills or drive to lead the business going forward.

What can they do?

Focus on grooming successors now. Succession planning is still a stumbling point for family businesses, with 38 percent of the survey respondents saying this is a major challenge for them. Develop a plan and work to ensure your family members will be ready to move into key positions when the time comes. If they don’t have the aptitude or desire, your plan should involve developing talent among non-family key employees or bringing in outside expertise.

Even among those family business owners who plan to pass ownership of the business on to their heirs, 24 percent say they will bring in outside management to help run the business.

Technology Changes

Family business owners see technology as a double-edged sword. While technology has enabled many family businesses to scale and thrive, the rapid pace of change makes it hard to keep up. More than one-third (39 percent) say the need for new technology will be a substantial challenge for them over the next five years.

What can they do?

Take advantage of the younger generation’s natural relationship with technology. Groom in-house talent to keep up with technological change and learn the IT skills that will be needed to keep your business competitive in the future. Then give the younger family members the freedom to make real changes in how your business is run.

What challenges is your family business facing this year and beyond?

Farming Couple Photo via Shutterstock


Apple Shuts Down iTunes Allowance, Directs Users to Family Sharing

Apple Shuts Down iTunes Allowance, Directs Users to Family Sharing

Apple no longer allows users to to set up iTunes Allowances for their kids as it plans to completely shut down the programme on May 25 this year. The feature allowed parents to set up a monthly credit line for kids to spend on App Store and iTunes.

The announcement came via a support note on the Cupertino-based tech firm’s website. “After April 13, 2016, you will no longer be able to create a new iTunes Allowance. All existing allowances will cancel May 25, 2016,” the note said. The firm added that post May 25, the unused allowance credit will remain in the user’s account until it has been used.

As Apple shuts its iTunes Allowance programme, it is suggesting affected users start using the Family Sharing feature as an alternative. Also, this will not affect the availability of iTunes Gifts as users can still buy it and send it to friends/ family.

Family Sharing in iTunes was introduced by Apple with iOS 8. The feature lets you share your purchases – such as books, apps and music – across family members without having to share iTunes accounts. So, for example, if a kid wants to buy an app using the family’s iPad, the parent (or family organiser) verifies the purchase from their iPhone. It also means that if one family member has paid for a book on your iPhone, the rest of the family doesn’t need to buy another copy of the book, or borrow their device, to read it.

iOS users would need to set it up on the different devices in your family. The family organiser invites the other members, and agrees to pay for any purchases the members initiate from their iTunes accounts. The family members can then accept the Family Sharing invitation from their devices once they’re signed into their iCloud accounts. Once the family members have joined, the features of family sharing get set up automatically. See how to set up the iTunes Family Sharing feature here.

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Tags: App Store, Apple, Apps, Home Entertainment, iOS, iTunes, iTunes Allowances, iTunes Family Sharing