Family office advisers who are experts in multiple disciplines can help family offices to navigate the ever-evolving global business environment and the many shifts and challenges it presents. All while ensuring the engagement of multi-generational family members across the board.
Here’s a list of the top five experts every office needs:
Communication plays a fundamental role in all facets of business and relationships. As the family office forms the nexus of all business-related communication to and among family members as well as external stakeholders, clear, efficient, timely communication sharing is an absolute necessity. In fact, according to the Global Family Office Report 2019, 66% of families regard improving communication between the family office and family members among their top governance priorities over the next 12 to 24 months.
Communications practitioners can not only help to facilitate internal communication whilst ensuring that the right messaging goes to appropriate parties at the right time but they can also assist with crafting communication and aligning it to the next generations preferred methods of communication using media and technology, ultimately keeping them engaged.
These professionals often audit current communication platforms, strategies and processes and implement digital communication software and tools that can be used to plan, create and deliver these types of messages and reports securely and efficiently.
Family Dynamics Expert
Many family-run businesses don’t make it to the third generation. With this in mind, succession planning is critical to ensure their long-term survival. Yet, the GFO report indicates that just over half of family offices have succession plans in place.
Succession planning is often a complicated subject, fraught with emotion. This is because it’s inextricably linked to the fact that the owner is going to retire. Regardless of how accomplished the heirs to the business may be, there’s generally the question of whether they’ll run the organization as well as their predecessor. And if they even care to do so. The interplay between business strategy and family dynamics involved can be the source of serious conflict, with both the fate of the business and the family hanging in the balance.
For this reason, it is best to address family dynamics, governance and, ultimately, succession over the long-term, treating it as a process and not an event. A family dynamics consultant who specializes in psychological guidance can assist in facilitating this process over many years.
These specialists are trained to help families ask and answer difficult questions regarding things like who is the best qualified to take over, how to do things reasonably, how things are decided, who gets a vote and the process for execution of these decisions. They are also experts at assisting families in navigating the different generational perspectives on wealth and the consequences this can have for the business to map out a clear path for this transition in a way that best serves the greater family.
Impact Investment Adviser
Impact investments not only yield market-related returns but provide ways for investment capital to harness the power of the markets to address global issues that grants and government policies simply cannot. This makes them a powerful way to solve some of the world’s most complex problems at scale, while also engaging the next generation.
It is little wonder then that these types of investments are garnering growing interest and popularity within the family office space. The 2019 GFO report indicates that a quarter of all family offices are already involved in impact investing.
Family offices looking to make successful impact investment decisions should consider recruiting an impact investment adviser. This new generation of investment advisers are experts in determining a family’s values, objectives and risk tolerance. They then assist in strategically matching these with impact causes that have either a social or environmental impact that aligns with these criteria, while also generating financial returns within acceptable, predetermined timelines. Once matches are identified, these specialists assist in the evaluation of the necessary due diligence to ensure that the decisions are sound. They also play a pivotal role in helping families to define the measurements by which the success of these investments are judged.
As technology advances rapidly and the internet of things (IoT) takes center-stage in both our personal lives and businesses, we’re becoming increasingly vulnerable to cybercrime.
In 2018, the IBM and Ponemon Institute’s Cost of a Data Breach study revealed that the average per-company cost of a data breach was $3.86 million globally. Juniper Research findings show that data breaches will rise by an average of 11% annually, taking global costs from $3 trillion to over $5 trillion by 2024. Furthermore, the GFO report reveals that 20% of family offices have experienced a cybersecurity attack. Of these, 76% involved phishing, 33% malware and 33% social engineering.
Cyber threats aren’t the only reason to take cybersecurity more seriously than ever before. Regulations such as HIPAA and the EU’s General Data Protection Regulation (GDPR), among others, require that organizations take cybersecurity precautions. If they don’t, stiff fines may be incurred. Mishaps, when it comes to personal data breaches, can also elicit public outrage and mistrust, which, in themselves, can cause reputational and economic harm.
Considering these statistics and the associated costs not having cybersecurity, family offices simply cannot do without cybersecurity specialists. In addition to safeguarding the business against cyber threats and ensuring security compliance, these experts can offer awareness training to organizational members. This is something that Juniper’s research shows will become increasingly important in organizational practice.
Reputation is one of the cornerstones of the family office. This intangible asset is among the most vital and difficult to establish while being the easiest to damage and hardest to restore. In the data-rich digital age, where transparency is the order of the day and the boundaries between what’s business and what’s private are increasingly blurred, protecting the family office’s reputation requires discipline and strategy. If family offices aren’t managing their own narratives, they risk having external parties doing this for them.
With increasing globalization, family offices are dealing with far more international partnerships than ever before. Each market comes with its own culture, etiquette and subtle nuances that must be considered.
Reputation managers adept at not only handling reputation and PR issues but who are also able to fill diplomatic roles, helping to look after global partnerships with finesse and so are becoming an essential part of the family office advisory team.
As a myriad of new challenges arises within the modern global and business environment, human capital in the form of these next-generation family office advisors is the key to longevity and continued success. While your family office may survive without them now, the question to ask yourself is can it thrive and prosper in future?
This post originally appeared on Forbes.