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Sponsored feature: Single family office 2.0

The next generation inspires an upgrade and reinvention of roles and responsibilities
A rapidly changing, increasingly interconnected world and evermore mobile lifestyles are altering ultra-high-net-worth (UHNW) business and banking needs. As a result, single-family offices (SFOs) are confronting change, particularly as the next generation assumes responsibility for family enterprises and assets.

There is always a next generation, one that sees and does things differently than the generation before it. A next generation always responds to the challenges, opportunities and realities of its era. While this can create upheaval, it can also create opportunities for affluent entrepreneurial families and the SFOs managing their wealth, according to Casper de Nooijer. As the second generation of his family’s industrial cleaning business, a former chairman of its Supervisory Board, a frequent lecturer and consultant on family businesses for PwC he speaks from both personal and professional perspectives.

Casper’s area of expertise includes family governance, next generation and family ecology. He helps family businesses solve problems based on his own family-enterprise experience and his business background, having previously worked in finance for Dutch multinational Heineken. “I focus on strategy, growth, governance, values, and succession, and on providing insight through structure,” he says. “All these are not only applicable but essential for aligning family offices with the needs of the next generation.”

The next generation at a glance
“The current next generation, aged 20 to 45, is more mobile, educated, internationally oriented and tech savvy than the previous one. Next gens also operate in a much more challenging business environment, with continued economic crises and intense market and job competition,” Casper explains. He points out that while assets may be inherited, success is not, and it’s no longer enough to be the next owner of the business; one must be a leader.

As next gens are often educated abroad, with a North American approach, they embrace a servant leadership style. “Whereas the previous generation led more unilaterally, putting family ahead of business, the next generation is more likely to put business ahead of family, placing equal if not more importance on employees, customers, suppliers and community,” he says. “There is more appreciation of diversity as an opportunity instead of a threat, which in turn supports further professionalisation of family businesses by bringing in external expertise.”

Casper says this stems from a sense of responsibility and to belonging to something bigger, which typifies today’s next generation. That responsibility extends beyond the personal into the corporate, social and investment realms. “The next generation is very focused on transparency and sustainability – on how responsibly a business is run, whether investments are socially responsible, and on being active in philanthropy,” he confirms. “Again, it’s an outward as opposed to inward focus.”

Reinventing the SFO
The next generation’s outward orientation might initially seem at odds with the sometimes-rigid structures of an SFO. However, Casper feels the current circumstances of the next generation, their families and their SFOs offers a chance to evolve needs and values to mutual benefit. “Of course, each family office has its own particular governance and guidance, but new perspectives or preferences from the next generation can help update or optimise how families and their SFOs interact going forward,” he says. “As the next generation constantly reinvents itself, there’s an invitation for SFOs to upgrade by doing the same.”

For instance, with the next generation trotting the globe and increasingly doing business via the internet, this may mean providing more flexibility via virtual channels. “In my own case, I want to be able to compare products on the internet and select what fits my lifestyle financially and logistically, and not necessarily choose from a menu of legacy offerings. And while I need to rely on our SFOs’ technical investment expertise, I want to be sure the investment choices that are made on my behalf are ethical,” Casper emphasises.

This presents the SFOs with new roles and responsibilities that can transform and cement the relationships with the families they serve. “I’m looking for things like such as practical financial mentoring, in-depth portfolio reporting on sustainability aspects and round-the-clock, remote access and advice through online platforms,” Casper says. He feels a family office should function more like an app and less like an institution, facilitating rather than formal function, and he sees as role for private banks as a partner in this evolution by virtue of how they tailor their offerings for and service UHNW individuals.

Exclusive international SFO seminar
Casper presented these thought-provoking insights and innovative ideas during the first global ABN AMRO Private Banking SFO seminar, themed “Key challenges in a changing world”, held in Amsterdam in March 2015. The seminar was attended by 35 representatives of major SFOs from around the globe that all share similar issues. These include a lack of information and investment capabilities, risks related to family investments and spending, the impact and role of digitalisation and big data on service and security, among others.

Participants enthusiastically shared knowledge and experience related to servicing this demanding and discerning client segment. Special emphasis was placed on the next generation so that family offices understand their needs, identify service opportunities, become as relevant as possible and add value.

The interactive programme featured ABN AMRO’s investment expertise as well as insights from industry insiders, professionals and partners – such as Casper – during comprehensive workshops, panels and round-table discussions. “The SFO seminar underscored the importance of not only the next generation of wealth but of the next generation of private wealth management, and successfully showcased their mutual benefits,” he concludes.
 

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