Last week, we had the pleasure to speak with Mark Tepsich, Executive Director and Senior Strategist for Family Office Solutions at UBS. At UBS, Mark assumes a central role in serving Family Offices and offering them solutions regarding governance. In this interview, we delve into Mark's journey into Family Offices and UBS, as well as summarise his invaluable advice for navigating the complexities of Family Office governance.
The journey begins
Mark's journey into the Family Office space spans over fifteen years, beginning with a role in a multigenerational Single Family Office with more than 50 family members, where he served as general counsel. His transition to UBS was driven by a desire to be in New York City. In 2018 after the sale of his first family’s company closed for $11.4bn, he made the move to work for an investment advisory firm to establish their Family Office platform, before joining UBS over two years ago.
Mark had a very different career trajectory compared to other professionals who work within the Family Office space. Most people would start in a corporate environment before entering the Family Office space. Mark's journey began with a direct entry into a Family Office via an internship during law school. He believes this unique path has equipped him with the ability to navigate a diverse array of responsibilities concurrently, unlike those who tend to specialise in narrower areas within corporate settings. For a decade, he was embedded with a family as they navigated multiple inflection points, both personal and business.
Responsibilities at UBS
Currently, he plays a vital role in serving Family Offices across the US and the Americas at UBS. He has helped numerous families establish and evolve their Family Offices, from inception to maturity. With a diverse clientele ranging from first-generation to dynastic families, Mark's responsibilities extend to advising on family business governance and facilitating long-term decision-making processes. His unique perspective, shaped by experiences working within a Family Office underscores his deep understanding of Family Office dynamics and governance principles, making him an invaluable asset to the ecosystem.
Mark's expertise enables Family Offices to navigate complex governance challenges effectively. Mark provides comprehensive support to Family Offices across various governance domains including Family Office councils, Executive Councils, Investment Committees, business boards of directors, private foundation boards, and private trust company boards.
Advice for Family Offices
Wealth transfer
In discussing the current challenge of the great wealth transfer, Mark emphasises the importance of facilitating open communication and fostering a shared vision among family members, particularly during times of transition.
He notes that while governance may seem daunting, often associated with rigid elements like rules, policies, committees and boards, its behavioural aspect holds paramount importance within Family Office settings. Mark advocates for the implementation of robust governance structures that extend beyond financial considerations, encompassing family values, intergenerational dynamics and long-term strategic planning. Furthermore, he advises families to prioritise transparency in governance. He stresses the importance of seeking guidance from experts well-versed in the intricacies of Family Office operations when navigating governance matters, as corporate governance is in nature, very different from Family Office governance.
Next generation
Mark highlights a significant distinction between the first generation, typically bold and proactive as wealth generators, and the next generation, often perceived as less bold and strategic inheritors. This contrast often instils fear among wealth creators when considering engaging the next generation with their wealth. However, Mark stresses the importance of not allowing this fear to hinder succession planning. Instead, he advocates for proactive engagement and nurturing of the next generation from an early stage. By involving them in the wealth management process and providing guidance, wealth creators can prepare the next generation to effectively steward the family's legacy with confidence and competence.
Investment Committee
In many cases, families generate their wealth from operating companies, often lacking financial services expertise or investment knowledge. Recognising this, establishing an Investment Committee proves highly advantageous. Mark reinforces this notion, emphasising the importance of hiring independent, objective, third-party professionals who are not family members to sit on the Investment Committee. He highlights the numerous benefits of Investment Committees, including informing families and external advisors, as well as serving as a valuable learning platform, particularly for the next generation.
Common pitfalls
Mark identifies a common pitfall in Family Office governance where families attempt to construct the structure "in a vacuum," He stressed that Family Office governance must be a collaborative effort, and this is often overlooked by the Principals. He recalls an instance involving a family with over 40 members, where only one individual was responsible for drafting the constitution. He believes it is very important to engage all family members in the governance process and allow everyone to have ownership.
Best practices
In terms of best practices, Mark advises families to prioritise the softer aspects of governance alongside technical elements. He stresses that governance encompasses more than just technicalities, emphasising the importance of behaviours. Mark advocates for preparing the next generation adequately for their roles within the Family Office and suggests focusing on enhancing family connections and facilitating communication to bolster governance efforts.
As families navigate the complexities of wealth transfer and succession planning, Mark's advice serves as a guiding light, reminding us that effective governance is not just about rules and policies, but about nurturing trust, transparency, and collaboration among family members. With his wealth of experience and deep understanding of Family Office dynamics, Mark Tepsich continues to be an invaluable asset to families seeking to safeguard their legacies for generations to come.
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