We were joined by over 100 members of the Family Office community at the Global Family Office Community’s Annual USA Gathering in Beverly Hills on the 2nd of November.
The event featured insightful panel discussions on various topics concerning the Family Office space. Co-founder Paul Westall participated in one of the panels alongside three other esteemed experts in the Family Office space. For those who missed the event, this blog post summarises the panel session "Discussion on Family Office Trends," offering a comprehensive exploration of Family Office trends and insights.
Key Messages from Paul's Session:
Trends in Family Office:
The panel delved into megatrends in the Family Office space, with a notable observation by co-founder Paul Westall. He highlighted the growing trend of Family Offices embracing remote work, influenced by pandemic measures. As a recruitment expert working with Family Offices, Paul also noted the increasing recognition of the importance of competitive compensation packages, particularly Long-term Incentive Plans (LTIPs) within the Family Office space.
One speaker highlighted that as family wealth grows, the appetite for complex investments increases, giving rise to tax and accounting needs. Another panellist suggested that many Family Offices may lack the human capital to address their tax needs and advised the audience to consider investing more in the recruitment process of Family Office professionals.
USA Family Offices:
Family Offices in the USA exhibit a greater openness to collaboration and co-investment compared to their global counterparts, with a much higher exposure to Private Equity. As the most mature market for Family Offices, Paul found that Family Office employees in the USA are the highest paid globally.
Investment Preferences and Global Similarities:
Family Offices worldwide share many similarities, particularly in the purpose of the Family Office. Paul pointed out that wealth preservation is the most common motive for setting up a Family Office. This has prompted an increasing diversification across various asset classes. That being said, Equities, Private Equity, and Property continue to dominate Family Office investment portfolios. Risk appetite is notably increasing post-pandemic, reflected in the rise in allocations to Private Equity, both direct and through funds.
Changing Entry Levels:
The emergence of Virtual Family Offices has significantly lowered the entry barriers for Family Offices. This shift in structure reflects the evolving landscape of Family Offices, making them more accessible.
Governance and Mission Statements:
Panellists emphasised the importance of governance as Family Offices grow and begin to integrate the new generation of family members. They highlighted the need to have a clearly defined mission statement. Regular revisiting of mission statements every 4-5 years is recommended to ensure alignment with changing values and global shifts.
Global Mobility and Succession Planning:
Family Offices are exhibiting greater global mobility, with 30% of Family Offices having more than one location. This is particularly prominent in the USA, where migration to tax-efficient states like Florida and Texas is prevalent. The panel underscored the critical importance of succession planning for C-Suite roles, with a notable impact on job stability during unexpected events. Paul illustrated this with his encounter with a client who unfortunately passed away unexpectedly. With no succession plan in place, all C-level staff lost their jobs when the Family Office was reeling.
The opportunity to share ideas, knowledge, and network with peers from across the USA and around the globe was enriching. It is truly an honour to be part of this amazing community. We have always enjoyed attending GFOC events and we look forward to future events as well as continued collaboration within this exceptional community.
