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BFI@SMU Professional Advisors Workshop - Evolving into Effective Advisors for Family

Learnings from BFI@SMU Professional Advisors Workshop - Evolving into Effective Advisors for Family Offices on 31 Oct 2017

How can advisors help Asian family businesses deliver long-term returns while creating lasting value for the family? This was the theme of the one-day Professional Advisors Workshop organized by the Business Families Institute at the Singapore Management University recently. Designed for private banking relationship managers, the intensive training programme gave participants an opportunity to understand and design investment solutions unique to family businesses while working through real-life cases and examples.

Key takeaways from the workshop were as follows:

1.Focus on the ‘family’ behind the business – Family business advisors have the tough job of balancing business needs and individual goals of family members while supporting growth of the company. By understanding family dynamics, trusted advisors can direct family members to better possibilities, anticipate the sore spots, seek out alternative methods to solve problems and ask the hard questions when required.

2.Invest in understanding the family’s investment objectives – Personal aspirations of the founder can take precedence over maximising bottom line profits while determining a family’s investment plans. For example, a family business involved in the technology industry may choose to pursue largely philanthropic opportunities through its investments. Such objectives are often not evident in the first conversation. To recommend an optimal set of investments products, an advisor has to take the time to understand the family’s investment motives.

3.One size does not fit all – Multiple stakeholders in the family business can have conflicting views on the direction that the business should take. An advisor has to take into account views of the ‘next-gen’, founding members and extended family while drawing out an investment framework. The older generation may be more interested in capital preservation to ensure adequate funds in retirement while the younger generation wants to raise capital to finance new ventures.

4.Build domain knowledge beyond banking – A personal advisor can go beyond just financial advice and act as a catalyst for the family’s innovation efforts. A well-informed advisor who is aware of the current industry trends and builds expertise in supplementary areas such as technology and trade can offer more holistic solutions.

5.Work with a multi-disciplinary team - A single advisor may not have the expertise to address all of the client’s investment needs. A certain business may require an investment in alternative instruments while the advisor’s core competency may be in fixed income products. Advisors should then take advantage of specialized resources both within their organization and outside to help their clients find personalized solutions.

With a growing trend of virtual family offices and businesses appointing virtual Chief Investment Officers, private banks need to focus on their unique strengths to remain relevant. Their rigorous on boarding process and ability to offer a wide suite of corporate lending products can help them offer solutions that their competitors (such as a Multi Family Office) cannot. This was evident in the recommendations made by the participants on a case study discussion that concluded the training session.

Last updated on 01 Aug 2018 .