Family Office

INTERVIEW: The Non-Financial Side Of Family Offices Isn't A "Soft" Topic

Tom Burroughes Group Editor London 19 July 2016

INTERVIEW: The Non-Financial Side Of Family Offices Isn't A

The author of a book about building a "family bank" and advisor to family offices recently caught up with this publication.

A Canada-based family office luminary and author on the sector frowns on the use of the adjective “soft” in describing the non-financial skills involved in getting often complex families to hold together and guard their wealth, as she explained recently. 

“The most important non-financial topic and role of FO should be strengthening family communication, especially around the shared values and visions of the families they work with,” Emily Griffiths-Hamilton, who last year produced a book on the sector, told this publication. 

“I start by challenging how people use the label `soft’ topics, we should start by not labelling them as `soft’, they are the intangibles assets, and anyone in business knows the intangible assets are often the most valuable assets of any business, and I believe the most valuable asset of most families,” she said. 

A chartered accountant and investment advisor based out of Vancouver, last year she issued a 157-page offering, Build Your Family Bank, A Winning Vision For Multigenerational Wealth. (It was reviewed here.) She is one of a number of people advising families and writing about the family offices space. Another example is Greg Curtis, whose writings have also been reviewed by this news service. That such authors and commentators are active suggests there is continued demand on how to set up FOs and avoid making costly mistakes. For in the minds of many wealthy families is that grim message: Shirtsleeves to shirtsleeves in three generations.

“Research has highlighted globally that in order for families and family offices to ensure multi-generationally success, there is a need to improve skills especially in areas around communication and developing shared values and visions and in this regard I do see signs of positive change,” she said.

She wants to demystify the process behind creating a family office; as well as advising wealthy clients in her home turf of North America, she has travelled further afield and it was noteworthy that Griffiths-Hamilton caught up with this publication while she was on a business trip to London.

A challenge for families that want to protect wealth over the generations is getting investments to grow, for example, isn’t necessarily the only, or even most important, task at hand. For example, ensuring the younger generations are educated to handle wealth, and that a family office has a constitution and sense of purpose that members can buy into, are just as important to get right. 

According to one definition, a “soft” aspect of family office work is the qualitative side, such as education, governance and family dynamics (handling of conflicts). The term can in fact cover anything that isn’t around something that cannot be easily priced. This fact can create a challenge in working out how much to charge overall, as well as to decide what sort of services can be best performed in-house by a family office, and done by external experts. 

This subject is one that exercises Griffiths-Hamilton. This publication asked her about the state of the family office market in Canada. The sector is relatively small compared with that of the US. Names of MFOs include Northwood Family Office, based in Toronto; Holdun Family Office (Toronto and Montreal) and Stenner/Zohny Investment Partners + Richardson GMP Wealth Management. (Single family offices are harder to track down, by their very nature.)

It is a varied field, Griffiths-Hamilton said. “Canadian FOs are as diverse as the families they serve, dealing with more than the financial assets but also the human and intellectual assets of the family, in areas such as communication and education, helping to prepare family members for their future potential roles, responsibilities and opportunities.

“We have a significant number of enterprising Baby Boomers who are selling their businesses; these are businesses in a wide range of industries and include everything from Canadian resource-based industries such as mining, forestry and fisheries, to manufacturing and tech industries. The result is that previously industrial families are re-formatting and becoming financial families that require new and or additional skills and expertise, which is partly where the FO plays an important,” she said

Although not as large as the US family offices space, Griffiths-Hamilton doesn’t think it is particularly young and it is growing. 

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