A family office is a private company that handles the assets of a family. It is important to distinguish between single family (SFO) and multi family offices (MFO). The corporate dynamic for SFOs and MFOs are fundamentally different as one is a uniquely tailored solution whilst the other has to combine and compromise. Also, it is often the case that an MFO is not owned by the families whose wealth it manages. What is true for both: The primary objective is to grow the wealth of the family. The secondary objective is to ensure that the assets are transferred across future generations.
That is clearly the perception of the past or at least it is incomplete. The future of family offices is much more diverse and holistic. Why? Because a generational shift is coming. Within the next years, we will witness the greatest wealth transfer the world has ever seen.
It is a fact that the world is changing. It is also a fact that if a family office wants to fulfil its mandate, it has to change with the times but more importantly it has to anticipate the future. The family office of the future has to accommodate the evolving needs of the family or the families it serves. The service with the highest surge in demand is lifestyle management. This entails looking after all aspects of the client's needs, not just growing assets. As the family officer is a highly trusted person, he or she will often be confronted with wishes that lay outside his or her purview. You wonder why? This is due to a generational shift that will continue to gain importance as the great wealth transfer approaches.
The fading baby boomer generation was all about building and growing, whilst generations X and Y are more about living. Gen X which is now mostly in their 40s and grew up in prosperity. This generation strives for independence and individuality. They are also loyal but question traditions and authority. The leading motto for this generation is "work hard, play hard". The next generation is Gen Y. They are mostly in their 30s now and value experience over possessions.
What does this mean? It means that the next generation of wealth management clients will ask their trusted advisors to help them with enjoying life. It means that the family office that wants to be successful no longer needs to think purely about numbers and performances but also about emotions. At Veltracon Lifestyle we are in constant pursuit of the Triple A approach. Not the AAA rating you find on a financial instrument but rather the limitless access to the luxuries and experiences of this world: Anything. Anytime. Anywhere. It is our core competence to serve UHNWI clients in obtaining the unobtainable.
So to answer the questions in the title. The future of family office services lies in the successful addition of lifestyle management to the current offering of services. The holistic inclusion of such services enhances the customer journey at every step of the way because it satisfies, entertains the client and resolves issues that were not attended to in the past.