Bedell Family Office make STEP short list and highlight themes to emerge from Montreux summit

15 Jul 2013

Bedell Family Office, which expanded and strengthened its team at the start of the year, has been short listed in the prestigious STEP Private Client Awards 2013 in the Multi-Family Office Team of the Year category. Bedell Trust has also been short listed for the Owner-Managed Trust Team of the Year award. The winners will be announced in London in September.

Two senior members of the Bedell Family Office team, Directors Ian Slack and Richard Joynt, were both speakers at the Family Office Summit in Montreux recently. The summit explored a number of key themes, summarised below, which in turn helped to identify concerns that wealthy families have in the short to medium term.

1. The challenge of a low interest rate environment

There is no doubt that the world changed in 2008 following the financial crisis. Since then families have become increasingly concerned about the low income environment. Having become used to double digit returns from investments prior to this date, the prolonged period since the Lehman collapse continues to be a challenge for wealthy families. This has forced families to re-evaluate their cost options and in some cases this has led to streamlined back office functions or outsourcing of functions to achieve economies of scale.

2. Risk appetite

Wealthy families face a dilemma in such an environment. For many, the instinct is to hoard cash as this is a safe haven in such times of uncertainty. However, with cash yields at an all-time prolonged low, this can exacerbate the issue raised above. Therefore, some families are taking steps to invest into higher risk assets or in higher risk locations, but are proceeding with great care and deep due diligence. Perhaps a legacy of the global financial crisis will be that those families seeking higher returns accept that with higher risk comes a strong requirement to fully understand the nuances of the projects they are invested in.

3. Assessing the value of philanthropy

Today’s wealthy families are more sophisticated and want to see the impact of their philanthropy. This is leading to certain firms offering private equity funds which offer a modest financial return in exchange for strong social impact. As these social impact investments are being financed in a sophisticated way by financiers who expect corporate discipline to be applied, growth can sometimes be achieved that would not have been possible, if managed by those with a charitable background.

4. Regulatory change

The summit also highlighted that some key finance centres are in a state of flux as regards regulation. The anticipated regulatory changes in Switzerland may require single family offices which have typically relied on a single adviser to become regulated. The rise in regulatory costs in such a context may lead to consolidation in the sector with Swiss single family offices coming together or joining existing multi family offices to drive cost efficiencies.

For more details of our expanding range of multi-family office services please contact either Richard Joynt or Ian Slack.