Sean Cortis, a speaker at the marcus evans Private Wealth Management APAC Summit 2017, discusses why flexibility is critical for the long-term interests of the HNW family.
Interview with: Sean Cortis, Principal & CEO, Chapman Eastway
Macao, China, January 25, 2017 - FOR IMMEDIATE RELEASE
"Many families feel enslaved to their structures which are often rigid and virtually impossible to unbundle without at least incurring significant tax and other costs," says Sean Cortis, Principal & CEO, Chapman Eastway. "Flexibility is critical in managing the long-term interests of a HNW family; particularly since in many instances, issues of legacy and preserving family tradition further compromise or inhibit the family's ability to unbundle," he adds.
Cortis is a speaker at the marcus evans Private Wealth Management APAC Summit 2017, in Macao, China, 10 - 12 April.
Why should the family office structure be flexible? How do family needs change over time?
Families are multi-generational and complex - each generation of individuals is socialised by and exists within a different societal and cultural context, and the needs of individual family members must be considered and duly catered for in a flexible manner.
Wealthy families are also becoming more global - family members are migrating, seeking international education, business and financial investments are being diversified globally. This mobility requires flexibility - what works locally generally requires adaptability when looking globally.
Accordingly, the family office structure should be flexible so as to help the family not only cope, but thrive as it navigates the many complexities associated with being multi-generational and multi-jurisdictional. Moreover a family office ought to act as a family's governance framework to help with ongoing decision making in the context of the family's long-term vision and goals. It is this governance framework which supports the preservation and continuation of the family's life, goals and objectives.
Ultimately, flexibility in the operation of the family office is a key part of helping a family achieve its aspirations over time. Just like modern houses are designed to withstand earthquakes, the family office must allow some "flex". Too rigid and they break.
What impact can flexibility have on the long-term interests of a HNW family?
Flexibility helps to ensure that the long-term interests of a HNW family can continue to be met, noting that their more immediate priorities will naturally change over time, and across generations.
For instance, how a HNW family perceives the respective roles of and interrelationship between their family fund and family business should define the way they use and manage those structures. A flexible family office structure acts as an enabler in this regard, adapting as the family's needs and priorities change and mirroring the family's evolution over time. It protects the family (via the family fund) and simultaneously empowers the family to take calculated risks (via the family business). Flexibility means that a family office is always aligned with a family's immediate goals without losing sight of its long-term interests.
How can HNW families ensure they retain control over their familyï¿½s affairs?
HNW families should be empowered and supported to retain control over their family's affairs while appropriately engaging different advisors at their discretion and according to its needs at any given point in time.
Families should be given the freedom and ability to build and participate in the management of their family office, because one size does not fit all when it comes to family offices. A bespoke solution which entails flexibility and keeps the HNW family at its centre will ensure they retain an appropriate degree of control.
What advice can you share on succession planning? How can families plan for a smooth transition?
It is never too early to start planning and implementing a succession plan - yet many HNW families choose to defer it, due to it being "too difficult". However, succession reaches far beyond the mere transfer of wealth; there is also the transfer of control and management of the family's business and affairs. Importantly, succession sits within the overarching theme of the transfer of a family's legacy from one generation to the next. Therefore it ought to be given the priority it deserves within each family.
Moreover, the greatest impediment to succession and the perpetuation of multi-generational wealth is human nature rather than taxes and legal systems. So whilst family offices play a critical role in navigating and managing the complex networks of tax and legal systems relevant to a HNW family, I cannot overemphasise the importance of advising with empathy, particularly with respect to succession planning.
Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division
Tel: + 357 22 849 313
About the Private Wealth Management APAC Summit 2017
The Private Wealth Management APAC Summit is the premium forum bringing elite buyers and sellers together. The Summit offers regional SFOs, MFOs, wealth advisors, and international fund managers and consultants an intimate environment for a focused discussion of key new drivers shaping wealth preservation and investment strategy. Taking place at the Conrad Macao, Cotai Central, Macao, China, 10 - 12 April 2017, the Summit includes presentations on building sustainable portfolios, tapping into the real estate asset class, securing the family succession and exploring the new regulatory environment to successfully adapt to transparent family governance structures.
The Investment Network - marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.
Please note that the Summit is a closed business event and the number of participants strictly limited.
About marcus evans Summits
marcus evans Summits are high level business forums for the world's leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, case studies, roundtables and one-to-one business meetings. For more information, please visit www.marcusevans.com
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