Crack prevention

Ensuring the longevity of family offices

Inter-generational differences

Avoid the pitfall in which older generations wielding authority clash with younger family members who have adopted new ideas and management styles, such as digitalisation and/or the hiring of external professionals to run the family office, advises VP Bank’s Fung. Citi’s Ong adds that with increased financial complexity and as the size of the family grows, members may have differing views on the type of assets to invest in. It would be useful to create investment committees within the family office to ensure that family members are aligned.

Neglected objectives

In an SFO, the objectives should align with the interests of the family. However, there is often no segregation between family and business, resulting in the SFO focusing on investment returns and overlooking the familyoriented objectives of philanthropic causes, and/or legacy and succession planning, cautions Fung.

Fair incentive

Incentives and compensation also have to be considered carefully for family members and when hiring outsiders, notes Ong.

Plan for the long term

According to Ong, as Asian wealth creation has been accelerated especially in the Asian Chinese tech space, family office planning has so far generally been short-term vs global best practice. To succeed, one must think in a multi-generational time frame, and even contemplate the next several decades.