“Wealth preservation is not just about investment management,” says Eva Law, Founder & Chairman, Association of Family Offices in Asia. “A lot of times it is other factors that cause a family to fall and not investment loss,” she believes.

Law is a speaker at the marcus evans Private Wealth Management APAC Summit 2018, taking place in Macao, 16 - 18 April.

How can family offices build a shared vision for the family fortune? 

Communication between the shareholders, top management and the board of directors plays a key role. Well structured families have a family council or assembly, where thoughtful discussions can take place between all parties.

Meaningful dialogues, willingness to understand and accept or even consider other family members’ ideas is vital in relationship upkeep, liberty of thought and action, etc. All of these are key elements that contribute to binding the family together. They also support the creation of common visions and elevate shared values. With shared visions and cohesion, the family has its vibrant force pursuing success and legacy. 

What does a robust family governance framework entail?

Apart from the soft-elements, some conventional tools are frequently deployed in managing family governance.

Firstly, regular family assemblies are needed, so all members have a choice to talk. The family council meetings will also provide training and create policies on generating consensus on strategic and important agendas, finalising decisions and managing family wealth and assets.  

Secondly, the family constitution should be set. This is very basic but critical, as it is about the vision and values that will regulate every family member’s relationship with the business. It can be short or long, simple or detailed depending on what the family prefers, but I believe every family will benefit from having such a mission statement.

What would help ensure the family philosophy is mirrored in the investment strategy?

No matter if the family investment is managed externally or internally, the family needs to communicate what it wants and its specific constraints and requirements. For example, if it wants to get involved in impact or ESG investing, it should discuss with the investing team the appropriate screening it needs to do. The other critical strategy is to ensure proper monitoring. The family should review performance of the managers and monitor whether the managers followed the investment guidelines that were fixed in the mandates.

How can they ensure the family philosophy passes on to the next generation?

The CEO of the family office and/or the senior and respected person within the family usually arranges ongoing meetings with the patriarch, the next generation and key stakeholders to discuss the business ownership, investment preferences and requirements, and other family issues. The crux of success is effective communication among all stakeholders and keeping the whole family informed.

Having the family reach a consensus decision is an art. Very difficult but important for harmony in the family. The next generation needs to really understand the patriarch’s expectations on how to run and grow the business, and manage the family wealth.

What are the main causes of family conflicts and how can they be avoided?

There are so many different reasons, it depends on the family. It can be about different values or management style. The first generation may be too controlling. There could be many people with varied interests involved. Also, members always have diverse views on investment and divesture, some members may want to sell an asset while others do not want to.

Finally, what do you consider absolutely critical for asset preservation?

There are two main areas to think about. One is about managing the investment, as wealth loss may be due to excessive risks being taken. A lot of times it is other factors that cause a family to fall and not investment loss. The entire wealth can disappear because of fighting and/or failure of the family business. To preserve wealth, families need to consider what may cause potential loss that does not stem from investment loss. They need to have the know-how, legal counsel and a wealth preservation strategy. Setting a family trust or foundation to build a firewall between family and business assets is recommended for safeguarding the family’s wealth.  

• Chairman, Angelo Ho Family Office
• Company Director, Australia Pacific Group
• Chairman, Black Swan Capital
• CEO, Crown Family Office
• Executive Director, CS Partners
• CEO, Deauville Private Office
• MD, Guggenheim Partners
• Partner, IAM Legacy Family Office
• Group CEO & Founder, Oscar Wealth Advisory
• CEO, Wynnes Family Office

    and more…

About the Private Wealth Management APAC Summit 2018

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, China, 16 - 18 April 2018, the Summit includes presentations on designing a flexible asset allocation model to deliver attractive long-term portfolio performance, engaging wealth holders across generations to empower stewardship amidst rapidly changing family dynamics, and embracing novel tech opportunities and keeping up with cross-industry innovation to rejoice portfolios.

• Sameer Mehta, Director & CIO, Atlas Family Office
• Ville Oehman, Cryptocurrency Fund Manager, Helvetic Investments
• Feisal Alibhai, Founder & CEO, Qineticare
• Ernest Miller, MD/Family Office Executive, Metis Growth Partners
• Noor Quek, Founder & CEO, NQ International
• Gina Fyffe, Executive Director, Integra Holdings
• Cheong Wing Kiat, Executive Director & Family Strategist, Business Concept; Executive Director, Wen Ken Group
• Bruce Merivale-Austin, Principal & MD, DM Partners Asia

     and more...