Before jumping into family office planning, let’s take a little trip down memory lane – we started 2020 under normal circumstances in North America, and if the vaccine roll-outs and people cooperate, we may end 2021 under some sense of normalcy in North America.  

To be honest, less than 24 months is a mere blip on the timeline of history. Averaged out over hundreds of years, the financial and social effects, one would assume, will flatten any curve that we have witnessed in the Covid-era. 

However, concepts and ideas have, and will, change. We have kicked the can down the road for years on matters of social unrest, environmental decline, continued polarity of wealth between the ‘classes’ and we may be, in fact, witnessing what may be the beginning of the end of our what we once knew as the middle class. All of this will continue to shape economic, political and social policy for years, even decades, to come.  Once a luxury and tool of the uber wealthy (yes, uber has another meaning for anyone over 30!), the Family Office is being reshaped by the massive wealth creation and accumulation since the Great Recession. Social and philanthropic desires of many who have now chosen to ‘make a difference’ rather than perpetuate the “moral and family checklists” many of us grew up adhering to continues to expand.

I reiterate – What does the above mean to the Family Office as we know it?

Gone are the days when you would not (or could not) consider a family office-type environment with less than $50M. Today, between technology and a myriad of service offerings, we are seeing families with wealth of $5M relying on Family Office services to help them achieve financial, social and philanthropic goals through fully-integrated planning – taxation, charitable foundation creation, wealth management, insurance management, paying bills and banking, etc…to allow them to pursue other avenues and objectives. The costs of having someone manage their financial affairs no longer outweighs the benefits of added time to pursue social, philanthropic and personal goals.

Here are some trends to watch for in the coming 12 to 24 months In Family Office planning:

1. Wealth creation – the sheer volume of financial wealth created since we emerged from the Great Recession over a decade ago has provided unimagined wealth for many families, and certainly padded the coffers of those who were already wealthy – more money to do more with – what we call allocation of resources!
2. Increased taxation – after massive government social stimuli and financial stabilizers, someone will have to “pay the piper” to help pay down the debt, deficit and relocated social spending that started in April 2020 and will continue through the end of 2021. The sheer magnitude will necessitate massive tax grabs in coming years – through income tax, tax on the wealthy, consumption taxes, etc… While our governments have putting funds in many people’s pockets during the pandemic, you can be sure they will have no choice but to reach into someone else’s pocket to help rebuild the coffers.
3. Philanthropy and social purpose – locked up for 15-18 months gives a person time to think – and many have. While not returning to the “rat race” may not be an option for many, those that have accumulated wealth, especially the Millennials who already had a preponderance for “purpose and social change”, will likely find a way to reduce “work hours” by working from home more in a hybrid world, so that they have more time to make a difference.
4. Cybersecurity and technology – with increased work from home and mobile technologies comes the heightening reality of increased cyberattacks, hacking and ransomware. Money will need to be invested in network and individual security and people will need to understand how to protect themselves – we have taught people to lock their door when they leave the house, and understanding the same security for technology must be as common as locking your door… All it takes is for ONE family member to leave a door or window unlocked…well, you get my point.
5. Impact investing or socially conscious investing – along with wanting to spend more time being philanthropic and/or creating family foundation will come the active strategies – not an afterthought but a deciding factor – in investing in companies with social, environmental and equality objectives as their social and financial goals.
6. Measuring success – while this sounds simple to the more traditionally capitalistic crowd, this is a huge area that employers and employees are struggling over. In the war for talent, bottom line (aka financial) success is being challenged by another measurement of success – social, environment and equality awareness and fairness. Now there’s a balance sheet that may be hard balance! While I stay away from opining on the above 6 “hot topics”, we cannot ignore their place and impact in today’s society…and our Family Offices.

Do you have questions about our Family Office services? Please do not hesitate to contact our team.