According to family office experts at a recent roundtable, emotional intelligence is a key attribute for trusted advisers
Having empathy and understanding for the difficulties faced by wealthy families is just as important as market knowledge, industry experts told Spear’s 500 Live in association with The OWO Residences by Raffles.
Trust experts, private wealth managers and family office professionals joined a roundtable discussion at the Carlton Tower Jumeirah event to discuss a wide range of issues surrounding family wealth.
Entitled ‘Family Offices and Trustees: Marriage made in heaven?’, the event was sponsored by investor services group IQ-EQ and conducted under the Chatham House rule.
The in-depth discussions highlighted the need for emotional intelligence among advisers when it comes to planning the complicated affairs of their clients.
‘During our round table it was striking that the entire group focused on the need for fantastic interpersonal skills and EQ,’ said Alex Dean, IQ-EQ’s head of private wealth UK.
For IQ-EQ, having an ‘emotional quotient’ is just as important as having a high IQ.
‘As such, we were able to conclude that whilst technical capabilities are critical in servicing UHNW families, EQ is as important due to the complex combination of wealth and evolving families.’
Additionally, the family office experts discussed how threats to the sustainability of family wealth are often external to the family.
These threats underscored the importance of offering trusted advice for younger generations in a family business, particularly when the primary wealth generator is no longer able to oversee business affairs, roundtable members noted.
As family offices have become increasingly global institutions, with family members often across different jurisdictions and investments across different asset classes, those at the roundtable also observed how single family offices were becoming more professional in their operations.
Umbrella vehicles – most commonly trusts – are now often used by family offices to provide a cohesive framework for highly-dispersed financial affairs. Family office professionals noted the importance of trustees in supporting these vehicles, with in-depth discussions around how family offices and trustees can work together effectively to support wealthy families.
One key challenge discussed was engaging a family when there are multiple advisers working within family offices and supporting trusts. Sometimes, the figure seen by family members as the ‘trusted adviser’ can change between generations.
Other themes touched on by the family office professionals were how the average age of HNWs is dropping, founders’ offices for entrepreneurs are increasing, and there are unique challenges around how to incubate the wealth they generate.
As founders’ offices have grown more common to support first-generation wealth creators, roundtable members discussed the challenges around how to best protect and incubate their new-found wealth.