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Managing family wealth: an interview with our Grandes Familles Internationales team
What are the key attributes of this group of clients that you support on a day-to-day basis?
Nicolas Chatillon: We work with family groups who, yes, have significant resources at their disposal, but who also face a greater-than-average level of complexity in managing their wealth. This complexity tends to result from a combination of factors:
- Size: the different generations of a family form an extended circle, with members often differing in their needs and challenges
- Geographical spread: the family members do not necessarily all live in the same country, so different jurisdictional rules apply
- Diversity of parties involved: these families generally work with many different advisors (lawyers, notaries, financial advisors, family offices, etc.), and we have to build good relationships with all of them
These characteristics have led us to develop specific expertise for large international families, taking a global, bespoke and long-term approach.
At what point should parents broach the topic of family wealth management with their children?
Nadine Mottu: It’s a vital step, but it’s not always clear when is the right time to take it. I find it touching when parents bring their children along when they come to start these discussions with us. Ultimately, I would say the timing of the decision comes down to your children’s disposition and personality. Some are highly responsible from a very young age, while others need to gain maturity before they can digest this information.
Nicolas Chatillon: The one thing to avoid is never bringing up the subject at all. That is what used to happen in a lot of families, which would sometimes result in misunderstandings or frustration, particularly when it came to the actual moment of succession. People are more open to talking about things these days. This greater transparency reflects how our society has changed.
Nadine Mottu: Parents are often afraid that disclosing this information will stop their children from fully taking charge of their own lives. They want them to have a career and demonstrate a certain level of responsibility before gaining access to the family fortune. There is a fine balance to be struck.
Nicolas Chatillon: Another pitfall is trying to make arrangements for handing on wealth with too rigid a timetable. That might mean creating a structure during your offspring’s early childhood, planning for when they turn 25 or 30. It’s better to base decisions on principles than to have a system that’s defined ahead of time. You never know what’s around the corner in life, be it a sudden death, a separation, a revision of tax law or a political change.
How can you keep communication flowing to avoid conflicts around wealth within a family?
Nadine Mottu: We recommend putting family governance in place as early as possible and maintaining dialogue with all the members of the family. Having this framework in place enables clear communication and, where necessary, a mechanism for resolving disagreements.
Of course, our job is not to settle conflicts within families. Nevertheless, our clients can depend on our discretion and neutrality. Our role is to build an enduring and trusting relationship. We seek to understand the family dynamic and to support all of its members.
Recognising that every family is unique, with its own story and many and varied needs, is what enables us to deliver a truly made-to-measure service – which is something that’s disappearing from the market.
What are the latest trends you’re seeing in relation to wealth management within families?
Nadine Mottu: I’m impressed by the level of education amongst younger generations. Their overall understanding of finance is much greater these days, and I have the impression that more and more children want to get involved in managing their family’s money.
Another big trend is mobility. Families weren’t previously as international as they are today and would tend to be more centred in one country. Today, the kids head off to study in all corners of the world, and sometimes they stay and spend part of their lives there.
I also find that many of these young people have a strong entrepreneurial mindset. There’s a growing desire either to take over the family business or to launch their own business and forge their own path.
Nicolas Chatillon: I would also add the question of values. Upcoming generations are very clear about the meaning they want to give to their money. Performance, of course, remains a hugely important consideration, but we’re also seeing that they have a real appetite to use the management of their wealth to defend what they believe in, particularly in terms of sustainability.
Read also: Entrepreneurs: 3 tips for selling or transferring your company in Switzerland
How can people use their wealth to create a solid base that brings their entire family together?
Nicolas Chatillon: It’s possible to establish vehicles that enable a family’s wealth to be managed as a whole – from both a legal and a tax perspective. We see this in particular when it comes to selling a family business. The distribution of proceeds between family members can be organised, but a significant share can still be held in common as an extension of the family business. Governance can be defined so that everyone can be involved in managing the family wealth in one way or another.
Nadine Mottu: We also support many of our clients in their philanthropic endeavours. Whether they choose to establish their own foundation supporting a cause close to the family’s heart or to do good works through Philanthropia – the umbrella foundation that’s home to Lombard Odier clients’ philanthropic projects and funds – this is an exciting journey that can bring the family closer together around a strong commitment. They want to preserve their wealth while also defending or promoting their values.
Nicolas Chatillon: Ownership of a large estate is also a family responsibility in itself. For all the wealthy families that we support, passing the assets that they inherited on to the next generation is one of their foremost objectives.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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