The event, which took place in February at Coutts’ London headquarters, and which formed the final instalment of a three-part series of events, explored the evolving family wealth advisory landscape in the 21st century.

Heather Tibbo, Group Head of Crestbridge FOS, spoke on a panel session at the event which highlighted the changing nature of family structuring, and examined the challenges and the steps advisers need to take to remain relevant. Heather was joined by Rachel Harrington, Executive Director at Coutts Family Office & Coutts Institute, who also moderated the first session, Georgina James, Partner at Farrer & Co, Catherine Grum, Head of Family Office Services at BDO, Alexander Erskine, Partner at Taylor Wessing, and Mark Stokes, Partner at Deloitte.

Among the topics discussed were the evolution of family structuring in an increasingly global and scrutinised environment, how to support greater communication and governance, and the importance of setting down shared values for harmony across the generations.

Commenting on the session, Heather said: “What’s clear is that family clients now are far more complex and sophisticated – they are multijurisdictional, multigenerational and engaged in multi-asset strategies. All this has implications for structuring and serves to underline the importance of good governance within family frameworks and communication.

“It also reinforces the appeal of structures that are as simple and as efficient as possible – housed in jurisdictions that can demonstrate excellent standards and delivered by institutions that can offer premium service quality.”

In addition, Daniel Channing, Director at Crestbridge FOS, participated in a session that explored the shifting demands and expectations of the NextGen within family structures. Moderated by Coutts Family Office and Institute Director Stuart May, this also featured expert speakers including Charlotte Matthews, Senior Associate at Taylor Wessing, Alex Fish, Associate Director at BDO, Chris Cook, Senior Associate at Baker Mackenzie, Lucy Lukic, Associate Director at Deloitte and Stefan Le Marquand, Manager at Highvern.

Pointing to the need for greater transparency within families and the challenges created by increased information flow between generations and family members, this session emphasised the need for tailored service in building lasting relationships with families. Daniel added:

“Catering to the individual needs of clients has always been about tailoring service, knowledge and structures – and the rising importance of the NextGen within family structures has exacerbated that. Listening to all stakeholders, including the NextGen, is critical in building trust, whilst being able to adapt quickly and seamlessly as the needs of families change, is vital in today’s environment.

Q: Why is it particularly important to be proactive in reviewing family structures at the current time?

Daniel Channing (DC): Fundamentally it is always a useful exercise periodically to review structures. This is because, by their very nature, a family’s circumstances and requirements evolve.

However there is currently a heightened sensitivity to political tensions, geopolitical instability, and inflationary pressures, as well as greater public scrutiny. Families, who were already becoming more sophisticated and multijurisdictional in their outlook and behaviours, need to navigate through it and find clarity in what is a complex environment.

For this reason I feel that right now is an unprecedented opportunity for family advisers to demonstrate their capabilities and ensure their clients are comfortable and prepared for the future. Being proactive now – reviewing existing structures and documents, revisiting family values – could really help families focus on their future direction, and future-proof their strategies.

Q: Does this indicate a different approach to what family office advisers have done in the past?

DC: It feels like this new context is a bit different. Families have faced pressures, challenges, and crises in the past. However a generally increased sophistication within a family’s understanding of their structuring, and what it truly seeks to achieve, is focusing minds at the moment. There are two major drivers behind this – a greater focus now on sustainability, and acceleration of digital adoption. Both are evolving constantly and at increasing speed.

For some families this is exciting, revealing new possibilities that they are keen to embrace and explore. For others, though, it’s really challenging, and is questioning their traditional values and disrupting business as usual.

Our ethos remains to work as an extension of our clients’ teams. But this new context gives us added impetus and rationale to be proactive in ensuring every aspect of their structure, model and approach is future-proof.

Q: So what does this mean in practice?

DC: It’s a bit of a cliché, but it’s true that all families are different, and advisers have always needed to adapt to make sure they are able to give independent advice tailored to the individual, and to their circumstances.

It’s the greater complexity of the environment families are now operating in, and the pace of change within that environment, that means that being proactive, and not waiting until the next challenge comes around, is so important. Ultimately, what families want is certainty.

We’ve seen this in several ways in recent months – from working with families to enable them to address specific challenges to managing the migration of decision-making to the next generation.

Governance and oversight is a key area where families are looking for greater support as they gear up for the future. The regulatory, reporting and disclosure requirements families now face are a million miles from where they were just five years ago, and they’ve needed to ramp up expertise quickly. Getting expert advice to inform that journey is vital.

Q: Can you give any examples of how the team has been proactive?

DC: We’ve seen a definite trend towards looking carefully at succession planning and instilling a robust governance framework, but in our experience, families don’t want that to be at the expense of maintaining an element of flexibility for the future. They still want their structures to be able to accommodate future shifts in investment and succession strategies.

In some cases, that’s required the team to take on a more project management role – working hard to make sure governance protocols are watertight, but maintaining a close relationship with the family office
team to develop further governance frameworks as structures have evolved and a family’s desire has shifted to institutionalise their portfolio.

In one case, the team established a new regulated advisory firm in another jurisdiction and relocated part of the local office to achieve the aim. That included providing support around IT and operations, so a really holistic team-based approach.

Q: Why is it particularly important to be proactive in reviewing family structures at the current time?

Daniel Channing (DC): Fundamentally it is always a useful exercise periodically to review structures. This is because, by their very nature, a family’s circumstances and requirements evolve.

However there is currently a heightened sensitivity to political tensions, geopolitical instability, and inflationary pressures, as well as greater public scrutiny. Families, who were already becoming more sophisticated and multijurisdictional in their outlook and behaviours, need to navigate through it and find clarity in what is a complex environment.

For this reason I feel that right now is an unprecedented opportunity for family advisers to demonstrate their capabilities and ensure their clients are comfortable and prepared for the future. Being proactive now – reviewing existing structures and documents, revisiting family values – could really help families focus on their future direction, and future-proof their strategies.

Q: Does this indicate a different approach to what family office advisers have done in the past?

DC: It feels like this new context is a bit different. Families have faced pressures, challenges, and crises in the past. However a generally increased sophistication within a family’s understanding of their structuring, and what it truly seeks to achieve, is focusing minds at the moment. There are two major drivers behind this – a greater focus now on sustainability, and acceleration of digital adoption. Both are evolving constantly and at increasing speed.

For some families this is exciting, revealing new possibilities that they are keen to embrace and explore. For others, though, it’s really challenging, and is questioning their traditional values and disrupting business as usual.

Our ethos remains to work as an extension of our clients’ teams. But this new context gives us added impetus and rationale to be proactive in ensuring every aspect of their structure, model and approach is future-proof.

Q: So what does this mean in practice?

DC: It’s a bit of a cliché, but it’s true that all families are different, and advisers have always needed to adapt to make sure they are able to give independent advice tailored to the individual, and to their circumstances.

It’s the greater complexity of the environment families are now operating in, and the pace of change within that environment, that means that being proactive, and not waiting until the next challenge comes around, is so important. Ultimately, what families want is certainty.

We’ve seen this in several ways in recent months – from working with families to enable them to address specific challenges to managing the migration of decision-making to the next generation.

Governance and oversight is a key area where families are looking for greater support as they gear up for the future. The regulatory, reporting and disclosure requirements families now face are a million miles from where they were just five years ago, and they’ve needed to ramp up expertise quickly. Getting expert advice to inform that journey is vital.

Q: Can you give any examples of how the team has been proactive?

DC: We’ve seen a definite trend towards looking carefully at succession planning and instilling a robust governance framework, but in our experience, families don’t want that to be at the expense of maintaining an element of flexibility for the future. They still want their structures to be able to accommodate future shifts in investment and succession strategies.

In some cases, that’s required the team to take on a more project management role – working hard to make sure governance protocols are watertight, but maintaining a close relationship with the family office
team to develop further governance frameworks as structures have evolved and a family’s desire has shifted to institutionalise their portfolio.

In one case, the team established a new regulated advisory firm in another jurisdiction and relocated part of the local office to achieve the aim. That included providing support around IT and operations, so a really holistic team-based approach.

In February this year, the Dubai International Finance Centre (DIFC) reported its highest ever annual revenue and operating profit.

Meanwhile, in Saudi Arabia, Riyadh is focused on morphing from an oil and gas powerhouse into a business, commerce and finance hub, with experts forecasting that Saudi Arabia will become the preeminent finance hub in the Middle East within the next three years.

On the ground

This is a strong indication that key hubs in the Middle East, such as the DIFC and Riyadh, are being successful in diversifying their proposition and setting out their stalls as global players in cross-border investment.

From an international service provider perspective, it’s long been the case that centres in the Middle East have been active in the private client and family office market – but this is now broadening with investors in the region looking for increasingly sophisticated support to enable them to achieve their global investment aspirations.

At the same time, investors and family offices elsewhere in the world are looking more and more at the cross-border structuring and professional support services available through Middle East hubs like the DIFC and Riyadh to support their international ambitions too.

As local, regional and global investors increasingly put their faith in these Middle East hubs, it is our responsibility as service providers with the experience and expertise in cross-border structuring to support that trend with the same quality service and knowledge that we have applied in other markets too.

It has certainly been the message from family offices that the Middle East market is incredibly busy. Our experience on the ground is that the DIFC and Riyadh are seen as a nexus for investment into key growth markets, specifically Africa and Asia – providing a route from North to South (the UK/Europe to Africa), and from West to East (the US to Asia).

As well as the geographical positioning that plays out well for this sort of structuring opportunity, it is the tax neutral environment they provide that also lends itself perfectly to straightforward collective investment structures – an area where we are seeing particular activity at the moment amongst family offices.

Private equity and venture capital type deals are areas of particular activity, with family offices globally still sitting on significant amounts of dry powder, waiting to be allocated to the right target and put to work. The message is clear, though – it has to be the right target.

Which is why having a tried and tested route to market that can enable them to react quickly when the right opportunity comes along is so important – and the hubs in the Middle East are rising to that challenge.

As well as providing good structuring, attractive tax environments and good mechanisms for upstream investment vehicles needing neutral ground, hubs in the region are significantly enhancing their governance and regulatory frameworks and investing heavily in their hard and soft infrastructures – bolstering their regional stock exchanges, for example, to support listed fund business.

This is where there is significant opportunity for offshore vehicles in supporting the evolution of these hubs. We frequently see, for example, Jersey structures being used to complement activity in the Middle East, whilst the experience in centres like Jersey have in governance and cross border regulation is hugely prized by families and complements the work being done by advisors in the Middle East too.

As hubs in the Middle East continue to evolve and transition at pace from domestic to international centres, IFCs like Jersey can play a positive and complementary role. The fact that Jersey has been visiting the Middle East region for many years, has had a presence in the UAE since 2011 and is ramping up its visibility in Saudi Arabia, puts it in a strong position to support this trend.

The future

Both the DIFC and Riyadh have hugely ambitious but highly achievable growth plans for the years ahead.

2021 saw the approval, for instance, of the DIFC’s Strategy 2030, a new strategy that reflects the DIFC’s role in supporting sustained economic growth. It embraces new legislation relating to the expanded duties and responsibilities of the DIFC and promotes the values of efficiency, transparency and integrity, whilst also placing a real emphasis on innovation.

In Saudi Arabia meanwhile, the Vision 2030 strategy sets out an equally ambitious growth plan, with an aim to rebalance its economy, diversify into new sectors, from financial services to high-end manufacturing, tourism, entertainment and culture.

It’s clear that the Middle East, in particular the UAE and Saudi Arabia, provides significant opportunities to support family office structuring and private market cross-border investment, and the pace of change over the coming years will undoubtedly accelerate.

As a result, there are collaborative opportunities for professionals in IFCs like Jersey who are familiar with the Middle East region and who have so much experience in cross border structuring, to support that growth and achieve mutually beneficial outcomes – for IFCs like Jersey, for those hubs in the Middle East, and of course clients.

In February this year, the Dubai International Finance Centre (DIFC) reported its highest ever annual revenue and operating profit.

Meanwhile, in Saudi Arabia, Riyadh is focused on morphing from an oil and gas powerhouse into a business, commerce and finance hub, with experts forecasting that Saudi Arabia will become the preeminent finance hub in the Middle East within the next three years.

On the ground

This is a strong indication that key hubs in the Middle East, such as the DIFC and Riyadh, are being successful in diversifying their proposition and setting out their stalls as global players in cross-border investment.

From an international service provider perspective, it’s long been the case that centres in the Middle East have been active in the private client and family office market – but this is now broadening with investors in the region looking for increasingly sophisticated support to enable them to achieve their global investment aspirations.

At the same time, investors and family offices elsewhere in the world are looking more and more at the cross-border structuring and professional support services available through Middle East hubs like the DIFC and Riyadh to support their international ambitions too.

As local, regional and global investors increasingly put their faith in these Middle East hubs, it is our responsibility as service providers with the experience and expertise in cross-border structuring to support that trend with the same quality service and knowledge that we have applied in other markets too.

It has certainly been the message from family offices that the Middle East market is incredibly busy. Our experience on the ground is that the DIFC and Riyadh are seen as a nexus for investment into key growth markets, specifically Africa and Asia – providing a route from North to South (the UK/Europe to Africa), and from West to East (the US to Asia).

As well as the geographical positioning that plays out well for this sort of structuring opportunity, it is the tax neutral environment they provide that also lends itself perfectly to straightforward collective investment structures – an area where we are seeing particular activity at the moment amongst family offices.

Private equity and venture capital type deals are areas of particular activity, with family offices globally still sitting on significant amounts of dry powder, waiting to be allocated to the right target and put to work. The message is clear, though – it has to be the right target.

Which is why having a tried and tested route to market that can enable them to react quickly when the right opportunity comes along is so important – and the hubs in the Middle East are rising to that challenge.

As well as providing good structuring, attractive tax environments and good mechanisms for upstream investment vehicles needing neutral ground, hubs in the region are significantly enhancing their governance and regulatory frameworks and investing heavily in their hard and soft infrastructures – bolstering their regional stock exchanges, for example, to support listed fund business.

This is where there is significant opportunity for offshore vehicles in supporting the evolution of these hubs. We frequently see, for example, Jersey structures being used to complement activity in the Middle East, whilst the experience in centres like Jersey have in governance and cross border regulation is hugely prized by families and complements the work being done by advisors in the Middle East too.

As hubs in the Middle East continue to evolve and transition at pace from domestic to international centres, IFCs like Jersey can play a positive and complementary role. The fact that Jersey has been visiting the Middle East region for many years, has had a presence in the UAE since 2011 and is ramping up its visibility in Saudi Arabia, puts it in a strong position to support this trend.

The future

Both the DIFC and Riyadh have hugely ambitious but highly achievable growth plans for the years ahead.

2021 saw the approval, for instance, of the DIFC’s Strategy 2030, a new strategy that reflects the DIFC’s role in supporting sustained economic growth. It embraces new legislation relating to the expanded duties and responsibilities of the DIFC and promotes the values of efficiency, transparency and integrity, whilst also placing a real emphasis on innovation.

In Saudi Arabia meanwhile, the Vision 2030 strategy sets out an equally ambitious growth plan, with an aim to rebalance its economy, diversify into new sectors, from financial services to high-end manufacturing, tourism, entertainment and culture.

It’s clear that the Middle East, in particular the UAE and Saudi Arabia, provides significant opportunities to support family office structuring and private market cross-border investment, and the pace of change over the coming years will undoubtedly accelerate.

As a result, there are collaborative opportunities for professionals in IFCs like Jersey who are familiar with the Middle East region and who have so much experience in cross border structuring, to support that growth and achieve mutually beneficial outcomes – for IFCs like Jersey, for those hubs in the Middle East, and of course clients.

A member of the Crestbridge executive team, Heather also manages the US joint venture, Crestbridge Fiduciary LLC.  One of the most awarded executives in Jersey’s financial sector, Heather is a consistent feature on ePrivateclient’s Top 50 Most Influential list and in 2021 topped the Women in Wealth Management category in the WealthBriefing European Awards.

As Group Head of a professional services organisation, emphasising the importance of building trusted relationships is central to Heather’s leadership philosophy.  She vigorously encourages joined-up and far-sighted thinking throughout her team and promotes regular and open feedback from across the business to nurture a supportive and high-performance culture.

Who has inspired you?

Leading international private client lawyer Richard Hay taught me many important lessons; one of the key ones was that preparation is everything!

I recently read Edith Edgar’s ‘The Choice’.  It tells the true story of an Auschwitz survivor who trained to be a psychiatrist and is a study of resilience and self-determination. Her ethos is that everyone has the choice whether to be a victim or a survivor.

How would you describe your leadership style in three words?

Collaborative, supportive, open.

What makes a successful leader?

Empathy.  I believe in every scenario it is essential to put yourself in the shoes of the person or team you are working with or leading.

What advice would you give to aspiring leaders?

Follow your gut instincts, treat everything as an opportunity to learn and don’t let ‘perfect’ obstruct progress.  Things sometimes go wrong.  When they do, rise, reflect and move forward.

A member of the Crestbridge executive team, Heather also manages the US joint venture, Crestbridge Fiduciary LLC.  One of the most awarded executives in Jersey’s financial sector, Heather is a consistent feature on ePrivateclient’s Top 50 Most Influential list and in 2021 topped the Women in Wealth Management category in the WealthBriefing European Awards.

As Group Head of a professional services organisation, emphasising the importance of building trusted relationships is central to Heather’s leadership philosophy.  She vigorously encourages joined-up and far-sighted thinking throughout her team and promotes regular and open feedback from across the business to nurture a supportive and high-performance culture.

Who has inspired you?

Leading international private client lawyer Richard Hay taught me many important lessons; one of the key ones was that preparation is everything!

I recently read Edith Edgar’s ‘The Choice’.  It tells the true story of an Auschwitz survivor who trained to be a psychiatrist and is a study of resilience and self-determination. Her ethos is that everyone has the choice whether to be a victim or a survivor.

How would you describe your leadership style in three words?

Collaborative, supportive, open.

What makes a successful leader?

Empathy.  I believe in every scenario it is essential to put yourself in the shoes of the person or team you are working with or leading.

What advice would you give to aspiring leaders?

Follow your gut instincts, treat everything as an opportunity to learn and don’t let ‘perfect’ obstruct progress.  Things sometimes go wrong.  When they do, rise, reflect and move forward.

The makeup of today’s high net worth families has changed considerably compared to that of previous generations. Larger family units, consisting of multiple branches all differing in ages, in multiple jurisdictions and pursuing multiple interest, creates significant challenges particularly when varying perspectives, visions and objectives collide.

Consequently, a focus on operating cohesively and seeking collective agreement prior to making decisions has become paramount. In addition, there has been a rise in developing multiple, concurrent investment and wealth planning paths to satisfy differing objectives.

As a result – and as recent discussions at Jersey Finance’s Dubai conference showed – the nextgen is increasingly seeking to incorporate robust governance into the management of a family’s collective wealth and business interests, with a view to providing a supportive framework to help the interplay of these often complex family dynamics. This is a trend that is playing out particularly strongly in the Middle East, where the values and visions of previous generations can be juxtaposed with the rapidly evolving ambitions and values of the nextgen.

Making their own way in the world

The nextgen forging their own path and fulfilling the expectations and obligations of the previous generation can be a significant challenge. Key decisions include; the right time to assume control of the family’s wealth from the first generation; how to fully assert control and what direction to take in relation to management and custodianship of the wealth.

The above can include a desire to establish their own career independently or in tandem with the inherited wealth.  Assuming responsibility can often come with a greater focus on exercising personal vision, albeit balanced against any commitment towards the previous generation.

Defining this personal vision is a key first step. This is frequently followed by implementing a framework, often using a tested structure, to help implement a new vision alongside that of the previous generation. Such a framework can also help to manage potential conflict between the new approach and the existing one.

A final challenge can be seen when a nextgen individual, reluctant to take stewardship of wealth from the previous generation, is prematurely forced to do so. In these circumstances, it is critical that a structure with the appropriate framework exists to help and support them.

Beyond the nextgen

What’s clear is that families with a Middle East nexus are increasingly complex and sophisticated, and while larger families with diversified interests present significant challenges for family office practitioners, they also create opportunities.

For families themselves, having conversations early to establish internal frameworks and networks of trusted advisors is critical.

At the same time, for service providers and the IFCs that house them, taking a digital-first approach, understanding the need for multi-platform communication demands, and providing access to specialist, tailored expertise will be vital if they are to continue to support and anticipate the rapidly changing needs of the Middle East nextgen and beyond.

This article was first published on theWealthNet click here.