Despite the pause that followed the Covid-19 pandemic, family offices can seize the opportunity and make the best of it by improving their critical systems and strengthening their organization.
Family offices spend years focusing on wealth management and creating investment strategies. However, this isn’t time to kick back and relax until everything goes back to normal. Consider this as the perfect opportunity to make those desperately needed evaluations and changes offered.
What It Means for A Family Office
It means carrying out a thorough analysis and evaluation of the core framework and making the necessary changes to help the organization thrive and capitalize on the arising opportunities after recovery from the pandemic.
The arrival of the Covid-19 may have brought stagnation to many businesses, but it presents the scope to perform practical tests and determine weak systems or processes. The management can replace or upgrade these systems or protocols with more competent choices that can benefit their family office.
Although Business Continuity Plans (BIP) face significant stress tests, family offices can use this opportunity to improve security, staff efficiency, and remote communication since the staff has to work from home.
However, cybersecurity and efficient infrastructure are crucial because communication, meetings, and documents are shared on the internet.
Although it’s easy to preserve family harmony during regular times, it can be challenging to do so at the time of a crisis, when failures need to be avoided and opportunities need to be seized as quickly as possible. Keeping this mind, consider adding an emergency protocol to obtain optimum results when in need of a quick response.
Plans, Strategies, and Outcomes
Creating an efficient wealth structure can be difficult, but legal experts such as tax advisors can make the process easier. Use this opportunity to organise family member’s portfolios and clearly define the line between their personal and family assets.
Wealth management and preservation are more than likely to the main focus in the upcoming months. The creation of a risk register can help understand potential liabilities before they become a threat, and an extensive record can keep track of possible risks for a business or individual.
As soon as the structure and plans are secure, the Covid-19 pause can unite family members on the two most significant issues, framing priorities for future investments, and succession planning.
Many families are buying more shares in stock to aid their businesses, while some are saving or investing in new opportunities and growing sectors. However, future investment strategies and a balance in the portfolio must be re-evaluated at shorter intervals because of the instability in the increasing and uncertain market.
On the other hand, succession planning can be quite distressing because many clients struggle with bringing up the topic of succession. However, it can improve the stakeholder’s confidence and sustain multi-generation legacies. Holding off on the conversation of succession leaves businesses unprepared and at risk should a retirement occur (which is entirely possible).
Choosing an heir or creating a leadership plan doesn’t conclude everything involved in future planning. It goes further than succession, and into areas such as being a philanthropist, entrepreneur, or involvement in technology and digital care.
Family offices can create future aspirations and improve better efficiency in the organization to meet those goals as soon as the crisis is over. Focusing on the current weak spots and making changes for the future will help them, not just in recovery but in finding success.