Wealthy families and successful entrepreneurs share a similar concern. They aim at ensuring their wealth is being taken care of by professionals looking at identifying investments able to deliver sustained return from a diversified portfolio over the long term and across economic cycles.
The duty to achieve this goal often falls to their private bankers, who are specialized in designing investment strategy for their clients, leveraging the experts of the private banks across asset classes and sectors.
However, some families and entrepreneurs want to have a more active role in their investment portfolio. Some strive to execute direct acquisitions and manage a diversified portfolio of private companies. Others want to be more directly in charge of their investment portfolio’s strategies. These very wealthy individuals and families can then set-up a family office, staffed with fully dedicated investment professionals that will exclusively take care of managing their portfolio and executing transactions.
For most families, the key question is to understand when such an initiative is necessary. Fundamentally, it is a decision that depends on the volume of assets under management and the ambitions the family may have to become more involved into the management of its wealth. If the family wants to adopt a light touch approach to wealth management and fundamentally ensure its wealth is being invested in a diversified portfolio with long-term return horizon, a family office may not be necessary. By contrast, if the family desires to become much more involved in its portfolio of investments, including numerous private investments in real estate and in private corporations, a family office may be the right solution to help the family identify opportunities, execute transactions and manage the portfolio companies over the years.
Like many decisions taken by wealthy families and entrepreneurs, the establishment of a family office shall be analyzed and assessed carefully on multiple criteria including investment strategy, return ambitions and staffing for critical role within the family office.
In that context, private banks have put together teams aiming at providing the right advice to the wealth owner and to the family office managers.
Family offices and private bankers are not in competition, they thrive from their complementarity. After the establishment of a family office, the bilateral relationship between the wealth owner and the private banker will see a number of discussions involving the head of the family office.
Aiming at fostering this relationship between families, family offices and private bankers, BNP Paribas Wealth Management has established a dedicated team focused solely on its largest clients: the Key Client Group. Between this group and our Strategic Client team focused on family offices, over 120 dedicated senior bankers based across the globe, in most of the key geographies, aim at bringing the full array of the services from the BNP Paribas Group and be the partner of choice of their success.