RECAP: 2019 FOX Wealth Advisor Forum

2019 FOX Wealth Advisor Forum - Recap


Helping Families Navigate Opportunities and Risks in Uncertain Times

Sara Hamilton, Founder and Chief Executive Officer, Family Office Exchange
Vincent Hayes, Director of Membership Development, Family Office Exchange

Session Description: 

Major disruptions to the normal course of business are heading our way, and enterprise families will be uniquely challenged by unforeseen risks and opportunities. As trusted advisors to ultra-wealthy families and enterprises, our industry needs to understand how to have effective conversations to prepare clients for these looming disruptions. To address these challenges, FOX embarked on its 2019 Opportunities and Risk Study. In this session, Sara Hamilton and Vincent Hayes offered insights from the study, including how to help families organize risk and tools advisors can utilize to get smarter when engaging in important risk conversations with families. 

"We are entering a new decade of unprecedented risk. Advisors can be crucial partners in helping families to manage risk and gain a sense of control."
- Sara Hamilton
Key Takeaways: 
  • The next decade requires managing the unexpected, from market disruptions, inequality and social unrest, to environmental issues, cyber-security threats, and geopolitical conflicts.  
  • Wealth owners respond to uncertainty in different ways. Business owners become concerned about industry disruptions, shareholders get nervous about dividend disruptions, family members feel differently about risk-taking, and entrepreneurs want to jump on new opportunities. Additionally, investors get worried about market volatility, parents are concerned about their children’s future, and philanthropists want assurances about the impact of their support for the community. 
  • We heard about three wealth owners with different considerations around risk and opportunity. 
    • Aging G1 wants to retire, but feels G2 is not interested or engaged in the family business. This situation often triggers a liquidity event. Important to build a “bridged management team” and to serve as risk manager – ask questions that will prepare them for future alternatives. 
    • The Patriarch/Matriarch won’t let go of the reigns and support the next generation to lead. Introduce them to others who have made it through the transition. Get sibling buy-in, develop and communicate a strategy that is credible. Good advisors can serve as a catalyst for change – plant the seeds. 
    • The family wants to focus on diversified opportunities given the risks in the core business. They want to co-invest with other families. Important to help them find people they trust – not every family makes a good partner. Get to know the clients’ definition of risk and risk-taking. Help families explore minority ownership – what it means to give up control.
  • Advisors play an important role in helping a family address risk. Help the family evaluate the seriousness and the impact of risks (doing an objective risk assessment) and provide perspective on what other families are doing to address the challenges. Advisors can offer a range of alternative strategies to mitigate risks and advise the board as they make key decisions.

(FOX Members only)