Family Office Feature: In Conversation with Amira Shaker-Bortman

Professionalising family offices and the evolving expectations on trusted advisers

In conversation with Amira Shaker-Bortman, Partner at Charles Russell Speechlys LLP, our UK Director, Robert Moore, discusses the changes in the family office space.

As families become more internationally mobile, multi-generational and diverse, there is growing momentum towards professionalising family offices. This evolution reflects not only a response to regulatory and compliance pressures, but also a proactive shift towards robust governance, enhanced risk management and institutional-grade infrastructure.

How have family offices evolved in recent years and what are the key drivers behind this professionalisation?

Family offices have evolved significantly, transitioning from informal to highly structured entities. This professionalisation is driven by several factors, including the increasing complexity of global financial markets, the need for robust risk management strategies and the desire for greater operational efficiency, particularly when the family in question is a global, multi-generational family with assets in multiple jurisdictions.

This is particularly true of Middle Eastern family businesses who we have seen (and helped) migrate from informal to appropriately professional and highly governed structures. Generally speaking, as families grow and diversify, there is a heightened need for sophisticated governance structures to manage assets across generations and across various jurisdictions. Regulatory changes and the demand for transparency have also necessitated a more professional approach to managing family wealth.

How do governance and compliance expectations differ between first generation family offices and multi-generational ones?

First generation family offices often focus on establishing foundational governance structures and may prioritise flexibility to accommodate the founder’s vision. Compliance might be less formalised, with a focus on personal relationships and trust. By contrast, multi-generational family offices typically have more complex governance frameworks to address the diverse interests of various family members. Compliance expectations are higher, often requiring formal policies and procedures to ensure alignment with regulatory standards and family values. These offices also prefer to employ independent directors or advisers to provide objective oversight.

How have the expectations of high-net worth individuals (HNWIs) and family offices changed when it comes to their legal and tax advisers, have new skill sets or specialisations been required to meet these evolving needs?

Having acted as legal advisers for many HNWIs and PEP UHNWIs and their family offices for many years, we can say that the expectation from legal and tax advisers has significantly expanded.

In a way, there is a steady reversion to the traditional ‘trusted adviser’ role that was attributed to lawyers in the past. Legal and tax advisers are now required to be opine and direct their clients towards best-in-class service providers in many disciplines that are often beyond the legal and tax traditional area of expertise. International tax planning, advising on investments of personal wealth and management of digital assets are growing ever more as areas of requisite expertise within the family office realm.

There is also a steady growing demand for advisers who can navigate complex regulatory environments and provide strategic advice on geopolitical risks and considerations.

What legal challenges arise when structuring governance frameworks to balance family control with professional management?

One of the most important characteristics of a successful governance framework for family offices is its ability to effectively deal with legal challenges that arise when balancing family control and professional management.

A family office governance framework must be structured to respect the family’s values and vision while allowing for effective decision-making by professional managers. Legal challenges usually appear when there is no clear indication of roles and responsibilities or when no proper conflict resolution mechanisms are embedded in the framework.

Structuring governance frameworks that are adaptable to changing family dynamics and external pressures is crucial. Legal challenges can also arise from disagreements over asset ownership, inheritance, or the actions of family office management.

What role does technology play in the professionalisation of family offices, particularly in compliance and risk management?

Technology plays a pivotal role in the professionalisation of family offices by enhancing efficiency, transparency and security. Advanced software solutions facilitate real-time reporting, data analytics and risk assessment, enabling family offices to make informed decisions.

We’re seeing family offices move towards purchasing high-end cyber security solutions (that were typically reserved for conglomerates or multinational corporations) to protect their data as well as pay for subscriptions to help them track regulatory changes and ensure adherence to legal requirements in the many jurisdictions where the asset base is located. These can be significant investments but are increasingly seen by family offices as essential for their safe and proper functioning.

How do you see the role of advisers evolving in family office advisory over the next decade?

Advisers will likely take on a more strategic and holistic role in family office advisory realms. They will be expected to integrate financial expertise with insights into family dynamics, philanthropy and sustainability. They will need be agile, adapting to rapid technological advancements and shifting regulatory landscapes. Their role will expand to include facilitating intergenerational dialogue and succession planning, ensuring that family offices remain resilient and aligned with their long-term goals.