WM issue 5

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rewards around their investments. The increase in transaction volumes
and values, along with new ways of investing such as club deals, appears to
be aligned with the overall strategy of families, which focuses on growth.
In the PwC Global Next Gen Survey of 2022, 65% of respondents noted
that growth is a top priority.
• Asset planning and protection: We provide a tax and legal analysis and
help the family comprehend the tax and legal implications of their situation.
We support them in deciding their next steps based on their specific
objectives. Does the family have assets and businesses in multiple jurisdictions?
Where are the family members located? Is an exit plan required?
Is there a need for additional arrangements? Could they benefit from the
creation of more stable structures (i.e. Trust, Foundation, Company Limited
by Guarantee, Fund)? Are there jurisdictions that are more suitable
than others for establishing such structures?
• Planning for the day after: The day after is often too much to think
about. However, with our vast experience and ability to connect, we can
help remove this burden to enable our clients and their families to feel in
control. What plans need to be implemented to deal with these eventualities?
If a plan is already in place, the family may benefit from setting up a
mechanism for its regular revision.
• Leadership succession planning: We encourage families to prepare an
integrated succession plan, which may include preparing the next generation
of family leaders or non-family leaders from early on, long before the
business leader retires and passes on control. The family’s younger members
need to become stewards of the family wealth but, in order to do so,
they need to understand how the family created its wealth and how capital
moves within the systems that were created by the older generations. We
help them become good stewards, even if they decide not to take an active
role in managing the family business and its wealth. Among other things,
we help clients decide which key positions will need to be taken up by
employees outside the family and whether shareholding should be open to
non-family members.
• Philanthropy and impact investing: It is important to have a clear
strategic plan – covering the family, its businesses and the Family Office in
relation to ESG, philanthropy and impact investing, and philanthropic entities
in place – to help the family meet its goals. How can the family give
back to society and become more socially responsible, whilst sustaining its
legacy and achieving its growth targets?
• Technology: We help the family tap into the benefits of technology, by
moving ahead with the digitization and process automation of its family
office/business. How can the family ensure that its affairs are private and
confidential? How can the family share information related to its wealth, in
a timely and transparent manner among members and key associates (e.g.
trustees)?
Family governance
As family circumstances and wealth fundamentals become more complex,
it is important to establish the proper frameworks and processes to facilitate
the discussion of sensitive topics, such as ownership, rights and responsibilities,
information sharing, etc.
GONE ARE THE DAYS WHEN BUSINESS OWNERS ONLY
NEEDED A FAMILY WEALTH MANAGEMENT STRATEGY
TO MAP HOW THEIR PROPERTY AND ASSETS WOULD BE
DIVIDED AFTER THEY’RE GONE
Family governance comes in to help set boundaries, create clarity and facilitate
harmony among family members, even around sensitive topics and,
in parallel, to foster transparency and accountability. It is no exaggeration
to say that when intergenerational wealth transfers fail, this is often the
result of poor trust and communication and can result in catastrophe.
As such, it is imperative that each family carefully weighs its options and
chooses the governance mechanism that is best suited to its needs, opting
for simplicity and flexibility. At the same time, it is important to regularly
consider the strategy’s effectiveness, adjusting when necessary. Examples
include a set of Shared Values or Common Vision, Shareholders’
Agreements and the right Board Constitution for the Family Office/
private structures, conducting family meetings/retreats and establishing
policies for family employment/assessment, etc., but such a list is certainly
not exhaustive.
Cyprus: A preferred jurisdiction
for a second base
Setting up Family Offices has become common practice for family-owned
enterprises in the West, while in recent years it has been becoming increasingly
prominent in other parts of the world.
Just as every family is unique, no Family Office is the same as another.
However, no matter the size of the Family Office, it can evolve into a
powerful wealth planning platform, comprising contingency planning,
succession and estate planning and asset protection with one ultimate goal:
to support the growth and protection of family wealth across different
generations.
Cyprus is an increasingly popular jurisdiction, which can serve as a safe
and stable secondary home for families. Combining excellent education
and healthcare services, a cosmopolitan lifestyle, EU membership, a legal
framework based on the English Common Law system, a strategic location,
reasonable taxation and a wide double tax treaty network, investorand
business-friendly migration rules, it is an ideal secondary base for any
family. Moreover, it offers a wide array of options on succession planning
and asset protection structures (such as the Cyprus International Trust,
Cyprus Funds, Cyprus CLGs), and a high quality of professional services
at competitive rates, compared to other EU jurisdictions.
With more than 40 years of experience in supporting family businesses and
High Net Worth Individuals from around the globe, we understand that
a family’s business and wealth is its legacy. We support HNWIs looking
towards the future by helping them assess risks and eventualities, as well
as truly examining options from various angles, in order to provide them
with the confidence to take the best possible decisions for their family and
business. We bring to the table well-tested global tools and methodologies,
such as PwC’s Family Office Diagnostic Tool and the Wealth Compass,
which are two bespoke tools that we and our clients use as part of their
wealth planning and management.