By Charlotte Filsell – Head of Client Relationship Management at Sandaire.

In many industries no two clients are the same. In Family Offices this is particularly evident. Every family, and every individual within that family, is entirely unique and is continually growing, evolving and shifting their needs and priorities.

This is a fascinating and complex journey to help families navigate. Where this is especially pertinent, is finding the delicate balance between financial returns and social good. As such, it’s incredibly important that families have access to delicate guidance and careful stewardship, so they can find the right balance to match both their values and their long-term needs – and to match their individual and familial priorities.

As families navigate a generational wealth transfer to the younger generations, social good and impact investing becomes more apparent. There is undoubtedly an increasing trend from the younger generation, to go beyond a simple financial transaction or donation to worthy causes. When it comes to using their wealth, millennials tend to be more concerned about making their money go further, making a larger impact, and are interested in finding sustainable interventions and solutions. Differences certainly exist across generations, but what unites family members, is the motivation to make the world a better place.

In philanthropy, this can be reflected in a desire to learn about an issue and understand the nuances in order to direct effort and resources as effectively as possible. To achieve this effectively, it’s crucial to work closely with clients to assist with their philanthropic endeavours, including helping to find causes that are important to them and guiding on how they might be able to make a positive contribution. In addition to this, connecting clients to other families in the same situation, or perhaps further along the philanthropy journey, allows them to share ideas and experiences, and apply these to their own particular investment desires.

In no small part because this is such a personal yet complex issue, families are increasingly looking for advisers who not only understand the intricacies of the financial and investment landscape, but who have a thorough grasp on the values and philanthropic intentions of the client. This can make a huge difference. It’s incredibly important to provide thoughtful guidance and careful stewardship to help families strike the right balance. This can take many forms – an effective family office must shift with the needs of the families it serves and take on the role that’s required – whether that’s a leader, a partner, a facilitator, or a mediator.

The trend towards Socially Responsible Investment (SRI) has led to the integration of environmental, social and governance (ESG) factors into investment decisions. The development of SRI and impact investment is offering the prospect of achieving returns measured in more than merely financial terms; it is embedding values and responsibility into investment decisions. While many businesses may have long been delivering more than financial returns, social and impact investing is bringing intention to the fore in investment selection and outcome measurement into the evaluation of success.

The crucial role of the family office is to help steer the families we serve through this fascinating and complex process, developing a successful wealth plan that futureproofs their wealth, whilst satisfying their philanthropic interests and passions. Although a fragile line, we believe that a portfolio can satisfy both financial return objectives and positive social impact that reflects a client’s personal values, acknowledging that a balance will need to be struck depending on the needs of each individual client.  

Posted by Mohammed Junaid