Romain Gerardin-Fresse - Southampton University

The Multi Family Office

EG: What fundamental measures do you think should be taken by elite families who want to manage their wealth through a Multi Family Office?
 

Romain Gerardin-Fresse: Wealth management is a task which requires different parameters of excellence. High profiles are well aware that managing their assets is a sensitive task. Before entrusting responsibility to a Family-Office, they must first ensure that it will be able to integrate all the paradigms that are specific to their personal situation.

According to their needs, their Family Office must be able to adapt their response. They must be able to reconcile their desire for yield, with the need to keep a share that can be mobilised at all times, to not only meet current obligations, but also unforeseen events that may arise.
 

The trap lies in a claim of profitability that is too high, which would expose their own funds in a reckless manner. The role of a Family-Office is to know how to advise and orient clients differently, if they realise that their wishes risk compromising the stability of their financial base. 

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EG: And which are some of the most successful examples of efficient
Multi Family Office wealth management? 

RGF: The best success is the longevity of a business relationship between a Family-office and its customers. Performing in the financial markets when all the indicators are looking good is quite simple. Taking advantage of the wave of general enthusiasm is within the reach of almost all asset managers.
 

As an indication, the mildness of the last 5 years, except perhaps 2018 which was more complicated, has enabled some funds or private banks to achieve average profitability for an intermediate profile which could reach 15%. But succeed in maintaining a positive rate of return in more critical or more difficult periods, in particular by the diversification of its investment supports and by the discovery of new outlets, such as equity investments in shared property programs in countries emerging or booming, with double-digit leverage, is a sign of intelligence and adaptability that remains one of the primary qualities of a Family-Office.
 

I insisted on the advisory nature of a relevant Family Office. Knowing how to stay the course and keep the bar, by convincing clients not to give in to the wind of panic that can blow on the financial markets and to limit the demobilisation of their assets positioned on sharply decreasing stocks, by integrating an educational dimension, is particularly important.

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EG: Clients of a multi family office typically have a net worth in excess of $50 million as bespoke services may be costly. What are the great advantages of operating a multi family office? 

RGF: Multi-Family office practices allow, unlike a specifically dedicated family, to spread the often important costs of having a team entirely dedicated to its service while at the same time being able to benefit from the same level of quality. The role of a Family-Office is to simplify the daily life of its customers. The tasks performed are numerous and are not limited to the simple management of their assets.
 

General administration, taxation, dispute resolution and handling current affairs are all tasks that must be accomplished with speed, efficiency and confidentiality. More than a business partner, the Family-Office is a confidant who must be present at all times when his client needs advice, guidance or must be helped in making an important decision.
 

A Multi-Family Office performs the same role as a Single, but with a load sometimes 20 times higher, because this level of attention and availability must be equivalent for each of its customers.

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EG: How would you describe the typical procedure when a single family office merges to become a large multi family office?
 

RGF: The most important thing when a Single Family-Office firm decides to become a Multi Family Office is to prepare for its extension.
 

As I said before, a Multi-Family Office performs the same role as a Single, but with a much higher load, because this level of attention and availability must be equivalent for all of its customers naturally expect the same level of excellence.
 

Also, a mistake would be to want to go too fast, and to deteriorate the quality of service provided by an overload of work that we would not be able to bear. Before integrating other clients into its structure, the Family-Office must make sure to recruit the right contacts, who share its work philosophy, and who maintain the same ”service oriented” culture.

The Right Structure 

EG How crucial is the notion of intergenerational wealth planning to the integrity of the family office structure?
 

RGF: One of the main pillars of the Family-Office is intergenerational wealth planning, since it concentrates all of its main principles: listening, advising, defining and applying a strategy. This can have different aspects.
 

Sometimes a historic customer who decides to make arrangements so that his children can continue to enjoy the fruit of his savings and his life of hard work, through specifically dedicated products, others who wish to anticipate ”the after” and organise their inheritance right now, or finally some who have just sold the company they created several decades ago, and wish to associate their children and grandchildren with the fruit of the sale.
 

EG: Talk about how some of the connections you have formed with private banks and management funds may benefit your clients? 
   

RGF: The recognition of our values and our reputation has enabled us to forge solid ties, with eminently prestigious players in the private banking and management funds sector. From Monaco to Luxembourg via London or Geneva, our firm has negotiated partnerships with the most historic and renowned financial centers.
 

EG: What are some of the greatest challenges you have come across in your capacity as political advisor and legal expert? 
 

RGF: First of all, we must remember the similarity between these two positions. You always have to be on the lookout for legal, social, environmental and geopolitical developments that can have a direct impact on those you advise. This is why I like to say that there is real continuity between the two professions / missions.
 

One of the biggest challenges is to defend a client from external aggressions that he may face, when these are unfounded or versatile.
 

Defending yourself against something concrete and the reverse of which can be proved is easy.

One of the worst nightmares for a public figure is to deny an unfounded and hyped public allegation.

Justice is a virtue sometimes complicated to impose, but which deserves to be vigorously defended. More generally, the biggest challenge is to constantly refine our updated knowledge of external evolutionary parameters, which are necessary in order to define a strategy that is perfectly effective, in record time, so that the impact is the most effective.
 

EG: Tell us about the importance of a family office having a holistic solution for reputational and crisis management with Gfk Conseils-Juridis? 
 

RGF: As I said, a Family Office fully integrates the concept of personalised advice and support, in all sensitive matters and in all stages of life where its clients may need their informed opinion. Certain public figures or large groups call on our firm, in particular to entrust it with the management of a crisis situation.
 

It can be a health scandal, a stir caused by the revelation of an embarrassing financial affair, or a more personal issue. We then have to deal with the cause and consequence of the problem.
 

In this, beyond solving the problem or the litigation itself, we are committed to preserving or repairing the image of our client who could suffer the ravages of the sensationalised media coverage in which our society evolves today. The crisis is the typical case for which we must act with quasi-surgical precision, in record time and whose global approach must be relevant and without pitfalls.
 

EG: What are some of the main differences in wealth planning strategies between multimillionaire and billionaire families? 

RGF: In terms of wealth management, the larger the financial surface, the higher the investment opportunities. The positions can be multiplied, and the investment martingales are available in larger numbers. In this, the gain is exponential to the share of assets invested.
 

There is a phrase from John Maynard Keynes that I like very much. He said that ”markets can stay irrational longer than you can stay solvent”. In this, the larger the investment base, the easier it is to protect assets according to a global strategy.
 

EG: You are considered as one of the 10 most influential and best legal experts in Europe have been several times awarded for your work. As legal experts, describe how you are best equipped to handle punitive changes in legislation that may negatively impact wealthy clients?
 

RGF: Legal expertise is the base, for me, of the Family-Office profession. Without extensive legal expertise, it is impossible to provide solid, effective advice and provide real protection to our clients.
 

EG: You are also philanthropists, donating 5% of annual profits to humanitarian organisations.  How important is it to give back to society? 

RGF: We have always placed moral values at the epicentre of our missions, and this has been the case since the beginning of the creation of GFK CONSEILS-JURIDIS.
 

We have committed to participate in the development of a caring economy, where profit is a source of voluntary redistribution. Thus, each year we donate 5% of our profits to charitable works and we systematically associate our clients with three or four major projects chosen at the beginning of the year by members of our team, from public work sites.
 

EG: Tell us about how GfK Conseils-Juridis can help with the long term business strategy of a family office? 
 

RGF: Our office is a true high-end multifunction tool that meets the slightest requirement of wealthy clients. We have the best collaborators and partners in the areas of law, taxation, accounting, communication and auditing. We act like a conductor who absorbs the problems encountered by our customers and then dissects, analyses and resolves them, without neglecting any aspect.   EG