What is a Family Office approach to wealth management?

According to data from the London Business School, family offices worldwide control some $10tn in assets and are becoming an increasingly important investment force. With Intelligence predicts that family offices globally will reach $11.41tn in assets under management by 2026. In South Africa, the family office service has become a fast-growing wealth management segment with an AfrAsia Bank Africa Wealth Report predicting that total private wealth in Africa will reach $2.6tn by 2030.
Research conducted by Knight Frank found that more than 4 000 individuals will join the league of ultra-high-net-worth individuals (UHNWIs) in Africa by 2026, a growth rate of 33%, the fastest in the world after Asia.
The family office model offers HNWIs several unique benefits. Families benefit from a highly qualified, multi-disciplinary team of advisors who are experts in different fields of finance, both domestically and offshore, such as asset management and global tax structuring, estate planning, as well as cash and risk management. They work together to make key financial recommendations and create financial solutions to suit the needs, expectations and goals of their client families.
Over the last few years, investors have faced some unexpected challenges, ranging from geopolitical instability, recession fears, stubborn inflation and aggressive interest rate hikes, which have added complexity to the management of family investment portfolios.
With the investment landscape looking more positive, the Global Family Office Report, published in September 2023, canvased almost 270 family offices, representing over $565bn in family net worth regarding their investment strategies going forward.
The most significant asset allocation move was increased weightings to fixed income and private equity.
Public equity saw a large retreat in allocations, while allocations to real estate increased.
Direct investing remains a high priority, with two thirds of family offices looking for potential new opportunities at attractive valuations.
An intensified focus on wealth management, with somewhat reduced emphasis on fostering family unity and continuity compared to previous years.
While the concept of a family office is by no means a new idea internationally, Private Client Holdings (PCH), a Cape Town-based company that offers a family office approach to wealth management, is taking the lead in South Africa when it comes to providing high-net-worth families with an all-inclusive wealth management solution. “As many decades of family office history have shown, the most successful investors are those who have followed a disciplined, long-term investment plan, which is regularly reviewed and adjusted,” says Andrew Ratcliffe, a director at PCH.
The PCH family office approach to wealth management is underpinned by their goals-based wealth management (GBWM) process. “GBWM integrates wealth planning and investment management into a cohesive, unified approach. Traditional financial planning invests in portfolios with a single risk profile where performance is measured relative to the market or benchmark performance. In contrast, GBWM looks at what our client wants to achieve with their hard-earned wealth for themselves and for their family, during and after their lifetime. This is done by setting individual goals based on their current lifestyle and their future needs and wants. It is a complex and comprehensive process,” says Ratcliffe.
The PCH offering is a forward-thinking, heavily regulated service that is delivered as a result of a carefully developed, integrated organisational structure, provided by experienced, high-quality investment and wealth management teams. Being owner managed and 100% independent with no institutional parent, the wealth management advice they provide is solely aimed at achieving their client’s personal wealth goals.
“Our relationship with our clients is fundamental. We are not a large, unyielding corporate but pride ourselves on delivering a boutique service. At PCH, families benefit from a highly qualified, multi-disciplinary team of advisors who are experts in different fields of finance, both domestically and offshore, such as asset management and global tax structuring, estate planning, as well as cash and risk management,” adds Ratcliffe.
PCH has been recognised as the Top Wealth Manager in South Africa in the Boutique category of this year’s Krutham awards, announced recently. The PCH family office approach to wealth management is a unique and successful value proposition that continues to grow. The company is on track to being recognised as one of the top family office companies in South Africa.