EXCLUSIVE: Family Office Experts Look Back On 2015, Share Their Thoughts For 2016
Eliane Chavagnon, Editor - Family Wealth Report, December 18, 2015
After a busy year, family office experts think about what issues have been top-of-mind for them, and what they predict for 2016.
It certainly hasn't been a dull year for the family office sector and wealth management sphere at large – not just in the US but globally. As examples of what have been – and still are – some of the industry's most pressing issues in North America in 2015,Family Wealth Report explored topics such as socially-responsible investing, tax-efficient investing, health in wealth management and value propositions during its industry Summits in March and September.
Here, various family office experts offer their thoughts on how the sector fared this year – the challenges and opportunities – and the road ahead in 2016.
Concerns around data protection at both the client and institutional level have escalated in recent years given that so much (often sensitive) information is now shared electronically. Most, if not all, players in the wealth management space have ramped up their security measures in response to emerging threats (internal and external) such as cybercrime, and the matter is certainly high on the agenda among family offices.
“In the family office world, the value of trust and safety is always a top priority, and became more so in 2015,” said Marianne Young, president of Market Street Trust. “Better access for clients to their information can potentially mean more entry points for information theft, which means systems integrity, always important, has become a top priority, and will remain one.”
Besides security, one of the biggest challenges of 2015 was market volatility, Young said. “The domestic stock market’s performance this year has overall been pretty flat, but that included some volatile periods. In addition, many other assets, including foreign equities, the energy sector and emerging debt have fared poorly.”
Market Street expects the challenging investment environment to continue into and through next year, she added. “Equity markets will remain volatile and returns may be muted. To some degree, this was expected, given the long period of solid returns since the financial crisis.” These challenges will likely be magnified in 2016 due to the uncertainty of the upcoming US elections and ongoing geopolitical events and global instability, Young said.
Meanwhile, Market Street believes that family offices will see higher client interest in impact investing in 2016. “It is not merely a strategy for Millennials, but one that clients of all ages are inquiring about as they realize there may indeed be opportunities at the nexus of philanthropy and investment with the potential for attractive strong returns,” she said.