Lessons Learned and Advice Offered by the CEO of one of New Zealand’s Largest Family Offices
If you are the CEO of the single-family office representing one of New Zealand’s largest and wealthiest families, you are very likely to be an expert in the structuring and management of sophisticated, complex family offices. Hubbis was fortunate to have precisely that level of expertise on the second panel discussion of the Family Office Forum in Singapore on February 9, in the form of Andrew Hull, Chief Executive of the Todd Family Office from New Zealand. The event was presented in exclusive partnership with family office technology and services specialist Eton Solutions. The experts had gathered for this panel discussion to offer delegates some valuable insights into the creation and operation of a successful family office, and their advice is, of course, highly relevant to smaller as well as very large family offices, in whatever jurisdiction. Andrew’s key messages were that the family members – in this case more than 250 in the extended Todd family – are the clients of the family office and must always be front and centre of every action and service provided. Excellence is not optional, it is mandatory, as those clients can seek other advice and support elsewhere, if the family office does not offer the range of products, services and skillsets required. Operational efficiency and the clever use of outsourcing and partnerships are also of paramount importance for Hull as CEO, in order to free up the family office team to offer the best advice and expertise they can possibly deliver. Hubbis has distilled Andrew’s comments in this short review.
Moderator: Andrew you are running one of New Zealand’s biggest family offices. In the time since you have been in this role, what are some of the key lessons you have learned along the way?
Andrew Hull: Let me first set the scene for delegates. The Todd Family today includes over 250 family members , and these are the clients for whom we are working, and with whom we are communicating every day. This translates into about 700 legal entities that we deal with, and you can then multiply that by two to three times in terms of the investment portfolios, cash portfolios, lending and other things that we provide for them.
In short, there is immense complexity that comes from dealing with this quantum of individuals, and entities. There is an amusing adage relating to family offices that says: ‘if you have seen one family office, you have seen one family office’ and the implication of course is that each family office is very different and individual.
We provide our clients with a wide range of services from investments to financial and trust structuring advice, tax compliance, estate management, as well as simpler tasks such as sorting out their bills. All of the services we provide to Todd family members are designed to reduce the complexity in their lives, to make them a little bit easier.
To help us achieve these goals and deliver these services, there are areas that across the family office operations we decided can be streamlined, and that is why we work with Eton Solutions.
The relationship helps us manage all these complexities and helps us to focus on where we can really add value to the family and the family office. We strive to specialize in our core areas of expertise, and outsource other aspects to become more efficient and therefore deliver a better service for our clients. We are outsourcing to real experts who are specialists in their areas of operation.
I should add that a family is dynamic, and in our case, the Todd family is growing in numbers by somewhere between 2% and 5% each year, as children are born and so forth. As this happens, we have more demands on us and it is therefore even more vital for us to pass non-core services and activities to external partners and experts.
But even this is not easy.
“You have to think long and hard about finding the right partners to work with, who not only provide the best services, but also work well with us as a team. A key element is of course making sure that we are all very clear as to the overall objectives of each party, the division of responsibilities, and then incorporate the right methods to properly monitor and measure performance.”
We have in the past experienced situations where the time and energy we put into building a relationship and working with an external partner did not reveal the results we sought, so making sure from the outset that you have chosen the best business partner is vital and then to keep close tabs on the outcomes that are delivered. That is another key lesson learned.
I mentioned that the family is always expanding, and that means even more challenges for our team that today stands about 30-strong. Being able to scale up our activities but still focus on the key delivery of quality advice and service and maintaining all these family relationships is another vital outcome of our approach to running the operations, and to outsourcing to external providers and experts. Since I arrived at the Todd Family Office in 2016 we have embarked on a journey to scale up everything from the back office operations to investments and advisory, including all the key processes in between.
For example, when I first arrived, we were our own custodian, which was allowed in New Zealand under an exemption. However, we quickly decided that it really was not the right place to focus our time and energy, with as many as five of our 20-strong team at the time. That was a waste of our focus, associated risks were high and there we others in the markets that were specialist custodians with far deeper resources than us. We transitioned to external custodians, all experts in the field.
Moderator: Andrew, can you also offer a few words of advice for delegates to take away with them?
Andrew Hull: We are always looking long and hard at how we can provide the best service to the family members, because everything that they get from us, they can also obtain from other providers, whether that is investment expertise, trust and financial advice or tax guidance. Accordingly, we need to scale, to provide efficiency, enabling us to focus and of course hire and retain the right people with the right skills.
And remember that the client – all the family members – must always be front and centre of everything you do. They are the reason the family office exists. They are your purpose. To properly serve them and to thrive as a family office, you must be immensely focused and make yourself as efficient and productive an operation as possible. Then you will be able to focus on the rights areas and truly add value.
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