The $100 Trillion Question Are Families Ready for the Generational Shift

So we finished the session with optimism. Uh we will try to keep that optimism high with uh my three panelists and try to answer this question the best way we can in no time so that you can still go for lunch at some stage. Now our thesis at the firm uh and this follows a panel that I had the pleasure of chairing with families this morning is that the needs of families are changing in a changing world and these are some of the themes which we believe families are today focused on. Uh reputation heading to a jurisdiction which has high regulation yet unsupervised vehicle for wealth management. Privacy we believe is the next supercurrency.

No families wants its data in the public domain understandably and we believe this is a theme that we has a future control. Most families won't control but more importantly people are chasing stability. You cannot protect wealth if you are not doing so from a jurisdiction that has proved to be over time stable and with a willingness to look at the future. And this is not something that is stable. There is a tectonic shift in financial centers.

And if you look at the reality of yesterday year, the reality of today and where it is headed tomorrow, it seems that all the roads go through the Middle East. And this is what we are going to discuss with uh my panelist. So Patrick, thanks a lot for joining us. If uh when we talk about wealth preservation, let's make it general. What actually are we trying to preserve?

Yeah, thank you for having me here. Um I think uh as you just mentioned on your slides, um I think it's not just about protecting capital. It's really about uh preserving also the the values, the reputation uh of the family. And I think it's a it's a big uh it's actually a big thing to prepare also the next generation because in some of the European families especially maybe it's a bit different in Asia but in Europe you sometimes have like three four generations sitting at the table with different aims. So much more than uh than capital.

Uh Franchesco, would you would you uh second that? Is it also something that you feel that you see from uh the let's say the the balance jurisdiction from Europe, Monaco to here? Absolutely. So thank you for having me. So if we go back in time,

yes, what was the the aim in in the past? We were local not global. Entrepreneurs were creating capital, wealth, and they were putting it in parts in Switzerland. This was all over the all over the world. Today we're global.

So what do we want to preserve? It's first of all the the capital of course, but all a lot of other parameters come into play. Reputation.

Yes,

for sure. We want the family to bring the same reputation forward. But governance, I think there's a lack of yet family governance to make sure that we can bring the whole capital of the family that has been creating to the next level. And so we always speak about asset under management. I think we should speak about assets under governance.

I like that. Uh and it's a theme that resonates a lot at the domestic level here in the UAE where the government has been really pushing for education and implementation uh amongst local families. So we have the perfect lady for the job from a readiness standpoint here in the Middle East. Diana, do you think families are ready and what are they really focusing on?

So let me start. Let me go closer to the microphone. So in the UAE, I mean all over the world, when it comes to readiness of a family, readiness, we're talking about resilience, continuity, the ability of the next gen to take it further. So how ready are they? The UAE is a very, very young nation.

If I thought that the UAE would be so concerned about the capital, the money that these families have invested in, profited from, that's the economy of the UAE. I see that the government now is so focused on how to make it happen for the next generation by what? By making everything around them possible. Whether it is the legal structure

or even the emotional readiness by getting them to feel that they are in a culture that will take care of them. We cannot disconnect the family from the culture. We cannot disconnect the money from the culture. There is an instilled culture in the UAE that cares about the next gen and they are making it their aim in every emirate in the UAE to make it possible and we can always discuss later what is happening in terms of the legal and other means. Franchesco, we we talked earlier about where uh which jurisdiction or jurisdictions to focus on to implement the governance that you mentioned to.

Uh in your eyes, what what are the key metrics that families should look into when looking and selecting jurisdictions?

I think that one major point is convenience.

Yes. So people in a world that is hyper complex, hyper regulated, they want first of all convenience and I think that this country is definitely getting it. Uh if I look at Europe, it's becoming more and more complex. People wants to get convenience. Of course, compliance and stability are also of big focus.

But let's look at how we can do things faster, better, and in a convenient way for the families. Patrick, you are spreading your wings between multiple jurisdictions. So I I would love to have your sounding board on this convenience and uh which tool to use in that context because not every tool is convenience. So is this a changing landscape in your mind? I think I think the last couple of years have also shown that the asset allocation or wealth allocations starts by using different jurisdictions and uh this makes it obviously complex for a family to consolidate all this information back together.

Um so this is obviously one of the four that you have as a multif family office uh being active in in uh different uh jurisdictions as we are and then yeah you need proper IT systems as you just heard uh before during the break um it becomes really complicated for these families to get all the data together including real assets bankable assets and so on but I think there are good good products uh in the market where you can make actually non-bankables suddenly bankables and then they appear also on your bank statement. So I think families families as uh Franchesco just said it's convenience they want to have their partner close to them but then you know they also look into into different uh jurisdictions. you you strike a very good point here which uh I think a lot of families are looking first at the structure and then at the investment. I think this is a practice of another time. You should look at your uh investment thesis and build your allocation structure to match that.

Uh a lot of old school structure are unable to cope with digital with private debt with all other alternative asset classes. If you have a trust of an institutional trustees this can be challenging. This is why we believe a lot of families are taking control. So maybe Diana, I come back to you on that. The we see a lot of families taking control of their investment verticals today.

Do you think it's because this shift to from traditional asset classes like real estate and finance towards more alternative and let's say fastpac investment?

Okay. So when we say fast-paced investments, we're talking about a completely different investment appetite nowadays, we're talking about digital assets. We're talking about things that we never even dealt with before as a previous generation. So what families need now and they seek to be honest is much more than the investment structure, the investment appetite. It's privacy of course control governance and legal structure legal certinity and the certaintity comes from our jurisdiction where the laws are in place the um the courts the dispute resolution mechanisms are available.

This is what this is what what families are looking for. Families are just lately, as we've seen, relocating to the UAE in the biggest numbers we've ever witnessed. And that is because the UAE has prepped itself to be where it is now. the jurisdiction that makes it convenient. The convenience in every way of life.

The UAE provides you the convenience plus the legal certaintity where the dispute resolution mechanisms are available and the people the human resources that are available in quality and to a certain extent in abundance. I I'll come back to you on the uh on the privacy uh element Patrick if I can but just before that uh I think it's very important to understand privacy versus uh secrecy. Privacy is just no data in the public domain and trusting an ecosystem a regulator with your data while being compliant. So let's be very clear on that. So perhaps I'll come back to you our thesis of privacy being the next super currency.

Do you concur council?

Um I think yeah of course privacy is very important but I think um privacy needs to happen in a in a reputable and transparent jurisdiction. It's not about hiding. It's about transparency in regards to the legal framework uh regulations. Um it's more about that to have the certainty that if you choose a jurisdiction that you can rely on and it's not changing in a couple of years again. And uh I think uh here it's certainly important that you make a wise uh decision on that

question. Who doesn't own a phone in this room? No one, I guess. So secrecy is gone. Mhm.

Privacy it's something else. Privacy we need the families need to put the money the structures in countries that do understand what privacy means. meaning that you are you cannot be in a situation where and in Europe lately we had the case where we wanted to leave access to trust companies uh to anyone that's the big difference so we need to make sure that families are protected from people who wants to gather information for malware secrecy is gone and if we go back to the old model the Swiss model it is gone. So we need to structure the the the way we are building the governance and and the families in another way and I think that this country is ticking start ticking a lot of boxes and congratulation for that because there's a convenience piece that works as well.

I so agree.

So I come back to you Diana. we attempt to answer the question of whether families are ready. Uh we touched on a few metrics on how to choose a jurisdiction. We know that Abu Dhabi has over the past 20 years put a lot of effort in introducing the infrastructure, the tools, the regime, the courts uh and also the double tax and investment protection treaties around. So in your mind, do you think that Abu Dhabi can become the global center for this next 100 trillion transition?

Okay. So the 100 trillion um that's the question of the day. When I think of Abu Dhabi, I think of the UAE.

Yes.

I am a a a national of a country that has seven amazing emirates. and every emirate has worked relentlessly on making the UAE step ahead of everyone else. So when I think of Abu Dhabi, I think I don't know Dian if you were with us 20 years ago sitting me and Cynthia trench thinking of you know how to in a way protect the people in the UAE from inheritance obligatory inheritance rules. And at that point we had nothing but the laws of succession that were following Sharia. They were strictly Sharia.

um compliant and when I think now after 20 years of what I see I see in Abu Dhabi ADGM I see in Dubai the IFC I see in RACK

their own offshore financial hub and then I look at Abu Dhabi and I see the ADJD the Abu Dhabi judicial

um uh

department which is a court on its own that has converted itself into a civil court when it comes to wills to marriages. Remember one of the most crisis moments in a family is a marriage sometimes crossborder marriages money so like it's all about Abu Dhabi saying that when the legal certaintity is here and the investments are internal and flooding from abroad all we need is to provide the convenience and it is there

so I'll I'll add try to add up to that with Patrick. What is missing? What can uh Abu Dhabi and the UAE do more to convince more people not only to come here but also to uh take advantage and uh plant roots.

Thank you for the difficult question here in front of the audience. Um listen uh I think Abu Dhabi has a very strong foundation. Um I think what it still lacks is a bit of a track record among the European families. But you know this is something like an investment fund. It just takes a bit of time.

Um but uh with the ecosystem uh growing uh as it is right now and very fast I think it can be it can be a hub for the next uh uh generation and for this 100 million trillion uh assets

final world uh what is the next stage in ADGM in uh conquering the world

so in today's world physical security matters it wasn't a years ago. Today it matters more and more. So I think the security box has been ticked in in in this country. The fiscal one because big families are definitely looking at it and now you have this transition people leaving Europe or other countries in the world to move here. Why?

because there is certainty and security now. Is their capital following them? That's my question. Is UAE is Abu Dhabi keen to be ready to be the next Switzerland? I think you have all the ingredients to make it happen.

And now people are moving. Maybe it's time also to get ready to attract the capital and to make sure that they bring it here to be managed here at least in a diversification strategy. And on this note, thank you very much to all three of you. Time is up. Thank you to the audience.