4 minSubstantial wealth: a cross-functional approach is key
Large fortunes do not manage themselves. They need seamless orchestration. Balancing the demands of a business, a family, governance and succession – our wealthiest clients have a wide range of expectations that go beyond the traditional scope of wealth management. They are looking for a comprehensive approach that can get the generations talking to each other and cut across different jurisdictions as well as the private and professional spheres.
Behind many fortunes lies an entrepreneurial history. A project built over time, often with strong personal and family engagement, whose success raises a whole new set of questions about the best way to structure this wealth. How can the private and professional spheres be brought together? How can wealth be enhanced, protected and passed on – while retaining meaning and coherence?
"These questions are daily concerns for families and entrepreneurs with substantial wealth. For them, the lines between professional and private wealth are closely intertwined, perhaps encompassing holdings in an industrial or technology company, family investment vehicles, or commercial and private real estate," says Claude Medernach, Key Client Adviser at Banque de Luxembourg. These situations need a cross-functional approach, bringing together a range of expertise with a multi-disciplinary team focused on serving the client.
“We are seeing a change in perspective in the dynamics of families we meet. Family structures and wealth are becoming more complex, often in an international context, and the regulatory environment is constantly changing. This was starkly demonstrated by the recent French court rulings on Luxembourg financial holding companies.” This is the rationale for the significant development in our services for wealthy clients.
One platform, multiple areas of expertise
“Nowadays, the core of our support is no longer based solely on asset management, but on the seamless coordination of multiple areas of expertise including bespoke financing, wealth structuring, governance, estate planning and philanthropy,” explains Anne Goedert, Key Client Adviser at Banque de Luxembourg.
Luxembourg has established itself as one of Europe's leading hubs for wealth engineering, thanks in particular to the diversity and flexibility of certain investment vehicles and their international portability. But what really makes the difference for this type of client is having a team capable of joining the dots between the technical solutions and their family’s life plans – something that only the most experienced practitioners can provide.
In today’s world, a thorough understanding of international legal and tax environments is essential to support clients whose assets or family members may be spread across several jurisdictions. Such in-depth knowledge, combined with regular contact with the family, enables us to respond to issues connected to their current circumstances while anticipating future developments, which might involve legislative changes or major life events such as marriage, birth, separation, or the intention to pass on wealth or bring the upcoming generations on board. Long-term support of this kind, based on a comprehensive approach, is central to the quality of service that these families expect.
Beyond wealth structuring, one of their key requirements concerns the governance of investments. Some banks are developing strategic advisory services for this purpose. "For these clients, it is a question of devising a coherent allocation strategy that is aligned with all their wealth management objectives. We provide a dedicated investment expert who maintains regular dialogue with the client, informed by investment committees set up specifically for them. For clients with multiple bank affiliations, the aim is also to ensure portfolio diversification by consolidating their investments to avoid duplication," explains Claude Medernach.
All this expertise comes into its own in complex situations. “We recently worked with a family whose wealth is based on an industrial holding, a portfolio of financial assets and philanthropic projects in Europe,” she says. “This type of configuration requires both solid technical expertise and a detailed understanding of the family’s unique dynamics, corporate governance and long-term aspirations.”
Cross-functional support makes all the difference
A coherent approach that covers all aspects of an entrepreneur's wealth – professional, family, financial and societal – is crucial. This enables us to build long-term relationships based on a detailed understanding of each client's specific situation and aspirations. It is this cross-disciplinary approach, combined with a high standard of execution, that makes all the difference for our wealthiest clients.
Anne Goedert sums this up: “We are proud of our model, which is based on an integrated, dynamic and bespoke vision that is fit for the complexity and aspirations of our most exacting clients.” In an environment in which the challenges of preserving wealth, passing it on and giving it meaning are more pressing than ever, a cross-functional approach is now the norm for our wealthiest clients. It is a model that Banque de Luxembourg has been applying for many years, with the absolute discretion and attention that are its hallmarks.