Before the first meeting, there are still some reservations, but afterwards they take place again and again. In this interview, customer advisor Kerstin Rasch explains the background and importance of family days. She talks about possible topics, how to deal with conflicts – and the need for organisational framework conditions.

You organise family days together with your clients time and again, Ms Rasch. What are these meetings about?

The main aim of family days is to strengthen cohesion within the family. The aim is often to involve subsequent generations more closely or to introduce them to tasks. In some cases, however, the families also talk about fundamental issues. For example, about family assets or how the family wants to organise itself in the future, make decisions or resolve conflicts. We help with the organisation and moderate these days, which could not be more different.

Why is that?

There can be many reasons for this. The size of the family alone plays an important role here. Or the increasing distance from the founders of the family fortune – often entrepreneurs. Sometimes the founding generation wants to gradually hand over responsibility to the children, sometimes it is already about the transition from the third to the fourth generation or even further. As a rule of thumb, the further away we are from the founder on the timeline, the less the company takes centre stage these days.

In these cases, there are certainly more family members…

Indeed. It used to be clear that one of the children would later run the company. In some cases, it was just a question of who that would be. Today, that is no longer so clear. The next generation sometimes has completely different ideas and goals and is perhaps more interested in realising themselves.

What else has changed?

The spatial situation is often different. In the past, large parts of the family lived close to the company headquarters. Nowadays, things often cross national borders, which can make it more difficult to convey a family mindset that centres on shared values. These days are also good for that.

How often do family days take place?

This depends on the goals we want to achieve together with our clients. Depending on the initial situation, we recommend one to four family days per year. As a rule, families meet twice a year for this purpose.

What kind of family days are the most fun?

(laughs) They’ve all been fun so far. Two types of family days are certainly particularly exciting. The first is when the younger generation has not yet been informed about fundamental issues, or only to a limited extent. For example, how big the assets are. In these cases, we take over the communication and training, often together with the parents and, depending on the main topic, also with other trusted third parties such as the tax advisor. This allows everyone to become more involved in the topic.

And the other?

Family days that take place without the parents. The children are then allowed to ask any questions that they might not dare to ask in the presence of their parents. For example, because they don’t want to admit that they are not very familiar with a topic.

But then these two types of family days are not the rule?

No, although the differences here are really huge. It starts with how formal – or informal – the day should be. We often go out for dinner with the family the evening before. The following day, we can then discuss issues relating to assets or what the family structure looks like, or should look like.

The range of questions relating to assets alone is likely to be wide …

Indeed. This can range from the basics, such as what shares and bonds are, to complex topics. For example, what constitutes a strategic asset allocation and what was worked out with the family in a specific case. Or training family members on illiquid asset classes such as property, private equity or private debt.

How long does a family day like this last?

There are also big differences here. Last time, for example, it was five hours. It is very important not to overwhelm the audience. Details can then be explained in subsequent meetings. The fact that bond prices fall when interest rates rise is always a stumbling block. But questions about voting rights in a family business can also be difficult. And what happens in the event of an inheritance? What about the saleability of shares?

How often does the topic of sustainability play a role?

This question is being asked more and more frequently, especially by the younger generations. However, there are also two different topics here. They are probably thinking about sustainability in terms of investments. But it is at least as often about developing a sustainability strategy – for the family or the company. The first step is always to discuss within the family what sustainability actually means for this family.

There could be different opinions …

You are right. The topic is usually put on the agenda by the younger generation. However, family members usually agree on a basic understanding quite quickly.

How does a family day end?

(laughs) Generally in a good mood. But I’m sure you meant something else. It is important that it ends with the family having developed a common understanding of individual topics or, in other words, that a result or at least a partial result has been achieved. Given the large number of topics discussed, it is also important that certain formalities are adhered to. A protocol helps here, which is written and sent back to the group and must be approved by everyone.

A protocol? So far it sounded pretty loose …

It often is. However, family days are far from being a time to sit down and enjoy a little entertainment. These days are a lot of work for everyone involved. It starts with sending out invitations in good time. It’s about preparing the content. It’s about giving decision papers to the group. It often makes sense for the younger generation to take on part of the organisation: Whether this is of a technical or more organisational nature is not decisive. As a family office, we also provide support here.

Are family days on the increase?

In any case. Before the first family day, some people still have considerable reservations: a family work meeting? Is that really necessary? But in the end, everyone is happy that the family day took place – and is already looking forward to the next one.

“You can also map complex structures clearly”

HQT One is the new digital access to HQ Trust. Managing Director Christian Stadtmüller talks about the requirements of complex assets, parallels with fintechs – and wearing sleeve protectors.

Do you still wear sleeve protectors in your controlling department?

(laughs) No. We also no longer use slide rules and don’t send huge pdf reports around the world. Controlling has not stood still. We have also been experiencing a shift towards technologisation, digitalisation and leveraging economies of scale for many years.

So your department is a small fintech?

The comparison is not bad at all. We use a lot of modern technologies, so in some areas we are certainly positioned like a small fintech. Fintechs, however, are all about making a defined set of facts available to a large audience. At HQ Trust, we have specialised in working with clients who have assets with a high degree of complexity. This presents its own challenges. We need to be able to respond very individually to the questions and requirements of large assets or foundations and offer them professional overall asset management.

What is the reason for the high degree of complexity? From the higher amounts that are invested?

Only in part. Let’s take the example of a custody account. With a fintech, you get a solution for your shares and bonds – plus a clearing account. When we look at our clients, they often have complex structures in addition to assets that generally contain significantly more asset classes. For example, I look after a family: parents, their children and the generation above them.

It is not yet complex …

Here’s what happens now. The father has a custody account with Bank A, the mother has one with Bank B. There is also another custody account with a limited liability company in which the assets are pooled. In addition, there are individual properties, a real estate GmbH, a limited partnership and the fact that the transfer of assets between the generations has already begun: different people, different quotas and tax requirements.

Okay, you won’t get very far with Excel.

Exactly. In addition to a clear and transparent presentation for all stakeholders, you now need things that are essential for managing these assets, such as performance and risk indicators. You also need financial statements in accordance with commercial and tax law for the GmbH. All of this should be available at all times, including via smartphone, of course.

How do you solve this at HQ Trust?

About HQT One, the digital access to HQ Trust. The idea behind HQT One was to create a centralised access point for customers – regardless of how complex their asset situation is. With HQT One, customers have complete access to their current assets, their asset structure, controlling and all important documents such as reporting and exclusive analyses at all times.

Exclusive analyses?

Yes, but not on individual shares, but on the big issues that interest our clients. For example, the war in Ukraine, Covid or high inflation. But also topics where we have a special insight and opinion: Cryptocurrencies, for example, or private debt. The documents are of course responsive, so you can also read our analyses during a train journey.

What else do your customers see in HQT One?

That even complex structures can be clearly mapped in the system. For example, asset management at Bank A, a private equity investment, a property GmbH with direct properties and an asset-managing GmbH with two other management companies. All key questions are answered on the first page. Of course, clients are very interested in how their shares, bonds, gold and alternative investments have performed.

What if I want to see much more?

Anyone who wants to take a deep dive also has the opportunity to do so: Where do I stand with my assets and how have they developed over the course of the year? Have we achieved what was strategically discussed? I can see this using a benchmark and also over time. For liquid and illiquid asset classes. There are some unusual assets such as container ships, art or aeroplanes, all of which we can map.

And then I can track what my banks are doing?

Of course. If a portfolio is not performing as you expected, you can look into the reason for this. For example, you can display the shares by sector or region. And then you can find out that North America is not performing and which individual stocks were responsible. Every question is answered.

And then ask specific questions?

That is the goal: for many of our customers, it is very important to be able to see at a glance what has happened and then to be able to ask the right questions. This is because large assets, such as foundations, often have an asset holder who was previously an entrepreneur. They take a close look.

Do you still need the many advisors?

(laughs) Yes, there are still many areas for which we need our advisors. Incidentally, you can also call or write to them directly from the tool.