STEP Journal

In Issue 3 of the STEP Journal, this column focused on best practice when handling client complaints to enhance and maintain client‑advisor relationships. This led to the question of why people complain and whether there are any simple strategies to prevent complaints arising in the first place.

Incidental remarks do not always come out as intended and may upset one’s conversation partner. The rise of online meetings over the past year has also resulted in a sort of ‘Zoom fatigue’, where one may momentarily forget the camera and show their tiredness rather than signalling they are actively listening. It is these slight behaviours that may increase the chance that a client or colleague will decide to make a complaint.

Studies of the US healthcare system have asked why medical practitioners are more likely to be sued for malpractice than their peers when there has been a poor outcome for the patient. On paper, the doctors appear to be equal in their training and qualifications and so resulting negligence claims do not appear to be based on concerns over ability. However, interviews with the patients identified they were more likely to take action based on how they felt they had been treated by the practitioner up to the point when things went wrong.

When people perceive that they have been ignored or a professional has not taken the time to listen to their concerns, they are more likely to complain or sue for malpractice. Tone of voice and choice of phrasing were also shown to be relevant to their decision.

Although there may be any number of (often complex) factors involved in client matters that lead to a complaint, applying the abovementioned principles to the field of trusts and estates perhaps one can learn a valuable lesson. If people are shown respect, they are less likely to want to submit a negligence claim or formal complaint if something goes wrong.

These studies act as a helpful reminder of the importance of courtesy, which is recognised as a core ethical behaviour listed in STEP’s Code of Professional Conduct.

Code 5 of STEP’s Code of Professional Conduct states that: ‘A Member shall be courteous and considerate towards the people with whom he or she has dealings in the course of his or her professional work.’

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Award winners announced

STEP is delighted to announce the winners of this year’s Excellence Awards, which celebrate exceptional student achievement, recognising the highest achievers across all STEP qualifications globally. The 49 students hail from all over the world, representing 16 countries.

View the list of top scorers at excellence.step.org.

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New thought leadership publication

On 22 June 2021, STEP launched a new publication, sponsored by IQ‑EQ, as part of our thought leadership work: Family Dialogues on the Responsible Stewardship of Wealth: A Guide (the Guide). The Guide has been well received and has been downloaded by practitioners in 65 countries.

Download the Guide at bit.ly/3xcz7fY

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STEP China update

The STEP China branch committee has put together a programme of events taking place over the course of the year and is working to develop other resources for members locally. Visit the STEP China microsite for more information, at china.step.org.

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Wanted: Essay Route panel members

STEP is looking for additional members to join the worldwide STEP Essay Route Panel (the Panel), especially those based in Asia and Europe or with experience there. Experience in setting and assessing exams or essays is also desirable.

The Panel is responsible for overseeing processes around the annual setting of topics, essay assessment and maintaining the standards of the STEP Essay Route. The Panel meets four times a year and works closely with the Membership Team to ensure that members joining STEP through the Essay Route meet the ‘gold standard’ expected of a TEP.

If you are interested, please email our Membership Team at membership@step.org.

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How to sign up for the TQR

Are you looking to expand your pool of continuing professional development resources? The Trust Quarterly Review (TQR), with its wealth of technical and academic analysis, may be just what you’re looking for.

If you wish to be alerted to the release of new issues of the TQR, ensure you’re signed up to receive the relevant communications.

Signing up is simple:

1. Log in to your profile at www.step.org/step/login

2. Scroll down and select ‘Edit contact preferences’

3. Select ‘Trust Quarterly Review (TQR)’ from the list of STEP communications

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Special Interest Spotlight Sessions

STEP’s Special Interest Groups (SIGs) will be hosting a programme of seven specialist webinars from 29 November – 8 December 2021. In addition to specialist content across SIG topic areas, the sessions will also feature three thought‑provoking webinars with expert commentary focusing on the restoration of public perception of trusts, wealth stewardship and the definition and composition of the ‘modern’ family and what that means for estate planning.

Find out more at bit.ly/3gv1vEC

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STEP shortlisted for membership excellence awards

STEP is proud to announce that it has been shortlisted for four memcom 2021 Membership Excellence awards:

• Best Magazine Launch or Re‑launch for the STEP Journal;
• Best Public Awareness Campaign for our work to obtain temporary legislative change in England and Wales to enable people to validly execute wills remotely (in direct response to COVID‑19);
• Outstanding contribution to a Membership Organisation for John Riches TEP, recognising his far-reaching contribution to our public policy work; and
• Best Mental Health and Wellbeing Support for our people.

The full shortlist can be found at bit.ly/3eGWoAm

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Online Member Profile changes

We recently updated the Member Profile section on the STEP website to better highlight that when a member changes their address and contact details they also need to review and update their Directory preferences. The website will now prompt members to review their Directory Profile display settings when a change is made. We advise all members to check their Member Profile at www.step.org/step/login and STEP Directory settings regularly to ensure these are up‑to‑date and you are happy with the information that is displayed in the public domain.

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30th anniversary content

STEP turned 30 on 4 July 2021 and we have produced a wealth of anniversary‑related content for our members.

In addition to our special anniversary‑themed STEP Journal for Issue 3 2021, the latest Trust Quarterly Review includes a detailed country‑by‑country breakdown of the past 30 years of trust regulation, legislation and case law; we have conducted over 30 interviews with esteemed members throughout STEP; and on page 20 of this issue, members share their fondest memories of STEP and we chat to some of our newest TEPs. To read the interviews and view the rest of our anniversary content, visit www.step.org/about-step/step-30th-anniversary.

We will be celebrating STEP’s 30th anniversary throughout the next year, so please get in touch with your stories, memories and predictions at step.editor@step.org.

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Policy consultation tracker

As part of our thought leadership work, STEP responds to consultations in different jurisdictions to help influence policy globally. If members are aware of any policy consultation in their jurisdiction that they would like to bring to the awareness of the global STEP membership, please forward details to the Policy Team at policy@step.org.

All consultations STEP has responded to can be found at www.step.org/public-policy/consultation-tracker.

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Save the date

STEP Private Client Awards 2021/22

The STEP Private Client Awards 2021/22 (PCAs) will be held virtually and will be free to attend.

This year saw 297 entries, with the expert judging panel shortlisting 66 firms and 12 individuals from across 13 countries. Winners will be announced at the PCAs Virtual Awards Ceremony on 23 September 2021, commencing at 16:30 BST.

The ceremony will feature a charity raffle to raise additional funds for our charity partner, the World Literacy Foundation.

All are welcome to attend, so save the date and book your ticket now at pca.step.org.

STEP LatAm Conference 2021

The STEP LatAm Conference 2021 will take place at the Riviera Maya, Mexico, on 14–15 October 2021. The conference programme includes keynote sessions on current topics in CRS and FATCA compliance for fiduciaries and their clients, and the future of work and innovation in the digital arena. View the full programme and register at www.steplatamconference.com.

STEP Asia Conference 2021

The STEP Asia Conference 2021 will take place virtually over three half‑days on 16–18 November 2021.

Find out more and book your place at www.stepevents.org/asia2021.

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Connect with us on social media

Want to stay up‑to‑date with all the latest events, courses and content that STEP has to offer? Make the most of your membership by following and engaging with us on social media.

• Twitter: @STEPSociety.
• LinkedIn: STEP – Advising Families Across Generations.
• Facebook: @SocietyofTrustandEstatePractitioners.

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STEP thought leadership webinar

STEP members and non‑members can view the free webinar on demand on the STEP website. STEP will be feeding into these consultations, so if you have any thoughts or feedback on the proposals then please contact the Policy Team at policy@step.org. We will keep members apprised of any legislative developments in this area.

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Disciplinary notices

• Teresa D’Alessio of STEP Beds, Bucks and Herts has been issued with a reprimand by the STEP Disciplinary Panel. An Investigation Panel considered a complaint against D’Alessio regarding the arrangement of funeral plans and the opening of a bank account. The Investigation Panel determined Ms D’Alessio made administrative errors that caused considerable stress to the clients, so warranting a reprimand.
• Edward Bromet of STEP Yorkshire has been excluded from STEP membership following a decision by the Investigation Sub Committee (ISC). The ISC considered a decision by the Solicitors Regulation Authority to intervene at Bromets Solicitors and place conditions on Bromet’s practice as a Solicitor. The ISC found breaches of clauses 1.1 (Observing the Law), 3 (Integrity), 7 (Honesty), 8 (Conflicts of Interest) and 13.3 (ii) (Obligation to Notify the Society) of STEP’s Code of Professional Conduct.
• Matthew Ledvina of STEP Zurich Centre has been excluded from STEP membership following a decision by the ISC. In January 2019, Ledvina pleaded guilty before the US District Court of one count of conspiracy to commit securities fraud and was suspended from appearing or practising before the Securities and Exchange Commission. The ISC found breaches of clauses 1.1 (Observing the Law), 1.2 (Assisting in a Breach of Law), and 3 (Integrity) of STEP’s Code of Professional Conduct.

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STEP moves

• Robbie Brown TEP has replaced Greg Leslie TEP as Chair of STEP Atlantic Provinces.
• Jessica Lyle TEP has replaced Robbie Brown TEP as Vice Chair of STEP Atlantic Provinces.
• Richard Lawrance TEP has replaced Helen Price TEP as Chair of STEP Beds, Bucks and Herts.
• Rebecca Suthers has been appointed Secretary of STEP Bournemouth.
• Kenneth Keung TEP has replaced Ruth Spetz TEP as Chair of STEP Calgary.
• Carol Sadler TEP has replaced Kenneth Keung TEP as Vice Chair of STEP Calgary.
• Rebecca Hett TEP has replaced Dale Franko TEP as Treasurer of STEP Calgary.
• Katherine Ratcliffe TEP has replaced Vickie Schneider TEP as Secretary of STEP Calgary.
• Amy Szostak TEP has replaced Leigh Harter TEP as Treasurer of STEP Cambridge.
• Melissa Agricole TEP has replaced Jack Thorogood TEP as Treasurer of STEP Cambridge.
• Conrad Proud TEP has replaced Tamara Corbin TEP as Treasurer of STEP Cayman Islands.
• Reetu Pepoff TEP has replaced Katarinna McBride TEP as Chair of STEP Chicago.
• Paula Camacho Henao TEP has replaced Juan de Dios Bravo Gonzalez TEP as Secretary of STEP Colombia.
• Sam Amelio TEP has replaced Chris Turnbull TEP as Chair of STEP Edmonton.
• Michelle Coleman TEP has replaced Sam Amelio TEP as Vice Chair of STEP Edmonton.
• Sharene Gaitor TEP has been appointed Secretary of STEP Edmonton.
• Andrew Niles TEP has replaced Gemma Pols TEP as Secretary of STEP Guernsey.
• Sandra Meade TEP has replaced Barry Kennelly TEP as Secretary of STEP Ireland.
• Barry Kennelly TEP has been appointed Vice Chair of STEP Ireland.
• Kirandeep Guraya TEP has replaced Nika Terry TEP as Treasurer of STEP Jersey.
• Masum Ahmed TEP has replaced Nima Stepney TEP as Chair of STEP Kent.
• Nima Stepney TEP has replaced Masum Ahmed TEP as Vice Chair of STEP Kent.
• Stephanie Parker TEP has replaced Caroline Brooks‑Johnson TEP as Treasurer of STEP Kent.
• Anne Postlewaite TEP has replaced Kelly Watson TEP as Chair of STEP Okanagan.
• Jennifer Eshleman TEP has replaced Melodie Lind TEP as Vice Chair of STEP Okanagan.
• Magnus Aaserud TEP has replaced Anne Postlewaite TEP as Treasurer of STEP Okanagan.
• Braeden Rahn TEP has replaced Jennifer Eshleman TEP as Secretary of STEP Okanagan.
• Faisal Khorshid TEP has replaced Crystal Taylor TEP as Chair of STEP Saskatchewan.
• Amanda Doucette TEP has replaced Faisal Khorshid TEP as Vice Chair of STEP Saskatchewan.
• Alexander Lamb TEP has replaced Alix Storrie TEP as Chair of STEP Scotland.
• Susie Tweedie TEP has replaced Alexander Lamb TEP as Vice Chair of STEP Scotland.
• Sandra Bussey TEP has replaced Michael Bondy TEP as Secretary of STEP Southwestern Ontario.
• Joel Campagna TEP has replaced Michael Bondy TEP as Treasurer of STEP Southwestern Ontario.
• Roderik Strobl TEP has replaced Caterina Martinoli TEP as Secretary of STEP Swiss & Liechtenstein Federation.
• Sarah Phillips TEP has replaced Kathryn Woodward TEP as Chair of STEP Thames Valley.
• Corina Weigl TEP has replaced Elaine Blades TEP as Chair of STEP Toronto.
• Ian Lebane TEP has replaced Corina Weigl TEP as Vice Chair of STEP Toronto.
• Yogesh Bhathella TEP has replaced Sally Dennis TEP as Chair of STEP Vancouver.
• Laura West TEP has replaced Yogesh Bhathella TEP as Vice Chair of STEP Vancouver.
• Tony Lee TEP has replaced Vincent Lo TEP as Treasurer of STEP Vancouver.
• Dwight Dee TEP has replaced Laura West TEP as Secretary of STEP Vancouver.
• Loreena Gillon TEP has replaced Jim O’Donnell TEP as Chair of STEP Western Australia.
• Claire Hawke‑Gundill has replaced Loreena Gillon TEP as Vice Chair of STEP Western Australia.
• Janene Bon TEP has been appointed Chair of STEP Western Australia.
• Danielle Bechelet has replaced Claire Hawke‑Gundill as Secretary of STEP Western Australia.
• Jennifer Bruce TEP has replaced Sarah Walton TEP as Treasurer of STEP Western Australia.
• Emma Facey TEP has replaced Cheryl Farnham TEP as Chair of STEP West of England.
• Cheryl Farnham TEP has replaced Emma Facey TEP as Vice Chair of STEP West of England.
• Harmanjit Mavi TEP has replaced Tannis Dawson TEP as Chair of STEP Winnipeg.

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People moves

• Joanne Verbiesen TEP has joined Bedell Cristin as a Partner in its Singapore office.
• Ingrid Fraser TEP has joined Cartmell Shepherd Solicitors as a Solicitor.
• Jack Burroughs TEP has joined the CLA as a Private Client and Taxation Advisor.
• Greg Shannon TEP has been appointed Judge at the Provincial Court of Alberta, Calgary Civil Division.
• Michael‑Pierre Giraud TEP has joined Standard Bank as Head of Fiduciary Services in its Jersey office.
• Alison Bragg TEP has joined Womble Bond Dickinson as a Consultant.

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EPP update

STEP’s Employer Partnership Programme (EPP) is pleased to welcome Womble Bond Dickinson (UK) as a Platinum Employer Partner. The EPP is also pleased to have worked with the following organisations on their re‑accreditations: Turcan Connell and Lupton Fawcett (Platinum Employer Partners) and FigTree Financial (Employer Partner).

Find out more about the EPP at www.step.org/communities/employer-partnership‑programme.

In April 2020, the UK’s entrepreneurs’ relief initiative was replaced by business asset disposal relief (BADR) under the Finance Act 2020. For several years, even before the current economic climate caused by COVID‑19, there were calls for the relief to be reformed or abolished. Its provision of a flat 10 per cent capital gains tax (CGT) rate is an attractive relief and a worthy successor to taper relief and its predecessor, retirement relief. Despite having survived so far, however, the relief is a shadow of its former self.

BADR is available on the sale of:

• a business (or a freestanding part of a business, although it is often hard to determine what that is);
• business assets upon cessation of trading;
• assets used by a company or partnership upon withdrawal from that business; and
• unquoted trading company shares.

Trustees of interest in possession (IIP) trusts can also claim BADR; however, this is a sore point. Her Majesty’s Revenue and Customs (HMRC) insists that the life tenant must have had an IIP in the trust for the 24 months prior to sale by trustees of settled assets or shares, despite the legislation not actually stating this and suggesting only that an IIP must exist at the time of sale. Indeed, at the time of writing, the case of HMRC v Quentin Skinner 2005 Settlement L & Ors was deciding that very point.¹ Although the First‑tier Tribunal (Tax) found against HMRC’s interpretation,² the Upper Tribunal (Tax and Chancery Chamber) recently found in favour. The England and Wales Court of Appeal will soon be deciding which view is right.

When the relief was first introduced in 2008, the UK was suffering its worst recession in decades, so something was needed to encourage inward investment. As one of the major concerns of entrepreneur investors is an efficient exit, the old retirement relief was dusted off, changed slightly and labelled entrepreneurs’ relief. Numerous changes were then made over the following years.

As the economy improved, there were concerns that the relief was not actually achieving what it had set out to do in attracting investment. There were concerns too about how much tax it was costing Her Majesty’s Treasury: GBP2.7 billion in 2019/20, according to HMRC’s own statistics.³ So, the government gradually tightened up some of the relatively liberal criteria.

In 2015, requirements tightened for individuals selling off‑balance sheet assets; the asset would now have to have been owned for three years, in addition to being used in the business for (at that time) 12 months. Further, the shareholder/partner must reduce their stake in the company/partnership by at least 5 per cent, which in turn must have been held for at least three out of eight years. In 2018, the definition of ‘personal companies’ changed to include a 5 per cent stake in distributable reserves and assets upon winding up, not merely the ordinary share capital and voting rights.

The biggest change, however, came in 2020’s budget. As well as the name change, the lifetime limit of relievable gains was reduced from GBP10 million to its original GBP1 million, an act that might as well have abolished the relief for many. Because the limit is indeed a lifetime one, it has a built‑in retroactive effect; anyone who had already amassed more than GBP1 million of relievable gains in their lifetime was instantly barred from further relief. It is no worse than the original 2008 allowance, and although it is still a big drop from GBP10 million, there is still potentially GBP100,000 of CGT savings available.

Conclusion

BADR remains a valuable relief, albeit not as valuable as it was before April 2020. The criteria are still relatively relaxed and a trading business owned for two years or more will usually attract the 10 per cent rate when the owner sells it. The change in the ownership requirement from 12 to 24 months did little more than bring the criterion in line with that for inheritance tax business property relief; only 5 per cent full and genuine ownership of a company is still required alongside employment/directorship. Depending on how the country recovers from the COVID‑19 disaster, BADR could still be among the first for the chop in the future, but even though it has taken a heavy trim already, we should remain thankful it is here at all.

 

Under the trust laws in most jurisdictions, trustees are permitted to retire voluntarily. But what about the situation where the beneficiaries want, and have asked, a trustee to retire but they are reluctant to do so? This would often, but not always, arise where there are disputes over the trustee’s fees or the terms of their retirement. In such circumstances, what should a trustee do?

Is it appropriate for the trustee to refrain from retiring until those disputes are resolved? Can the court intervene and direct a trustee in such circumstances to retire? The landmark decision of the Royal Court of Jersey (the Court) in In the Matter of the Velloz Settlement provides important clarification on these issues.¹

Retirement

It will often be obvious to a trustee when to retire. It may be their own choice, for example, where they no longer feel equipped to carry out the role. Or perhaps one or more of the beneficiaries has asked them to retire and wishes to change trustees. In either scenario, it is important to remember that a trustee remains under an ongoing duty to act in the best interests of the beneficiaries, and the trustee should have central regard to this factor when considering retirement.

On a retirement or removal, a trustee will usually be required to surrender trust property in their possession or control (subject to prohibitions imposed on such transfer by other legislation, such as that concerned with anti‑money laundering) and, if relevant, assist in the transfer of trusteeship to another trustee.

Retiring trustee’s protections

A trustee has the right to indemnity from the trust fund for liabilities reasonably incurred. This usually provides appropriate comfort for a trustee while in office. However, a retiring trustee is more exposed. Once the trust property is passed to the continuing or new trustees, the property will be placed outside the outgoing trustee’s immediate control. Furthermore, if the new trustees are based outside the jurisdiction, the trustee will no longer be under the effective control of that trustee’s domestic courts and they may have to resort to a foreign court in order to obtain an effective indemnity or reimbursement.

For these reasons, under the trust laws in most jurisdictions, the duty to surrender trust property is subject to the right to reasonable security. In practice, it is common for trust instruments to make provision expressly for this particular situation. What constitutes reasonable security? As has been stated by the Court on several occasions, what is reasonable security will turn on the particular facts of the case.² In some instances, monies held in escrow may be appropriate. In other cases, the indemnification alone may be sufficient. In addition to the right to require security, a retiring trustee has the benefit of a non‑possessory lien over the trust fund.³

Disagreements on fees

One common scenario on retirement is that there is a disagreement over outstanding fees due to the retiring trustee. What happens if the retiring trustee and the beneficiaries cannot agree on how to deal with the issue? A retiring trustee is usually not permitted to allow resolution of its fee position to delay its retirement, providing adequate arrangements are in place to provide security for any such fees.⁴ This principle is an extension of the retiring trustee’s ongoing obligation to act in the best interests of the beneficiaries. By putting their personal interests in settling their fee position first, they are at risk of failing to exercise those obligations properly.

How and when can the courts intervene in this scenario? In particular, can courts direct a retiring trustee to execute reasonable terms of retirement that make provision for reasonable security? Despite the clarity of the principles concerning a trustee’s obligations when faced with a request to retire, up until the Velloz decision there was limited jurisprudence on this point.

Velloz settlement

The Velloz settlement (the Trust) was governed by Jersey law. The beneficiaries of the Trust were the settlor, his wife and his four sons and their issue. The assets of the Trust were held mainly in property in various jurisdictions and exceeded GBP1 billion in value.

There were two trustees of the Trust, VT and ST; both Jersey private trust companies. The sole director and beneficial owner of VT was the eldest son of the settlor. ST was owned by a family purpose trust and its board of directors included the two middle sons. VT was the sole trustee at the date of the creation of the Trust (before ST was later appointed as co‑trustee) and it was envisaged by the settlor and the family that VT would, in due course, relinquish sole control of the Trust to a trustee more widely representative of the family.

Following inception of the Trust, all adult beneficiaries requested that VT cease to be trustee of the Trust, in accordance with the above wishes of the settlor. After protracted correspondence, VT agreed, in principle, to retire, subject to agreeing appropriate terms of retirement and reasonable security for disputed fees. VT’s co‑trustee, ST, provided VT with draft retirement terms and security, which included indemnification provisions and an undertaking with regards to the ring‑fencing of assets sufficient to meet the disputed fee liability. The retirement terms were agreed; however, VT was not satisfied with the security offered and negotiations between the parties could not result in any agreement.

In light of this deadlock and the detrimental effect on the Trust, ST applied to the Court for directions approving the retirement terms, requiring VT to execute the same and, in the absence of doing so, that VT be removed as trustee. VT opposed the application, arguing that the Court could only order the removal of the trustee and removal, in such circumstances, was inappropriate. However, the Court ruled, having principal regard to the interests of the beneficiaries, that it did have jurisdiction to direct a retiring trustee to execute an instrument of retirement. Here, it felt appropriate to direct VT to execute the terms proposed by ST, failing which it would be removed as trustee. Following retirement or removal, VT would also be required to surrender all Trust property in its possession or control to ST.

In reaching this decision, the Court held that VT had reasonable security owing to its equitable lien, its contractual indemnity upon retirement (as referred to above) and the undertaking given by ST that it would hold in a ring‑fenced fund a sum necessary to resolve VT’s claim for its fees.

What are the risks for a retiring trustee in unreasonably refusing to retire?

A trustee will often lose the right to an indemnity for its costs from the trust fund (or be ordered to pay the parties’ costs) by reason of their unreasonable conduct in forcing the continuing trustee to bring unnecessary trust proceedings or their conduct in the proceedings themselves.⁵ The risk for a trustee in unreasonably refusing to retire, which results in unnecessary court proceedings, is that they may be deprived of indemnity and ordered to pay the parties’ costs.

In Velloz, ST requested that the Court order VT be deprived of its indemnity and ordered to pay the parties’ costs on the basis that its inappropriate conduct occasioned these proceedings. The Court adjourned the decision, pending determination of the fee dispute.

What are the lessons for trustees?

First, in the usual course, a trustee will be acting appropriately in retiring at the wishes of the beneficiaries. In deciding to retire, the touchstone for the trustee should always be what is in the best interests of the beneficiaries.

Second, it is essential that a retiring trustee understands that their interests in being paid outstanding fees and agreeing on appropriate retirement terms should not take precedence over what is in the interests of the beneficiaries. As the Court stated in Velloz:

‘Delay in retirement cannot be used by a trustee as a means of a leverage in respect of its fees. For a trustee to adopt such a stance is putting its own interests above and in conflict with the best interests of the beneficiaries.’⁶

Finally, a retiring trustee should seek to agree with the incoming or continuing trustee reasonable retirement terms and reasonable security. If there is controversy and disagreement, it will often turn on the security. What is reasonable security will depend on the facts of the particular case. A retiring trustee acting unreasonably may be exposed to costs risks.

A single‑family office (SFO) and its composition is as unique as the fingerprint of the principal who founds it. SFOs and the way they are staffed will vary greatly and will depend on a number of key factors.

Family governance and involvement are key considerations when setting up an SFO. If a family constitution or other similar governing document has been signed, then such document may assign roles and responsibilities to family members, as well as establishing who might partake in the management of the family office (FO) at different levels.

Further considerations include the value of the assets to be managed and whether the investment management function is to be performed internally or outsourced. Similarly, reflection around the type of assets to be managed will affect staffing requirements. Business assets may need to be handled by an individual with knowledge of the family business, whereas personal assets that include special assets such as jewellery, precious metals, digital assets or collectibles may require the assistance of an external expert for their storing, insurance and proper management.

The jurisdiction in which the FO is established might have specific exemptions or requirements for local hiring, applicable to FOs. Thought should be given to immigration planning and local regulatory requirements for directorships, the filing of accounts, licensing, audits, the holding of annual general meetings, economic substance, tax returns and registers.

Philanthropy is often an important consideration for an SFO. Unique anti‑money laundering and know‑your‑client requirements pertaining to philanthropic structures and the assessment of charities may well require staff with specific experience, or the engagement of a compliance service provider to help the SFO navigate around these often‑complex conditions.

An SFO setup is often quite informal and might include heads of different asset types reporting to a trusted advisor to the family principal, a chief executive or head of FO role. This person will often act as the conduit between external providers and the family members themselves.

Outsourcing

Depending on the size of the FO, many of the functions mentioned above may be initially outsourced with some roles to be internalised as the FO grows and expands its team.

It is common to see the segregation of duties between FO staff and providers, such as a private bank or a licensed trust company. Where there is a segregation of duties, it is often useful to establish service level agreements (SLAs) between entities so there is a clear definition of services, and which party is responsible for their delivery. These SLAs, alongside a clearly defined business plan, will help the FO determine what roles they wish to onboard and which they choose to outsource as the business grows and changes.

The right fit at the top

As in all organisations, having the right people in the right roles is integral for the success of an SFO.

Many job postings for ‘head of family office’ or similar titles list requirements for applicants that almost seem unattainable. For any one person to possess all technical abilities and experience in multiple practice areas is extraordinarily rare. Therefore, hiring the right person often takes time and patience, with a level of compromise to be expected.

SFOs must hire individuals to run their operations with a background in the areas most important to them, but also with a willingness to learn about subject matters with which they are unfamiliar. These generalists should possess a keen sense of risk in order to assess when more formal advice must be taken or a subject matter expert should be called in to assist on a particular transaction. The applicant’s moral and ethical standards, as well as their emotional intelligence, should be assessed alongside their professional qualifications to ensure a good fit with the family’s beliefs and practices.

The promotion of and adherence to the ethos of the FO and ensuring staff morale and productivity are key responsibilities of the ‘head’ of the SFO. Thought should be given to the succession of these key individuals so that knowledge, experience and values are not lost to the organisation should a change in this role occur.

Measuring the success of the SFO

As in other businesses, FOs should consider solid goal planning and employee review strategies alongside their financial forecasting and budgeting. Employees need to know what is expected of them and must be clear on objectives and specific targets they are expected to meet. Unless roles are clearly defined, there can be a tendency for overlap and, conversely, gaps in the performance of certain duties.

The success of FOs might be measured on the analysis of financial return, but may well also include personal educational advancement, effectiveness of communication, adherence to family beliefs and delivery of philanthropic efforts and community support. Individuals need to be willing to work toward financial and non‑financial targets and objectives.

A desire to get back to normal begs the question: what does ‘normal’ mean? In the family business world, the answer is important for advisors who want to provide effective help and avoid causing harm.

In this context, ‘normal’ is defined by the prevailing norms (or standards) in a particular family business. For example, members of a successful crime dynasty might consider it normal to commit nefarious acts that others would condemn because they contravene societal norms. Such a family may consider societal norms to be bad for business and, for them, it would be abnormal to refuse to support the family enterprise.

This highlights two elements of a norm. First, there is no guarantee that it will be morally virtuous, and second, norms encourage conformity.

In every family business, conforming is likely to bring praise for fitting in and possibly recognition in the form of a job offer, promotion or a share of ownership. Those who refuse to conform and even seek to change prevailing norms are more likely to be criticised for being awkward and be excluded from opportunities because of their disruptive behaviours.

Identifying norms

The existing norms in a family business can be discovered through observation and enquiry. This due diligence is a vital task for advisors because these norms will influence how a family responds in challenging situations, such as succession planning.

For example, if several generations of a family business have adopted primogeniture as a succession principle and every family member who has sought employment in the business has been hired, the observable regularity of these behaviours is a clue as to what will happen the next time these decisions arise. This is not to say that advisors should not suggest alternative approaches for a client to consider. It is always helpful to give family businesses new ideas and information, but the risk of harm arises when this is the limit of what an advisor offers and no attempt is made to enter the client’s world and to understand their existing version of normality.

The impact of recommending that a family business abandon their normal practices and adopt others could be harmful. Consider telling a family that they should abandon their tradition of primogeniture or base employment decisions on talent rather than lineage; this scale of change is unlikely to be easy.

Therefore, it is always important to understand the norms that a family business uses to give meaning to their world. It is worth making the effort so that any advice seeks to improve a situation as understood and defined by the client, rather than advise a course of action based on external versions of so‑called normality that could be harmful to the client.

What about values?

There is a lot of coverage about the importance of a business creating a values statement. Not many families start businesses by writing down their values and several continue successfully without ever doing so. However, this absence does not equate to an absence of norms that govern relationships among a family and between them and their business.

Values are principles we choose to adopt and express what we aspire to become. Chosen values will be used to assess pre‑existing norms, which may result in some of them being reinforced, adapted or, in some cases, rejected in order to promote behaviours that are valued because they are considered to be better. For example, while a family business that sticks with the principle of primogeniture would consider it normal, the younger generation might wish to abandon this norm in favour of valuing talent over birth order. If, in contrast, the family choose to value tradition and pragmatic success over modern ideas, they might decide to stick with primogeniture.

Although values may be plucked from thin air, perhaps because they sound wholesome and have good optics, it seems more plausible that the values chosen by an enterprising family will have a connection with their existing norms of behaviour.

The linkage between norms and values requires exploration. For the moment, however, getting back to normal means encouraging families and their advisors to identify existing norms and consider them as a useful guide to the future.

 

A key challenge facing families and their advisors is how to balance the various competing considerations that are fundamental to effective succession planning. Focusing too much on any one factor is likely to lead to others being neglected, with potentially disastrous effects. There is no one solution to resolving this conundrum. Where the precise balance is struck for any particular family is a very individual matter.

Indeed, to the extent there is a general overriding principle, it is that any approach needs to address the specific context, aspirations, needs of and, unfortunately, tensions within the family concerned.

So, although the eventual outcome will be different in each case, the approach used to get there and the issues that need to be tackled are more universal. This article highlights some key considerations that are likely to arise.

Are financial considerations being given too much emphasis?

Clearly, financial planning, including tax mitigation, is an essential part of any succession strategy. However, it needs to be seen as something that informs the discussion around the various available options rather than dictating them. Issues that can arise when these considerations are given too much prominence are as follows:

• Inheritance tax planning that focuses on passing assets to younger family members in a tax‑efficient way when those younger family members have no interest in owning those assets. These could be a historic family home or shares in the family business.
• Moving assets to the next generation for the purposes of tax planning while ignoring the related risk of removing the drive and ambition of younger family members by allowing them access to large sums of money at an early stage (and potentially depreciating the value of the asset).
• Financial‑planning decisions being taken for the benefit of younger generations, but without any real discussion as to what those younger family members want or aspire to and ending up with a result that is generally unsatisfactory.
• Having assets tied up in complex and unwieldy structures that create their own problems in terms of ongoing administration and compliance or complicating future planning, potentially preventing those assets from being effectively enjoyed by family members in accordance with their needs or wishes.
• Aggressive tax‑planning strategies are particularly susceptible to changes in tax law and policy. This can lead to various consequences ranging from the financial (an unexpected tax bill or the expense of further structural change) to the non‑financial, such as reputational damage.

Legal and personal relationships

While acknowledging that financial and tax considerations are essential components of any strategy but should not be determinative in and of themselves, how should advisors and families be approaching the wider issues that need to be taken into account?

The basic answer is by discussing them with and within the family. How that is effected will be a matter of judgement in each case and that is, of course, easier said than done.

Important family discussions can be difficult in any context. However, an additional tension here is that although family relationships are primarily personal, they are also legal in a variety of contexts, including trust arrangements, family businesses or administering an estate following death. This tension is exacerbated by these legal issues that come to the fore only during times of personal difficulty or stress, such as death, bankruptcy, divorce or a deep‑rooted family dispute.

It is very difficult to neatly separate these issues as ‘personal’ and ‘legal’. Almost inevitably, the personal relationships and understandings between family members bleed into their legal rights and obligations. Taking family businesses as an example, when considering the position of shareholders, a court may decide that equitable considerations supersede the strict legal position of the parties. Those equitable considerations can include a common understanding between members as to how a company should run.

Family charters

One possible solution to addressing some of these difficulties is the idea of the ‘family charter’. A family charter is not a technical legal document in the same way as a trust deed or articles of association of a company and is best thought of generically as a document that sets out a common understanding between family members on a range of issues.

The potential benefit of the family charter is not so much in the document itself, but that it can provide a useful forum to discuss issues that might otherwise be considered too sensitive to deal with. Reaching an agreed position or even just allowing family members to set out their expectations can be critical in helping to avoid disputes further down the line.

These discussions can also be helpful in terms of setting parameters for the running of the family business and distribution of profits. It may be that certain family members continue to actively run the business and receive remuneration on a pay‑as‑you‑earn basis, while the profits are distributed to both active and non‑active family members. How can those remuneration arrangements be structured so that all family members feel they are being treated fairly? At what point is it sensible to acknowledge, if at all, that the family needs to bring in senior employees from outside the business?

For investment companies, which do not benefit from the same tax advantages as trading companies, there is the added risk of tax events; most notably, the death of a shareholder. That tax event can come at a considerable cost. Planning for these eventualities ensures families are prepared for the future.¹

Family charters may be counterproductive when, either through a refusal or reluctance to engage by the family concerned, the process becomes overly formal and driven by advisors rather than the concerns of the relevant family. For a family charter to be successful, it is not enough for the family to decide that one is required and instruct advisors accordingly.

To what extent can all family members engage in this process?

Attempting to discuss these issues and formulate a general strategy for succession planning can be particularly challenging if there are gaps in the knowledge and experience of family members.

This is a common observation often framed in the context of the need to educate younger people about issues both within and without the family, including the nature and scope of the family’s wealth and assets, and issues such as philanthropy, wealth protection and economic and financial planning. Those considerations are all relevant and important, but personal decisions about when and how to take this forward with individuals need to be managed very carefully. Some people will find it easier than others to process the idea of their family’s wealth and their personal entitlement to it at a young age.

This is not just an issue for the younger members of the family, however. Older generations, particularly in families who do not have a history of managing the transition of wealth, may find it difficult to navigate the complex issues that arise. Even for those with legacy wealth, the fast pace of change may mean that their assumptions about how to proceed are not necessarily appropriate for discussions in 2021.

Conclusion

Discussions about succession planning do not just have to be (and should not just be) about tax or finances. Although those are essential issues to address, a successful succession strategy needs to take a wider variety of considerations into account. Often, the only way to progress will be through dialogue. These conversations can be an opportunity to help clients have conversations with their families before they become difficult conversations. Advisors can play a key role in formulating and cementing a plan for the future that all family members can play a part in, whatever that part may be.

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The succession of a family business can be a challenging time. When handing down the reins through the family, emotions can be one of the most influential underlying mechanisms in determining the next leader.

To investigate the role of emotions in chief executive succession, a study was conducted that monitored the emotions of those involved in the succession process in 20 family businesses.¹ It was discovered that successors experience a wide range of ambivalent emotions, both positive (pride, joy) and negative (anxiety, frustration). The simultaneous activation of both positive and negative emotions creates emotional ambivalence. The research shows that ambivalent emotions typically arise during chief executive selection and integration, and will depend on the nature of relationships between the family and the firm.

Ambivalent emotions in context

Although in some family businesses the family and the business spheres largely overlap (i.e., a ‘fusional’ family business), in other firms the two spheres tend to be either more ‘balanced’ or more ‘disengaged’ (even distant) from one another.

Chief executive successors experience a wider range of ambivalent emotions in a fusional family business than in a balanced or disengaged one. This is because in a fusional family business there is greater cohesion and emotional intimacy between family members, which leaves little room for privacy and independence, and this intensifies both ambivalent emotions and emotional transfer from private to professional settings.

In a balanced family business, boundaries between work and private life are set more effectively, enabling chief executive successors to preserve close relationships with the incumbent without feeling overwhelmed by emotional pressures coming from the incumbent.

In a disengaged family business, however, chief executive successors experience less ambivalence due to the significant separation between family and professional spheres and roles, which offers them a great deal of independence in decision making.

Besides ambivalent emotions towards the family business and their future leadership role, chief executive successors may feel mixed emotions towards all family members.

Ambivalence towards the father/incumbent

This emotional ambivalence is common in fusional family businesses, quite rare in balanced ones and absent in disengaged ones.

During chief executive selection, the overlap between the role of child and that of successor can generate mixed emotions of admiration for the father’s achievements and anxiety due to the risk of failure as a leader compared to the father’s example.

During the appointment of a chief executive successor, successors may also feel mixed emotions of gratitude at being entrusted with the responsibility of future leader and exasperation at the little room for manoeuvre they have in their new role because of the incumbent’s pressure to comply with their expectations.

Ambivalence towards the mother

In fusional family businesses, there may be ambivalence towards the mother. Successors may feel gratitude towards their mother, rooted in childhood experiences. However, this can be mixed with feelings of disappointment, as some mothers might have put their perceived ‘mothering duties’ second after the family business’ interests.

Ambivalence towards siblings and cousins

More commonly in fusional family businesses, and rarely in balanced family businesses, successors may confess mixed feelings of guilt, envy and sadness, as opposed to positive emotions like tenderness towards younger family members.

Being chosen as a future leader over siblings and cousins may give rise to pride, but also to culpability, which breeds discontent.

Legitimacy versus emancipation

The management of ambivalent emotions by chief executive successors operates in relation to two main objectives pursued throughout the succession process: legitimacy and emancipation in relation to the incumbent.

When a successor wants to be recognised as a legitimate leader, they tend to deploy defensive strategies for managing mixed emotions, such as avoidance or compromise, aimed at securing social approval and ensuring incumbent support. Chief executive successors’ efforts to mask their true emotions while displaying what they believe to be an appropriate public face are seen as essential to achieving a leadership position. Indeed, this seems to help them preserve familial harmony and strengthens, in the eyes of the incumbent, the successor’s legitimacy as a new leader.

When, on the contrary, a successor wants to strengthen their autonomy of choice and action, they tend to deploy confrontational strategies for managing mixed emotions to show others that they are different or even better than the incumbent. This puts stress on familial harmony but contributes to the successor’s emancipation from the incumbent’s expectations and power. Emancipation, however, requires courage and runs the risk of damaging family relations with the incumbent.

 

Assets belonging to Swiss family offices (FOs) have been one of the growing segments for private banks in the past decade. Swiss banks propagate client‑centric and value‑creation advisory services, such as exclusive bespoke solutions with the aim of becoming the ‘house bank’ of these FOs.¹ However, studies indicate that there are different understandings of client centricity and key factors that influence trust in such banking relationships. The studies also show that trust in banks has suffered considerably since the global financial crisis in 2007/2008, due to mismanagement.²,³

This difference in conceptualisation of client centricity between Swiss FOs and banks may be one of the reasons leading to an important depletion of trust in such delicate business relationships, simply because the expectations of the FO are not adequately met. The consequence of such situations is the necessity of adopting strategies of trust repair if the aim of both parties is to have a continued business relationship. This aspect of trust in an interpersonal dyadic business relationship is further explored below.

Trust, trustworthiness and trust antecedents

There are more than 70 academic definitions of the concept of trust,⁴ which vary in accordance with the focus of the respective scholarly discipline. One definition is frequently cited for the purposes of this article: ‘trust is a psychological state comprising the intention to accept vulnerability based on the positive expectations of the intentions or behaviour of another’.⁵

There are different types of trust, such as basic and active trust, that require continuous reconfirmation of their status based on previous interactions.⁶ Trust is a key concept in relational exchange and is an important construct catalyst in many transactional relationships.⁷

‘Trust is a non‑material asset on which material success depends’⁸

Several marketing relationship studies have found that trust leads to longer, more stable business relationships,⁹ which is what a bank would strategically need to aim for if it were to become the ‘house bank’ of any FO. It is important to note that trust is not discussed here in terms of equities law and involves the process of the trustor trusting the trustee, whereas trustworthiness is a quality pertinent to the trustee,¹⁰ indicating that both are different constructs.¹¹

Trustworthiness, which includes the attributes of ability, benevolence and integrity of the trustee,¹² is a strong predictor for a trustor’s decision to trust.¹³ There are many antecedents or key factors of trust, which are preceding conditions or events that can potentially influence trust, such as the attributes mentioned above: predictability, reputation, consistency, service quality, timeliness and so on.¹⁴ Each antecedent can have a different impact on trust, depending on the context. Trust researchers, who are familiar with these complex intricacies, can be of valuable assistance in the process of trust restoration.

Restoration of trust

In the five‑stage trust lifecycle, typically consisting of the acquaintance, build‑up, continuation, deterioration and termination phases, the restoration of trust often becomes crucial during the continuation and deterioration phases. In these two phases, damaged trust can still be salvaged and the consequences of doing nothing may be detrimental to the business relationship. Studies indicate that broken trust can be restored and that the outcome depends on the response and actions of the violator.¹⁵ Regulation can support the restoration and enhancement of trust.¹⁶ Trust restoration requires the implementation of a systemic framework at all organisational levels, which can be costly.¹⁷

Trust restoration strategy

Restoring trust is a process that involves at least four stages and requires time for due processing.¹⁸

• In stage one, an immediate response is made in respect to the incident. Regret is expressed, an investigation is communicated by the bank to the FO and resources are committed to prevent future reoccurrence.
• In stage two, the critical incidents that led to the disruption of trust and the steps that are necessary to restore trust are reviewed.
• In stage three, reforming interventions of trust, such as the implementation of controls, acknowledgement of responsibility, suspending involved employees and offers of reparations, are proposed to the FO.
• Finally, in stage four, a regular evaluation that assesses the progress and effectiveness of the interventions is undertaken between the FO and the bank.

In all stages, accuracy, timeliness and transparency, which are also antecedents of trust, are critical to supporting a positive outcome.¹⁹ Inaction, in respect to a lack of immediate response, can be very damaging.

Conclusion

The process of trust restoration must be actioned early. It is lengthy, delicate, uncertain and resource‑intensive. Trust restoration is a critical management competency and can assist in repairing the trustworthiness of a bank if actioned in a timely manner. The management of tension between the need for a timely response and the time to ensure due process is often underestimated and not communicated adequately to the client. The intent of rebuilding trust alone is insufficient for restoring trust. Specific action must be implemented and communicated regularly to the FO in question. Reducing the disconnection between the FO’s needs and the strategic goals of the bank ensures that the relationship manager provides objective expertise with trust‑based value added to the end customer.

 

It is generally acknowledged that family businesses contribute a significant percentage to global gross domestic product (GDP). In many countries, they are the backbone of the economy and are often the largest employers in the private sector. For example, a report by the Institute for Family Business Research Foundation estimated that in the UK, family businesses contributed 31 per cent of total GDP in 2018.¹ This activity was generated through 5.1 million family‑owned businesses, representing 87.6 per cent of private sector firms and employing 14.2 million people, more than half of all employees in the private sector.²

From sole traders to multigenerational global enterprises that have existed for hundreds of years, all tend to be long term in outlook, patient in growth and conservative in financing. This mixture underpins their longevity, but striking the right balance between inherent caution (particularly of founders) and the natural desire for growth and diversification by the next generation can be a challenge. This article will look at how international expansion, with preparation and the support of good advisors, can meet the varied aspirations of family members, maintain cohesion and create new sources of revenue, markets and networks.

Why expand internationally?

Germany’s Mittelstand companies are often held up as the benchmark for innovative, family‑owned businesses.³ They typically focus on a niche market, aim to be world class and have an export‑oriented, global outlook. All countries have these types of companies, but nowhere else is there such a concentration, with a proven model based on highly effective apprenticeship systems, lean hierarchies, long‑term horizons and flexibility. The benefits of all these traits are amplified by the desire for international expansion and growth, evidenced by Germany’s consistently high current‑account surpluses.

Why should a family business expand internationally? Some of the more typical reasons that apply to all businesses include:

• being closer to existing customers;
• understanding trends;
• diversifying markets;
• reducing trade friction; and
• increasing global brand exposure.

However, for family businesses in particular, an additional reason is that it can help to maintain family unity by involving the next generation, giving them the opportunity to realise their full potential within the family enterprise. As many families educate their children in colleges and universities outside their home country, this results in them making close friendships with fellow students from all over the world who, unconstrained by family obligations, seemingly have the liberty to pursue their own careers and ideas. This natural evolution at the beginning of a career might encourage a wish to live and work in another country, maybe for broader life experiences or to be involved in ventures unrelated to the family business, especially with the attraction of the rapid growth of tech and digital start‑ups. These ambitions can, however, become a cause of friction with the founder/principal, as their expectation might be for full participation in the family business, especially if they feel that the opportunity to be educated abroad was only because of the success of the original business in the first place. Feelings of ingratitude can arise, and the expectation of family loyalty can clash with a budding Sheryl Sandberg or Steve Jobs.

However, a well‑planned, international expansion strategy can give a platform for these aspirations by maintaining engagement and growth for the next generation. It does not necessarily have to include setting up a distinct venture, but could take several forms in relation to the existing family business, such as opening a new operation, expanding a franchise or seeking joint‑venture partners. It is important for all parties to communicate their thoughts and ideas, discuss plans and aim to cooperate in the realisation of any international ambitions. If a new venture is contemplated, the family can provide capital, whether or not it is related to existing operations, through a vigorous business plan assessment process.

What can go wrong and how to avoid mistakes

Any cross‑border investment carries risk. Assuming that the decision to expand overseas has been based on market research and assessment of the financial/investment risk involved, it is important to note that a lack of knowledge of local market norms, cultural practices, regulatory environment or, quite simply, hubris can still derail efforts. A business can be a leader in its home country, and may have been for generations, but entering a new jurisdiction requires the ability to adapt to local conditions from the outset. Some areas requiring particular attention are:

• visa requirements;
• type of legal presence;
• employment obligations;
• licensing regulation;
• contract law; and
• tax compliance.

Assistance should be sought well in advance of any commitment of capital and resources. This can be from local government agencies and chambers of commerce, as well as engaging professional advisors to navigate the various legal and regulatory hurdles. These advisors would ideally have knowledge of both the home and new markets to be able to identify areas of risk and efficiency. Furthermore, the engagement of third parties for certain administrative tasks such as payroll (which will have significant local compliance requirements), as well as accounting and banking, can assist in reducing the initial investment and commitment until the project has grown to a sufficient size to bring these services in‑house. This will allow management the time to concentrate on the strategic and operational aspects of the expansion plan.

Structuring and succession planning

The international expansion of a family business will bring challenges and opportunities in relation to the structuring of operations and related succession planning. The interplay between local and overseas tax systems, inheritance laws and norms should be considered and, often, a new holding structure may be advantageous. This would usually involve an entity in the new market itself and may also include a vehicle in a neutral jurisdiction to allow for a more flexible approach to expansion and involving external parties. Further, political and regulatory considerations may result in the family wanting to keep their international businesses separate from local activities, so the ability to set up a holding company in a well‑regulated, neutral jurisdiction becomes even more attractive.

Consideration should also be given to a review of existing succession plans in the light of a significant overseas investment. If a plan is not already in place, an international project should be the spur needed to address critical decisions relating to asset protection and transfer of family wealth to the next generation. There can, for example, be a separation of local and international assets and a balance may be struck between family members who have branched off and developed new ventures and the wider family enterprise. In particular, trusts and private trust companies can give the flexibility required to achieve this balance and have proven to be effective, especially for multi‑asset, multigenerational international families that have significant operating business interests.

There is no one‑size‑fits‑all approach and communication between parties will be essential in order to avoid misunderstandings. It is critical for professional advice to be sought when creating and implementing any succession‑planning structure.

Carpe diem

International expansion for family businesses can be an ideal strategy to increase market share, grow a brand globally, diversify revenue streams and expand business networks of customers, suppliers and potential partners. It can also be an excellent opportunity to develop the involvement of family members and ensure there is as wide a canvas as possible within the family enterprise to keep generations engaged, balancing obligation and loyalty with personal purpose and fulfilment. Succession plans can be created or adapted that allow for this equilibrium to be maintained. Once a track record has been established internally, it can be used for future overseas ventures, whether by family members or non‑family managers. Meeting the inevitable challenges with the support of professional advisors and third parties is part of the excitement and potential rewards for successful international expansion.