It starts with defining vision and purpose. We are usually solicited to start with a limited scope of mapping the needs and purpose of the client. Understanding their expectations and targets. All of this is summarised in basic, simple questions: What are your investments? Who are your investors? Completed through a multitude of considerations such as geography, strategy, industry, risk appetite, return horizon, ESG and many more elements that are crucial to define the set up. It’s key to extend by interviewing the various involved parties, investors and **UBOs, target investments, existing and future staff.  Next step is to help the client build the foundations and design to ensure all components work together seamlessly. 

Choosing the right structure and set-up can make or break the project, and save considerable amounts of money, sparing everyone years of frustration. 

Francis Parisis, managing director and head of business development managed services, PwC Luxembourg

This process will best serve the project’s needs and make certain the client is future-ready and shock resilient. Choosing the right structure and set-up can make or break the project, and save considerable amounts of money, sparing everyone years of frustration. 

Throughout the process, keep the number of advisors limited, and focus on the preferred design and set-up. Once the initial analysis has led to preliminary conclusions, it is time to look at next steps including:

·       Designing legal and tax structures

·       Technology enablement options

·       Planning and establishing governance needs

·       Tax efficiency & CRS profiling

The next phase is for design. This involves the clarity to envision the necessary structures to fulfil the purpose and vision, as well as protecting and growing the clients’ – and their investors’ – legacy.

·       Design core services (in-house and outsourced)

·       Addressing operations and technology needs

·       Defining staffing requirements

·       Budgeting

·       Establishing reporting requirements 

·       Ensure proper controls are in place

·       Identifying technology needs

select and contract vendors and support

Insourcing or Outsourcing?

Implementing the solutions and preparing the operational readiness, from back to the front, will not only depend on objective decisions, but also subjective matters such as people’s opinions, perception of cost, reputation that will lead to the right or wrong decisions and market trends. No matter whether the client opts for an insourced, co-sourced or entirely outsourced model for the majority of the tasks that need to be performed, the decided outcome will define the many years to come. 

It is a hard call to make based on what the market does, the client’s peers, the competition, etc. In the many years of larger and smaller companies, there is not a single standard thread to be observed. Some start by insourcing all the core back office functions such as fund administration, corporate secretarial, investor reporting, while a few years later it is decided to find a firm that can provide these services. Quality, control, risk and other very important elements often determine the course. These companies after all have a key impact on the client firm’s reputation. Performing a full due diligence on service providers is a conditio sine qua non to make the right choices. 

Building an enterprise that is future-proof will make it thrive on the relationships and reputation that it has created with its clients, investors, advisors and services providers.

Francis Parisis, managing director and head of business development managed services, PwC Luxembourg

It goes without saying that in a world of digitalisation and automation – an environment where there is an abundance of proposed solutions – it is essential to have the solutions fit the client and not the client having to fit the solution. Common errors are often due to “too much, too fast” and “lack of structural flexibility”. Rome was not built in a day The same applies to creating a new wealth management company. The ultimate result will be a continuously evolving and improving ecosystem of people, solutions, advisors and service providers. 

Building an enterprise that is future-proof will make it thrive on the relationships and reputation that it has created with its clients, investors, advisors and services providers. The latter is a choice that is largely underestimated, as everybody has somewhat a similar proposition. Once you start looking behind the scenes, and start scratching the surface, better decisions can be made. People, technology, long term vision and relationships are a natural part of the business, yet it is not always the easiest combination to find. 

*An ultra-high-net-worth individual (UHNWI)

**ultimate beneficial owner (UBO)