Future of family offices: less isolation, more customization, says Tina Di Vito

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When Tina Di Vito started working with wealthy families 25 years ago, neither she nor the firm she worked with affixed the label “family office” to any of the services they offered.

“We were simply serving the needs of wealthy families, most of whom owned a business,” Di Vito recalls. “We never said we were offering ‘family office services’ – no one really did back then, unless you were one of the few single-family offices in Canada.”

Fast forward to 15 years later, when Canada’s family office industry was starting to take shape. By then, Di Vito was working in a big bank’s family office division, a role that led five years later to a position as a partner and national leader in an accounting firm’s family office practice.

Today, Di Vito is a partner and Canadian family enterprise leader at EY in Toronto. Here she shares her perspective, shaped over two-and-a-half decades, on wealthy families and family offices.

You’ve been a family office specialist for many years. How has the industry evolved?

Years ago, family offices were supporting the needs of a single family. But in recent years, we’ve been seeing more families – who don’t have the level of wealth to have staff working for them – exclusively get together with other families to share resources.

We’re also seeing single-family offices talking to each other more than they did in the past. They’re still very private, but they do have more communication among themselves, wanting to know how each other is doing and what lessons they’re learning.

How have clients’ need evolved?

Clients’ needs have become far more complex today. There are far more options for families of wealth, including international investments and ownership of international properties. So they’re also dealing with more complex rules around income taxes, foreign property ownership and investments. Global mobility has also added more layers of complexity, both in family and business matters. For example when a family has operating businesses in various parts of the world, how do they manage the reporting of all those assets?

Canada now has seven living generations. What are the implications of multi-generational families – potentially with three generations or more – for high-net worth Canadians?

With people living longer than they were a hundred years ago, we’re definitely seeing shifting priorities among multi-generational families. It’s no longer just about which family members will work in the business or which child will take over the business.

With so many generations in the family, and with children who have been given opportunities for global education and outside work experience, you now have all these inheritors of wealth who may not know how to make decisions together as a family. Governance and decision-making frameworks become even more important – this is something that family offices need to really focus on.

And what are the implications of having more living generations from a wealth preservation and stewardship perspective?

Stewardship is something that’s relatively new in Canada. It’s hard to teach – you have to model it. The best way to do that is to have multiple generations working together under the common goal of taking care of the family assets, to grow and preserve them for the next generations. The generation close to the original wealth – the wealth creators – come with an understanding of seeing their parents struggle as they built the business. When grandchildren are in the mix, they’re far removed from the history of the wealth because they didn’t see their grandparents building the business.

So the big challenge is getting everyone to understand the family history, the vision for the original business, the ups and downs. I encourage families to bring the knowledge down to the next generations so they understand the history behind the family wealth. That way it becomes much more than something they were born into. You can’t have stewardship if you don’t take pride in your history.

Clients will become more in tune with having a hand in shaping the family office. It will be less of a one-size-fits-all.

Every generation has its own characteristics. What do we know about the emerging generation of wealthy Canadians?

We did a global survey of single-family offices, and one of the findings was that in multi-generational families, the next generation is looking at family offices and saying, “How do we measure the value that this family office is providing us? It’s no longer good enough to measure just by looking at investment growth.” This next generation is looking at ESG and how the family measures itself against its own ESG values. It makes sense.

The generation who created the wealth was more focused on cash flow and building that wealth and ensuring it’s going to be there through generations. The next generation sees that the wealth is there and starts to look beyond. They’re asking, “What is our purpose?” The younger generation is more connected, they have a global view, they’re seeing things almost in real-time and are much more reflective around the question of “How are we contributing to society?”

What are some new or emerging trends in family offices that are significant or impactful to family offices and their clients?

One of the biggest trends definitely is technology. Many families set up their offices a decade or so ago, so the technology infrastructure they have in place may not be the best for them today.

Technology plays a big part in keeping multi-generational families informed and connected, through things like day-to-day recording of financial information to technology that allows the family to communicate and share information in a safe environment. Technology could also create efficiencies in a family office. Instead of maintaining a staff of 20 employees, it may be possible to produce the same level and quality of work with 10 or 15 employees with technologies that can automate and streamline tasks.

We know that more women are becoming wealthy, with many creating their own wealth from a business or from a successful career, while others are inheriting wealth from parents or a spouse. What do family offices need to do or change to ensure they are effectively addressing the needs of female clients?

I would say don’t make any assumptions about women’s needs from a family office. Just because the patriarch wanted things done a certain way, don’t assume the matriarch has those same goals or needs. Find out what the female client needs from the family office – the reporting, the communications, and investment goals – and don’t make assumptions about her level of knowledge and interest.

In fact, even when the patriarch is still around, family offices need to make sure they involve the matriarch in the conversations and decision-making. So many women today are taking over the family business – family offices have to be ready to meet their needs.

Some family offices charge a fee based on assets under assessment while others charge a fee for service. What should families think about when considering a family office and its billing model?

Most multi-family offices today work with families who have a certain amount of dollars to invest and charge them an asset-based fee. That works perfectly well if the family office’s primary role is to manage a family’s money. At EY, we’re not limited to working with clients with investable assets because we’re not investing and managing their money. I charge fees for professional services – such as governance, annual meetings, accounting or figuring out a family’s values and vision – and we base each fee on the service we’re delivering.

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Families need to think about what they want out of a family office, how often they’ll need certain services, how much they want to pay and how they assess the value they get from a family office. That value is viewed differently from one family to another. For some families, there’s great value in creating a framework for how they behave as a family and how much they contribute to society. For other families, the greater value is tied to financial performance.

How do you see family offices further evolving over the next five to 10 years? What are some of the key factors that will shape the family office of the future?

Canada is a smaller, younger country, and this holds true also in the family office space. I think people will become more comfortable talking about family offices and what they are and what they do. In Europe and Asia there are a lot more single-family offices. In Canada, we’re at the start of this trend and it’s growing really quickly.

I think clients will become more in tune with having a hand in shaping the family office. It will be less of a one-size-fits-all – they will be more active in shaping offices versus the way it is right now, with the industry shaping what the family office looks like. That’s good because, after all, there is a family behind the family office.

Responses have been lightly edited for clarity and length.

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