:00:00. > :00:09.Now on BBC News, The Bottom Line with Evan Davis.
:00:10. > :00:16.There are a couple of thousand billionaires in the world, a couple
:00:17. > :00:20.of hundred thousand wealthy individuals of assets of $30 million
:00:21. > :00:24.or more. How do you get money out of those people? You may be able to
:00:25. > :00:29.think of a number of ways, but one is to work for them, sell to them,
:00:30. > :00:33.serve them. As the rich get richer, many people are finding themselves
:00:34. > :00:37.doing just that. Businesses large and small are having to meet the
:00:38. > :00:43.demands of ultrahigh net worth individuals. Today people here about
:00:44. > :00:48.some of those businesses and about life on planet super`rich. Each
:00:49. > :00:54.week, influential business leaders gather in London at the BBC Radio
:00:55. > :00:59.Kent programme, the Bottom Line and you can see it as well as he wrote.
:01:00. > :01:12.`` as well as listen to it. Three guests with me around the
:01:13. > :01:14.table representing businesses serving the super`rich.
:01:15. > :01:26.Richard Wilson, the CEO of Billionaire Family Office. Based in
:01:27. > :01:32.Portland, Oregon. You will have to explain at the outset what is a
:01:33. > :01:40.family office? We help manage the capital of people
:01:41. > :01:43.with a lot of money. A dedicated team who takes care of all aspects
:01:44. > :01:55.of your capital. A kind of financial advisor?
:01:56. > :02:03.Yes. Many things under one roof. We all talk to each other closely. That
:02:04. > :02:06.is the extra value we provide. There are Single`family office is
:02:07. > :02:10.and multi`family office is. What is the difference?
:02:11. > :02:15.A single is dedicated to one individual or family, but a
:02:16. > :02:20.multi`family office serves many different clients. They must
:02:21. > :02:23.register depending on which Government you have. They could
:02:24. > :02:27.serve 200 clients work to clients, but that would make them a
:02:28. > :02:32.multi`family office. So, I am Rich and I have my own
:02:33. > :02:38.office and they are looking after my finances. That is a Single`family
:02:39. > :02:43.office. My staff, entirely private. But they might come to you as well
:02:44. > :02:52.as an external contractor to help add support?
:02:53. > :02:55.Correct. Why would they come to a family
:02:56. > :03:05.office as opposed to going to a large bank?
:03:06. > :03:11.We could discuss that in a whole show! You have different managers
:03:12. > :03:16.and different teams dedicated to your needs.
:03:17. > :03:19.My next guest. Karen Clark, the Director and Head
:03:20. > :03:25.of Private Clients, SandAire. Another family office. We have 18
:03:26. > :03:31.families that we work with based in London. We have roughly 2 million
:03:32. > :03:41.assets. How rich you need to be to get into
:03:42. > :03:48.your books? ?120 million is what our average family is worth. At our core
:03:49. > :03:52.we are a discretionary investment manager. We manage all of the liquid
:03:53. > :03:57.assets of families. In addition, we spend a lot of time working on how
:03:58. > :04:01.to prepare the family for the money. That has to do with education,
:04:02. > :04:07.engaging with a next`generation, so that they are well prepared. That
:04:08. > :04:13.could be for financial education to other skill sets, such as having the
:04:14. > :04:19.appropriate level of self`esteem. That would be to take on roles as
:04:20. > :04:22.heads of companies, to manage and be responsible for a great amount of
:04:23. > :04:28.wealth. How do you do that? You are helping
:04:29. > :04:36.the younger generation not lose the money that the family has built up?
:04:37. > :04:38.Absolutely. We're trying to defy the worldwide phenomena of shirt sleeves
:04:39. > :04:44.to shirt sleeves in three generations. That means that the
:04:45. > :04:53.first`generation pizza and by the time the third generation comes in,
:04:54. > :05:00.they lose it. `` that means the first`generation comes in and by the
:05:01. > :05:09.time the third generation comes in, they lose it. My third guest.
:05:10. > :05:23.Lucy Challenger, manager of Bespoke Bureau. We have clients who are
:05:24. > :05:30.wealthy. We find them butlers and nannies and chefs. We create the
:05:31. > :05:34.skeleton of the house. We also have the British Butler Academy. We train
:05:35. > :05:39.the staff. More and more we find that people want to come into this
:05:40. > :05:43.industry and do not have the right skills. So we teach them. Then we
:05:44. > :05:50.place them in amazing jobs. Permanent climate? A single night?
:05:51. > :05:57.We do permanent placements, temporary placements, it may be
:05:58. > :06:07.cover for a certain amount of time. On the whole, it tends to be
:06:08. > :06:11.permanent placements. Maybe someone who needs a butler or an estate
:06:12. > :06:16.management for several estates around the world. That of course
:06:17. > :06:21.changes the salary. We will discuss that more. But tell
:06:22. > :06:28.me about the staff. Who are these people? You have the traditional
:06:29. > :06:36.background, hospitality. People who have worked in hotels, restaurants,
:06:37. > :06:43.commercial ventures. The private industry is very different to a
:06:44. > :06:47.hotel or restaurant. In a commercial environment you have set hours. In
:06:48. > :06:53.private industry it is very different because a butler may work
:06:54. > :06:58.an 18 hour shift. He may have two leave at late notice and jump on a
:06:59. > :07:06.private jet to New York on business. Your life is much more involved in
:07:07. > :07:14.the life of the employer. You are much better paid, of course!
:07:15. > :07:17.How much? A good butler at the top of their game can earn anything from
:07:18. > :07:26.?200,000 plus per year. Not bad. But you have to give up a
:07:27. > :07:37.lot of your life? In a way, you become part of somebody else's wife.
:07:38. > :07:41.`` somebody else's life. Tell me about the clients. Who are
:07:42. > :07:46.the? A lot of my clients make their money
:07:47. > :07:50.from operating in business. They perhaps sold their business or to
:07:51. > :08:01.cut public. 80% of my clients come from private sector. That is the
:08:02. > :08:04.same for our client base. Successful entrepreneurs who have sold the
:08:05. > :08:11.business and are looking to do either nothing much or actively
:08:12. > :08:17.looking for additional things to do with their time and money. We also
:08:18. > :08:28.have clients from emerging markets. Places like China, the Middle East.
:08:29. > :08:35.Relatively new money. It occurs to me, you talk about
:08:36. > :08:41.family offices and the staffing thing, it does feel as though their
:08:42. > :08:52.lives may be quite compensated. I wonder whether simplicity isn't
:08:53. > :09:00.something that is useful in life? You people are in a way the hangers
:09:01. > :09:04.on who handled the complexity. I had one client who sat me down and
:09:05. > :09:14.showed me his balance sheets and there were only four items on it. He
:09:15. > :09:18.was a millionaire. He had personal residences.
:09:19. > :09:25.You need someone to manage that and then someone to manage them and
:09:26. > :09:30.someone to manage the managers! Not necessarily. A lot of the gentry are
:09:31. > :09:36.downsizing. They do not need ten staff, just one person in their
:09:37. > :09:46.house. A butler or a house manager who can do all the housekeeping.
:09:47. > :09:50.That is what gave rise to the concept of the family office. It is
:09:51. > :09:57.intended to signify matters. That is one of the things that we do. Most
:09:58. > :10:01.of our clients come in having had experiences elsewhere. They have
:10:02. > :10:05.been other service providers and have a network that they do not
:10:06. > :10:09.understand. Assets that they don't know where those are, they don't
:10:10. > :10:14.know if they are achieving their goals... It is our job to come up
:10:15. > :10:20.with a solution that works for them. Most often, it is quite simple at
:10:21. > :10:28.the end of the day. When it is not simple, it is up to me to manage.
:10:29. > :10:32.One of my clients might be missing millions of dollars and does not
:10:33. > :10:38.know, so he must trust me to check that. He wants to hire people he
:10:39. > :10:49.trusts. This is fascinating. You started on
:10:50. > :10:52.this, Karen, it reminded me of Rockerfeller going to a tailor and
:10:53. > :10:59.Taylor tried to sell him shirts. He said these shirts are nicer. Your
:11:00. > :11:05.sons Bob these. And Rockefeller said that the difference between me and
:11:06. > :11:14.my sons if they have a rich father! But isn't the problem managing a
:11:15. > :11:20.generation? Trying to give that generation the motivation to have
:11:21. > :11:25.drive and ambition in life? That is the primary concern of our clients.
:11:26. > :11:32.Ringing up their children in essentially the same way they were
:11:33. > :11:35.raised, ie without the money. But of course they do have money. It is
:11:36. > :11:39.very difficult therefore to know what discussions to have when, how
:11:40. > :11:46.much do you let them know, when do you let them know? Do you control it
:11:47. > :11:49.beyond the grave? Truss structures? Warren Buffett says he wants his
:11:50. > :11:54.kids to have enough money to do anything but not so much that they
:11:55. > :11:59.can do nothing. I think the problem in trying to treat them like they
:12:00. > :12:04.are normal, is it is kind of impossible to recreate. For example,
:12:05. > :12:08.one client in Monaco had to fly somewhere far away and could not
:12:09. > :12:13.take their normal plane and so they used a commercial plane and his son
:12:14. > :12:20.turned around and said, why are all these people on our plane? These
:12:21. > :12:25.kids have gone to an expensive school, are driven around by a
:12:26. > :12:30.chauffeur, and are visiting multiple countries each year. Their friends
:12:31. > :12:37.do not do that, so it is hard to recreate that situation for them. I
:12:38. > :12:42.had a call from a lady in California who wants her son trained in
:12:43. > :12:48.etiquette so that when he goes to parties he knows how beat the Royals
:12:49. > :13:00.and interact. He is about 17 years old. We are arranging to train him
:13:01. > :13:04.in etiquette. How to present himself as a gentleman.
:13:05. > :13:16.Are you hiring people to bring up children? No. We are giving them
:13:17. > :13:29.skills that the parents perhaps do not know themselves. There are
:13:30. > :13:36.different mannerisms. You do not want to insult or upset people.
:13:37. > :13:38.different mannerisms. You do not want to insult Studies have shown
:13:39. > :13:43.that the extreme wealth for a child can be as bad as extreme poverty. If
:13:44. > :13:49.they are not allowed to go and play with another child... Or taught not
:13:50. > :13:59.to trust their potential girlfriend because she may be a gold`digger...
:14:00. > :14:06.We enjoy things day`to`day without giving it a second thought. You have
:14:07. > :14:18.to understand the messages. Here is a personal question. Somebody noted
:14:19. > :14:23.that con set of SIDs. `` concepts. This is people who walk with other
:14:24. > :14:33.people who are on a different income level to them. Do you think that you
:14:34. > :14:43.are sometimes, is it a struggle? Drinking the offensive line? ``
:14:44. > :14:47.expensive wine? If you're socialising with people and you
:14:48. > :14:52.reach for the cheque, if you are the wealthiest person at the table, they
:14:53. > :14:57.are quite surprised. I think a lot of wealthy individuals think that
:14:58. > :15:03.because they have so much money that it should be on them. They still
:15:04. > :15:17.appreciate and understand the value of money. I think we've got a good
:15:18. > :15:20.idea about the clients you serve. Don't we need to talk about the
:15:21. > :15:24.macro`economics? The problem the world has with the super rich is
:15:25. > :15:31.that it's hard for them to spend the money they accumulate. But we need
:15:32. > :15:36.money to circulate. But we need them to so other people are earning! We
:15:37. > :15:43.can't have the super rich building up and saving all that money? How
:15:44. > :15:49.can we circulate the money? The concern is conserving the capital.
:15:50. > :15:54.It depends on the generation, location and so on. I think you are
:15:55. > :16:08.correct. It's about recruiting staff. To protect the money. Most of
:16:09. > :16:13.the clients we have are paying a fair amount of tax. That contributes
:16:14. > :16:16.to the wellbeing of certain countries. They put money back into
:16:17. > :16:35.the community through their foundations. Philanthropy, is it a
:16:36. > :16:43.big part? For almost all of them. It is not about the benefits of giving
:16:44. > :16:53.back from a tax perspective but most billionaires cannot spend what they
:16:54. > :16:58.are. `` what their assets are. The downsides to communism and insights
:16:59. > :17:03.to capitalism. These are the winds. None of these people want the
:17:04. > :17:10.lottery. They did not inherit all of their money. They are very active.
:17:11. > :17:17.They are always buying and growing businesses. I can see when people
:17:18. > :17:24.have concerns about an economy which is relying on a large percentage of
:17:25. > :17:32.the people who have as much wealth as most of the people on the planet.
:17:33. > :17:38.`` small percentage. What do you think about the inequality? I think
:17:39. > :17:45.it is exciting. The more billionaires than ever before. The
:17:46. > :17:52.industry is booming right now. That is more equality now than there used
:17:53. > :17:58.to be. I think we are all struck by the inequality of wealth which has
:17:59. > :18:02.come to be in the last 20 years. I think that is very little we can do
:18:03. > :18:05.to change that. We are trying to inspire people in the
:18:06. > :18:10.next`generation to make the right decisions so that those who have
:18:11. > :18:16.great wealth also have great influence and use it to good effect.
:18:17. > :18:26.For the three of us, that is what they are trying to do. We are
:18:27. > :18:31.trained to help individuals. Inspiring people and wanting to
:18:32. > :18:39.succeed... If you get a lot of wealth and that is that award. ``
:18:40. > :18:42.the reward. We should be encouraging people to want to work and be
:18:43. > :18:48.successful. Our clients are role models. The biggest criticism would
:18:49. > :18:54.be around the existence of the super`rich. Working for the
:18:55. > :19:04.super`rich now that we have them. It does feel as if you read one of
:19:05. > :19:10.these 19th`century novels... It does feel as though the world has entered
:19:11. > :19:21.or returned about to that kind of past. Even the word Butler, what do
:19:22. > :19:28.you mean? He is a wealth of information and support. He runs the
:19:29. > :19:36.beautiful house and make sure that the life is easy. One of our clients
:19:37. > :19:44.did not know where to shop or eight. `` eat. His Butler gave an insight.
:19:45. > :19:57.She told him where to go and where to eat. `` He. I can think about
:19:58. > :20:05.things that the world needs to do right finding a cure for malaria.
:20:06. > :20:15.But in terms of inequality, the big growth businesses and top end retail
:20:16. > :20:23.is oriented towards where the money is rather than were the leaders. ``
:20:24. > :20:29.where the need is. Wouldn't it be good if we get not worry about that
:20:30. > :20:34.handbag and we could be slightly more concerned about something like
:20:35. > :20:41.the cure for malaria? You do not want to shut down wealth creation so
:20:42. > :20:46.how do you deal with that? People with money also have to have fun.
:20:47. > :20:50.They could be working on the cure and fitting and millions and
:20:51. > :20:58.millions that they would also like to go on holiday and Spencer team at
:20:59. > :21:10.the children. `` spend some time. Some people are spending their money
:21:11. > :21:19.and child to spend it faster. Some people cannot find enough things to
:21:20. > :21:26.buy with their money. If you look at what Bill Gates has done, it is
:21:27. > :21:34.remarkable and it has brought a lot of attention to how much giving away
:21:35. > :21:47.has in contrast to just waiting for your death. Bill Gates is pretty
:21:48. > :21:54.good. Not all of them are passing along all of their wealth of giving
:21:55. > :22:00.it away. The children are not merely conspicuous consumers. Some people
:22:01. > :22:04.listening with think I would never want to do what you are doing. There
:22:05. > :22:09.are others who are probably thinking this is a good line of business. It
:22:10. > :22:19.is growing. They might think this is where the money is. How do you
:22:20. > :22:25.start? You don't cut your teeth on office clients. You progress in
:22:26. > :22:31.terms of financial services or the private bank. But it is not an easy
:22:32. > :22:39.world to get into. It is all about the trust and this is not the nine
:22:40. > :22:44.to five job. I have spoken to my clients at 2am and 4am. If you are
:22:45. > :22:48.not cut out for that then it is not the right place for you. You will
:22:49. > :22:54.not go anywhere. If they can't get a hold of you when the energy you have
:22:55. > :23:02.violated the trust. You have to be on the terms... We are not servants
:23:03. > :23:15.and we are not yes`men but there are boundaries. You have to know what
:23:16. > :23:23.you're getting into. It is growing and growing. Our clients can look at
:23:24. > :23:29.our website and contact us. They like to mix with each other because
:23:30. > :23:36.what they are doing is increasing and meeting billionaires to
:23:37. > :23:39.billionaires. Once you have placed somebody in one house and they trust
:23:40. > :23:46.you then do a friend will trust you as well. Their neighbour. So it
:23:47. > :23:53.goes. It is looking to a different world and it is fascinating. But we
:23:54. > :24:01.do need to draw to a close. My guest today were Richard Wilson, Karen
:24:02. > :24:09.Clark and Lucy Challenger. Thank you. That is the last in this
:24:10. > :24:15.current series. I hope you enjoyed listening. Downloads are available
:24:16. > :24:43.online. Good evening. It has been a weekend
:24:44. > :24:50.of contrast. For many people it has been lovely with the sunshine but
:24:51. > :24:52.unfortunately it has not been like that for everybody. It has been the