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