Strategy at STEP

David Harvey, STEP Chief ExecutiveNext week will be a busy week at STEP in helping shape the future strategy of the Society.

First of all the Board, working closely with STEP staff, will be having a two day planning session here at London headquarters looking at the strategic challenges facing the Society and its members and how best STEP should position itself to help members meet these challenges.

To help the Board through this process they will hear from a variety of ‘expert witnesses’ comprising practitioners in both the offshore and onshore world as well as regulators and major employers. This format was first trialled last year and was highly successful in enabling the Board to take a well-informed view of future likely developments and risks in the industry.

Following the Board meeting, there will also be a full day meeting for England & Wales STEP Branch Chairs. Again the focus will be on the strategic outlook for STEP and our members and what STEP can best do to help our members through a time of rapid change. I am delighted that His Honour Judge Denzil Lush has agreed to speak at this meeting.

Also next week, senior members of the secretariat will participate in the STEP Canada Board Conference call on many of the same topics.

For the team at STEP Worldwide, these meetings are a great opportunity to talk through the key issues facing members and develop a strategy to meet member needs not only for the rest of this year but in the longer term too.

We are always keen to hear from members about the issues they feel STEP should be focused on, what we are doing well and what we could do better. So, even if you are not involved in next week’s meetings, I invite you to get in touch and make your views known.

David Harvey, STEP Chief Executive

Business, family and ownership: working in three dimensions

David HarveyThe Family Firm Institute annual conference is a mixing pot of those who advise family businesses and business families – family counsellors, management  consultants, mediators, accountants, lawyers, psychiatrists, psychologists, academic commentators, a good few family members and, interestingly, consultants who have come from businesses, families. A good few of the above are TEPs.

This year’s FFI conference offered a one-day introduction for US attorneys to advising families. A brave group of soft-skilled FFI members, led by Scott Budge and Roy Kozupsky, together with  STEP participants led by Mary Duke and me, and ably supported by UK family business guru Peter Leach, set out to cover some of the legal aspects, but focusing mainly on how families are different. We covered issues of psychology and chemistry; in essence, why every family business is happy or unhappy in a different way, how that often drives the business and why, to achieve any success with structuring, all of the right questions have to be asked to dig behind the external forms. We focused, too, on the mutually conflicting perceptions of advisors and consultants, using work carried out by STEP in association with the Institute of Family Business. This highlights on the one hand how lawyers can find families and family wealth frustrating and difficult to engage with because of issues of chemistry and blood; and on the other hand, it looks at complaints from the families themselves:

  • the failure to look at the family’s long term ambitions, rather than just proposing the best way of planning a structure and putting in place reasonable mitigation of tax;
  • the failure to look at long-term generational issues in the business e.g. training for the next generation, psychological issues regarding the retirement of those who are stepping back from the business;
  • not seeing the different drivers of family members, including tradition and adapting the business to include younger generations;
  • the interaction of professional, business management, whether family or not, with family owners who don’t work in business;
  • understanding the ghosts in the system — overwhelming influence of a dead founder or the power of ‘non-owning and never seen but extremely influential’ in-laws and partners;
  • the importance of family governance structures e.g. family councils

(You can read a summary of this research here

The Chairman of attorneys for Family Held Enterprises, Michael Hawthorne, also joined us with a rather more hard skills and knowledge-based approach, but adding great interactions, insight and knowledge.

The challenge, though, is that most delegates at the conference were TEPs, and almost every one of them understood the above issues because their trust and estates practice had, at the very least, madeFamily business them both aware and respecting of what they did not know. The audience of attorneys who are oblivious to the drivers of family enterprise were, however, notable primarily by their absence. Yet, anywhere in the world, the practitioner who has at least a holistic understanding of family enterprise and can, at the very least, call in a colleague with soft skills to assist, is always going to give a better service and have a much stronger business model.

Talking to practitioners with family understanding is mutually rewarding and involves learning for everyone, but there are great mass of advisors out there who have yet to realise that business families are three-dimensional combinations of business, family and ownership, and you need to work on all three. Getting that message across is hard work, but also an exceptional opportunity for professional groups who want to offer the right professional development and for professional practices who see the market gap.

Straight from the top – ‘Ask the Chair and CEO’

Helen-and-David‘Ask me anything’ online engagement events are increasingly being used by public personalities and organisations to offer direct responses to questions posed by fans, followers and, indeed, members. In the spirit of talking directly to our membership we, STEP worldwide Chair Hélène Anne Lewis, and CEO of the worldwide Secretariat David Harvey, are inviting you to put forward your questions so that we may answer them ourselves. We will be recording and releasing a global webcast of responses to your questions in September and aim to fill you in on what is happening in STEP, plans for the future, the Society’s role in the changing policy landscape and changes to our educational offerings.

In order to answer as many questions from as many members as possible, we ask that you limit your submissions to no more than three questions. Submit your question here using the subject line ‘Ask the Chair and CEO’. Submissions close on 31 August 2014.questions1

STEP is a professional body representing your qualifications, your fees, your commitment of time and your status as a professional in your field. So this is your opportunity to ask us what STEP is doing for you and your behalf.

Questions, anyone?

Unsolicited e-mail offering

David HarveyTo all Members,

STEP has been alerted to an individual who is contacting STEP members unsolicited by e-mail offering services in connection with reclaiming Swiss banking fees. STEP in no way endorses this service and would advise members to treat all such unsolicited offers with extreme caution. STEP is also urgently investigating if there has been any misuse of STEP’s data.

David Harvey

A second MINT for STEP

David HarveySTEP only has a presence in one of the four fast developing MINT nations – a chapter in Mexico, with no presence for STEP in Indonesia, Nigeria nor Turkey. There are good reasons for the lack of a presence in those last three. STEP is not strong enough to develop everywhere without getting developmental indigestion and, anyway, needs to focus on completing its offer in already established jurisdictions such as the US, Germany and Australia; as well as on building a high standard of consistency across all existing STEP jurisdictions.

However, now certainly is the right time for STEP to carry out initial reconnaissance of future MINT opportunities; in a few years’ time they will certainly be coming to STEP if STEP is open to them, and the first part of openness is knowledge…

Thus when invited to participate in a focused trade mission lead by the Lord Mayor of the City of London, Alderman Fiona Woolf, looking at legal and financial services, the opportunity for medium-term analysis at low cost to STEP was difficult to resist.


Representing the City of London in the broadest sense, the Lord Mayor runs a number of small trade delegations to explore new opportunities for London business. The visit was an opportunity to understand how the fastest growing West Asian nation might be a strong bet in the medium term, but how political uncertainty poses challenge in the short term. Turkey has seen GDP growth at 9%, 8%, 2%, 6% and 6% over the last five years, with a 5.2% average growth between 2002 and 2011. There is now a substantial middle class primarily founded on family businesses grown in Anatolia, as Turkey becomes one of the world’s leading producers of agricultural products, textiles, motor vehicles, ships and transport equipment, construction materials, consumer electronics and home appliances. There is also a big shift from state to private sector, although the state still plays a major role.

Of course, presently Turkey faces political challenges, with the rumbling conflict between secularists and the more conservative supporters of Prime Minister Erdogon, with myriad crosscurrents beneath. It’s no wonder that few of those that I met are looking at big investment decisions this year. Most will wait for current issues to quieten down, yielding hopefully to a degree of greater certainty.

The Turkish legal system is built on a codified approach derived from German law, with rigorous forced heirship, reinforced by Ottoman cultures with Sharia principles. This, of courses, poses an enormous challenge for family business succession and effective wealth transmission. The chair of Istanbul’s embryonic finance centre shared the view that thousands of family businesses will be transitioned across the generations in the next few years. However, short of a public listing that at least offers the chance for family members to take their money and exit, there are few real ways to build family enterprises for the long term and there are no secondary markets for smaller businesses. Litigation amongst family members is common and often vastly damaging to business prosperity. It’s simply not in any way straight-forward to organise family wealth to ensure that the common family wealth vision can be developed across the generations within the family. For inheritance purposes everybody gets their allotted share in an extremely rigid way.Istanbul Bar Association

The Turkish legal profession, on the other hand, is somewhat more informal; working largely on the principle of ‘get a degree, put up a shingle’. As members of the impressive executive committee at the Istanbul Bar Association explained for us, anyone with a law degree can practice, which, of course, discourages high standards and subsector specialisation. The group of officers and leaders of the Istanbul Bar, whom I met, are pushing hard against government policy. They want entry exams to the profession to be compulsory as any of us would find in most countries where STEP members do business.

So Turkey is a tough prospect for STEP and there are many other priorities for STEP and easier opportunities. This means that Turkey probably will not see a STEP chapter any time soon. However, while discussions with a range of stakeholders suggest that legal and professional changes won’t come today, they will come. The explosive growth of family enterprise means, I suspect, that Turkey will come knocking at STEP in the next five years and offer powerful network opportunities to STEP members, not just across Europe, but wherever Turkish families do business. I look forward to it.

David Harvey is Chief Executive of STEP

Time to acknowledge excellence

David Harvey

On Monday STEP announced that nominations for the 2014/15 Private Client Awards (PCA) had opened. Now in their ninth year, the PCAs are our opportunity to acknowledge and celebrate the professional achievements of our peers in private client practice, be they solicitors, attorneys, accountant, barristers, bankers, family business consultants, trust managers or financial advisors. This year there are 19 award categories for individuals, teams, chambers or firms to enter and, for the first time, all categories will be open to practitioners worldwide.

I strongly encourage you to consider submitting a nomination for a STEP PCA. All entries are rigorously evaluated by the Presiding Judges and to be recognised as a top-tier performer in the industry is an occasion you can be proud of. Given the broad range of jurisdictions and respective regulatory frameworks in which practitioners work, I expect to see contrasting nominations that all share the same hallmarks of excellence.

Nominations close on 30 May with finalists announced on 1 July. The awards night will be held in London on 17 September and I look forward to seeing many of you there.

View the 2014/15 Private Client Awards website including award categories and nomination forms

David Harvey is Chief Executive of STEP

STEP PCA 2014/15 Logo

Taking stock of STEP Bermuda

David Harvey

Last week, as part of the STEP 2021 consultation process, I had the pleasure of visiting STEP’s Bermuda branch to meet with members, the branch committee and employers. During this time we discussed the major issues in the next STEP business plan, debated STEP’s priorities for the future, and discussed the trust and estate industry in Bermuda and the global regulatory environment. Most importantly, I was able to hear from roughly 70 STEP Bermuda members and local employers about what they want from the Society.

Professional development

The feedback on proposals to ensure that STEP training truly is cradle-to-grave was extremely positive, as was the response to plans to make learning flexible to local differences and needs. Likewise, there was strong support for the move to the new Qualifications Framework with its university-style academic point system, allowing people to earn their TEP through STEP and other recognised qualifications, with much greater accessibility and choice but at the same tough standard. There was also clear demand for academic and theoretical learning to be accompanied by more practically focused courses dealing with the skills of day-to-day business management and strategy. In every sense, the STEP offer must continue to be relevant and to be aligned with member and employer needs.

On delivering professional development, STEP needs to make stronger use of technology to support members, recognising that there are cost pressures. There needs to be greater accessibility and flexibility to make courses viable for those in the more difficult to get to jurisdictions. Our members are also eager to receive regular technical updates via day-to-day online offerings, and through the STEP Journal and lecture circuits.

Public policy

There was strong recognition of the challenges facing the industry due to increased transparency, accompanied by regret that there has been little recognition of the existing high regulatory standards in many offshore jurisdictions. STEP must continue its work in this area.

Development priorities

STEP’s plans to rebalance efforts towards developing existing branches rather than new branches were applauded. We must avoid overstretching the Society’s capacity and ensure we develop more deeply and consistently in our existing jurisdictions.

Members and other stakeholders

STEP’s proposals to work more closely with employers were widely supported. All of the employers I met provided useful input to discussions around these plans and have clear needs. They were supportive of the current offer but felt they were well placed to input on future direction. The importance of understanding regulator demands and how that might drive  education was also a common theme, well understood at STEP.

There was also support for STEP plans to use technology and Special Interest Groups to strengthen global networks across borders so that they could function not just locally, but virtually around the world.

Overall STEP Bermuda is a very healthy branch and faces many of the same challenges as other offshore centres. While insurance leads the finance sector on the island, the future also provides a good prospect for private client work, as Bermuda looks to promote itself as a jurisdiction of choice. Additionally, although there was a strong focus on gearing STEP towards lifelong learning with depth and consistency, it is clear that members want a stronger reflection of their institutional trust work. They are also eager to see STEP continue as an effective voice for trust work and related private client business with regulators and government.

Finally, I must thank STEP Bermuda Chair Jonathan Dunlop and his colleagues for both their hospitality and their efforts in facilitating valuable engagement with members, employers and other stakeholders.

Left to right: Samira Saya, Zoe Hansen, Gaynette Edwards, David Harvey, Jonathan Dunlop, Lyneisha Lightbourne, Keith Robinson, Tammy Clarke and Susan Trott.

Left to right: Samira Saya, Zoe Hansen, Gaynette Edwards, David Harvey, Jonathan Dunlop, Lyneisha Lightbourne, Keith Robinson, Tammy Clarke and Susan Trott.

Big issues about STEP – the 2021 consultation

With around 750 members responding in detail to the STEP 2021 consultation members’ survey, we can be statistically comfortable that we have an accurate snapshot of member opinion. We are starting detailed analysis but what are the issues that immediately jump out?

  • Members overwhelmingly want STEP to have a stronger relationship with employers – 87 per cent ‘strongly agreed’ or ‘agreed’; only 0.5 per cent ‘disagreed’. The world of private client practice is changing from one of small partnerships and sole practitioners to one where many members work in larger managed organisations where there are human resources, strategic and education decision-makers as well as practitioner decision-makers. STEP has to meet the strategic needs of these organisations as employers as well as meeting the needs of STEP’s primary constituency – you the members.
  • Quality really is more important than quantity – 83 per cent of respondents ‘strongly agreed’ or ‘agreed’ with this statement – less than 1 per cent ‘disagreed’ or ‘strongly disagreed’. The implications suggest that if anyone has plans for some massive increase in membership, perhaps through lowering the entry standards in developing countries, such plans are not going to meet with  any ;support and would be seen to undermine the brand.
  • Opinion on STEP as a regulator is finely balanced – a small majority, 56 per cent are against STEP being a regulator, but 55 per cent felt it would be okay for STEP to be a regulator in certain jurisdictions. Other questions and discussions with members, plus initial branch meetings suggest that members see STEP’s first and original role as an educator as primary. However, members recognise the complex external factors which mean that STEP may sometimes have to take on a regulatory role in future because the government directs or STEP knows it has to regulate to sustain its role as an educator.
  • Members see strong value in online education – 55 per cent of members ‘strongly agreed’ or ‘agreed’, only 3.5 per cent ‘disagreed’ or ‘strongly disagreed’, but how could STEP develop this while not undermining the value of face-to-face training, in-depth learning, networking and a feeling of belonging?
  • 41 per cent of members are willing to volunteer to help in some aspect of STEP’s work – yet on the other hand, at the STEP leadership level there is perception that it is getting harder and harder to attract volunteers. As Chief Executive, I then have to ask if the problem is with those of us leading STEP now? Perhaps we are not finding the right ways to present attractive roles or to ask potential volunteers to volunteer?
  • STEP needs to move from exclusive society to professional excellence – 65 per cent ‘agreed’ or ‘strongly agreed’, while only 3.5 per cent disagreed with the statement. This raises questions about admission to membership and about what a professional body does against a trade association or the club that STEP was originally set up as when times were different. It also raises questions about where STEP branches are on their journey between club and professional body and whether members themselves sometimes now have a stronger affiliation to STEP than to their law society or accountancy body.
  • Value for money – 80 per cent ‘strongly agree’ or ‘agree’ that STEP offers value for money and only 1.25 per cent ‘strongly disagree’ or ‘disagree’. In the discussion section of the survey, there were many observations and ideas about value for money today and what it needs to be in the future. Just as members are forever pressurised to provide value, there are many ways in which STEP can sharpen what it offers.

Detailed analysis of the survey results will be published before the end of August.

Keep up-to-date with Consultation 2021 meeting developments

David Harvey, STEP Chief Executive

Welcome to the STEP Blog

Blogs grow from small beginnings; but acorns have a habit of becoming oak trees in the STEP world. In time, this blog will hopefully become a place to disseminate and start discussion on every STEP topic under the sun.

The launch of this blog coincides with the launch of the revamped, reinvigorated, reinforced STEP website, which has a number of new features that we hope will improve usability and add value.

Over the coming weeks, I will be blogging about the member consultation STEP is going to launch across the Society, to secure every member’s input to the development of STEP’s plans for the next few years. We are in a world where professionals and their clients face increased regulatory burdens, challenges to privacy and challenges of transparency, changing economic demographic pressures and new business models. We are also in a world where, rightly, members’ demands of their professional bodies are growing and changing in response to new media, new competition and new technology. STEP needs new strategy and delivery; not just to meet new challenges for members, but to build on opportunity when demographics and global mobility are moving in STEP’s direction.

Over the last four years STEP has delivered the promised new education system, a much stronger voice in public debate, greater support for professional development, financial soundness, a new governance system,  backed by high member satisfaction. The aim is to establish what today’s members will need for the next challenges and particularly what the prospective student member’s needs will be. The world has changed significantly in the last four years and that change shows no sign of slowing down. STEP wants the input of all of its members to meet the challenges of the future.

If you have any comments on this blog, or on the new website in general please post your comments below.

David Harvey, STEP Chief Executive