Family Business Audiocast | Episode 65 | Stephan Gerwert

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R. Adam Smith: Welcome to the Family Business Audiocast on LinkedIn. I'm R. Adam Smith, creator of this Audiocast series. As an entrepreneur, investor, founder, investment banker, and board leader the last 25 years, I'm fortunate for my many experiences within the family firm industry. A brief comment on why I created this broadcast.

Private companies are a passion of mine, having grown up in a family of entrepreneurs and having engaged for two decades in deals, strategic transformations, investments, and boards with an array of fascinating family enterprises, family firms, and family offices. I founded this series to offer a useful platform for listeners to hear from veterans, academics, and leaders in the vast family firm ecosystem.

Whether you're a family business owner building, running, or advising a family office, or just expanding your family office activities, I hope these conversations are useful and enlightening. Now it's time to turn our attention to our accomplished guest on today's episode.

A warm thank you to our live audience today and those listening later. I'm joined today by Stephan Gerwert of PwC, head of Family Office Services at PwC Deutschland in Germany, and a seasoned advisor to many ultra-high-net-worth individuals and entrepreneurial families. Stephan, great to have you here today, my friend.

Stephan Gerwert: Thank you so much for having me. I'm really looking forward to the conversation.

R. Adam Smith: We'll talk about you first, then dig in. Stephan has several decades of experience working closely with families navigating the complexities of wealth, governance, long-term financial positioning, and legacy. His approach is grounded in a simple but powerful idea — that significant wealth brings not only opportunity but also responsibility, something we discuss often on this podcast — and that clarity, structure, and pragmatic decision-making are essential to preserving both.

At the firm, Stephan leads advisory efforts across the full spectrum of family office design and operation, from governance to next-gen planning to strategic asset allocation, reporting, and direct investments. He often finds himself acting as a navigator, helping families move confidently through complex financial and interpersonal dynamics.

Before PwC, Stephan co-founded Skyland Wealth, a digital platform focused on real estate investments for ultra-high-net-worth investors and family offices, giving him firsthand experience building, scaling, and operating investment platforms. In an environment where capital structures, global exposure, risk, and family dynamics intersect, it's wonderful to have Stephan bring a holistic perspective on building and sustaining a modern family office, particularly from a European point of view. Let's talk about PwC Deutschland first, then jump in.

Stephan Gerwert: Sure. I'd say PwC Germany isn't any different from PwC in the US or other jurisdictions, though different territories have larger practices than others, giving clients a broader spectrum of services to draw on.

Overall, PwC Germany positions itself as a holistic advisor bringing the full spectrum of family wealth and governance to the table. It's easier to say what we don't do than what we do — we don't handle investments; we're not an asset manager, a bank, or a wealth manager. We're really the holistic, completely independent guide — or navigator, as you put it — helping clients understand what their wealth actually is, how they're positioned, which partners to select, which tools to use, and which governance structures to build. We build the operational side of a family office, and others come in to handle the investments.

R. Adam Smith: Thank you — PwC is an incredible firm. We've had colleagues and competitors from EY and RSM on the podcast, with JPMorgan and UBS coming up too. It's important to hear from both large and smaller firms to really understand this space.

Let's focus on your own journey — over two decades with ultra-high-net-worth families, and what it's like being a navigator for them. Experience matters, but so does credibility. Talk about that journey and how it's led you to where you are today.

Stephan Gerwert: Compared to many others in this space, I think I've had a fairly heterogeneous career. I started typically enough at a big bank in wealth management, then moved on to lead a single-family office in Switzerland. From there I joined a fintech serving that same clientele, becoming an entrepreneur because I was so drawn to the startup space, building what became Skyland Wealth, as you mentioned.

When a typical startup pivot became necessary, and my co-founder and I didn't see a clear path forward, I learned what entrepreneurship really means in terms of full decision-making responsibility. Joining PwC, I've now seen and advised this clientele from nearly every side of the table — I'm not sure which side I haven't seen at this point. That gives me a very holistic view of the challenges families face — not just investment challenges, but what it means to grow up and live within a complex, often multi-generational family: family dynamics, investment dynamics, and something many don't examine closely enough — governance. Having clear rules and guidelines in place keeps you clear of major mistakes. It's been a very fortunate journey, and one I still genuinely enjoy.

R. Adam Smith: For anyone wanting to reach you, I assume LinkedIn is the best way?

Stephan Gerwert: Yes, exactly.

R. Adam Smith: Let's talk about the family office advisory structure and philosophy — the responsibility of advising a family office, and the family's own responsibility to itself. On this podcast we discuss governance often, both as something that enables decision-making and something that reduces conflict through ongoing communication, coordination, and transparency. Talk about your philosophy in advising family offices, and the key principles you bring to that work.

Stephan Gerwert: It's great that you're putting this topic front and center. At PwC, when we think about governance, we really try to start at the very beginning — we don't jump straight into defining governance structures. We take a step back and ask the family: who are you as a family? What is your legacy? What's the vision you have for your family? What vision and mission do you want your family office to have? What's its purpose?

Once that's defined, almost intuitively, once you've established the big picture and the family's long-term view, you can quickly move to defining the service levels needed to fulfill that purpose and vision. From there, the governance structure follows quite naturally — what committees are needed, what the team structure looks like, what should be handled in-house versus outsourced. It all falls into place once you start with the big picture; governance is really the outcome of that process.

R. Adam Smith: We've talked a lot on this podcast about structuring governance with veterans in the space — Alfredo De Massis, one of the true leaders on governance, all the way to Jim Grubman and, coming up, Dennis Jaffe, both from the Ultra-High-Net-Worth Institute. We've also spoken with Christina Wing and Richard Wolkowitz. Everyone prioritizes governance, but with a different lens. What doesn't get discussed as often is the sheer effort and complexity of actually building governance from scratch, since most conversations assume it's already in place or just needs tweaking. Can you talk about that process — building governance from nothing?

Stephan Gerwert: Once you've established the big picture, it comes down to deciding which committees are necessary. Do we need a family council on the family side? Do we need a family office board, an investment board? What are the different committees required to run the family office and fulfill its mission? Then you go step by step through every person, inside and outside the family office, and define clearly who holds what role.

I often see family offices without clear role definitions in place, and that's when questions arise — who decides what, when, and who needs to be informed? As long as there's a strong patriarch at the helm, these gaps might not seem obvious. But especially around a potential succession, undefined roles become real problems. What I like to use is a RACI matrix — defining who's Responsible, who's Accountable, who needs to be Consulted, and who needs to be Informed. Building that matrix with everyone inside and outside the office gives you a very solid starting point for governance.

R. Adam Smith: Designing governance really depends on the size, preparation, and complexity of the family. We often say "family office," but it's really a family of businesses — the business of the family, but also the family of businesses around the core business. I like the term "enterprise" for that reason. The Ultra-High-Net-Worth Institute uses "family capital" as a foundation for their work, and Alfredo De Massis uses the term "galaxy" for the family's ecosystem. I'd love your broader perspective on the industry's scaling — especially in Europe, where some very large families exist, but this has become a global phenomenon. What's happening with scaling, and how does that affect complexity, particularly from a European perspective?

Stephan Gerwert: Big, thoughtful question. Interesting that you mention "family capital" — we've started using that same terminology to describe this triangle-like ecosystem of family business and family office, and you'll likely see us adopt it more going forward.

On the ecosystem here in Europe — I'm mostly focused on Germany, so I can only really speak to German families — I'd say the broader family capital or family enterprise ecosystem is probably fairly similar worldwide. Looking at sizable German families that work with PwC, you see a continued trend: they're really in the business of forming future businesses. Most aren't typical capital allocators focused on public markets, private equity, or venture — they're building a hub of a diversified business platform.

The best example, a few years back and public knowledge, is Viessmann — a very substantial family business that was sold. Their family office is now actively acquiring a diversified portfolio of other substantial businesses. They didn't just hand the proceeds to UBS to allocate — they stayed in the business of being an entrepreneurial family, just in a different context. That's the trend toward private markets we see here too, but even more specifically, families staying close to what they're actually good at — being entrepreneurial and business-minded.

R. Adam Smith: I previously worked with part of the BMW family office — the Quandt family — which later had a division called Aqton that became a $15-20 billion alternative investment manager in the US called HQ Capital. Fascinating dynamic. We see something similar with Benetton and with Colvest out of France and Argentina. These are some of my own clients and friends — powerful, dynamic organizations building alternative or direct investing activities outside their core business. In Germany you see Viessmann as you mentioned, also Moray Holdings, Klatten and Altana Holdings, Hagemeyer, Kaufland, Porsche's legacy extending into defense and security. Germany is a very large country — what distinguishes Germany, or the DACH region broadly?

Stephan Gerwert: Especially compared to the US — I've spoken with numerous single-family offices there over the years — Germany's family office ecosystem is still very secretive. Not many go public in any sense; it's a closed system. Many of the very sizable families you mentioned are so private that you can't even find current photos of the family heads — they don't want to be recognized. Lucky them, in a way — they won't have a LinkedIn profile.

I think there's some value to that compared to the more open, outgoing US culture, which brings a certain level of exposure some German families choose to avoid. On the other hand, where I think German families and family offices could do better is collaborating more amongst themselves — networking more actively to use this enormous opportunity for club deals, co-investments, building things together. In Germany, families tend to stick to themselves, and that's not always beneficial. Those are two things that come to mind, along with being perhaps more cautious than other countries about finding the right partners to work with.

R. Adam Smith: There's a tricky balance between transparency, openness, and collaboration, versus protecting fragile family dynamics, brand, and privacy — which is psychological and societal, not just a PR matter.

Stephan Gerwert: What I'd recommend, though — especially for a family already known publicly — is investing in good PR, simply because a story about you will exist in the market regardless, so better to be in charge of it than let others create it. Too many families hold back instead of getting ahead of their own narrative and positioning their family and brand deliberately. Otherwise you end up with more false rumors that aren't beneficial, compared to taking ownership of the story yourself.

R. Adam Smith: There's a certain skepticism of the press, and hesitation stemming from that legacy of privacy and quiet pride in wealth. Let's keep talking about legacy and scale-building, which is genuinely important — to me, to this podcast, to Germany, and the world. We've discussed scaling and collaboration often, and we're seeing it actively in reports from PwC, JPMorgan, Northern Trust, Bank of America, Goldman Sachs, and Campden — this scaling of large families and working together, especially in private markets.

We've also discussed the importance of collaborating and joining forces recently — with Philip Marcovici in Episode 61, Jeremy Swan in Episode 58, Dr. Jan-Philipp Ahrens in Episode 56, and going back further to Ron Diamond and Martin Roll. Scaling is especially important for Germany given its conservative tendencies. Looking at Germany's economy alongside much of OECD Europe, there's a real dichotomy — the social, tax, and economic fabric is struggling with population growth, immigration, taxes, infrastructure, and global competitiveness, especially given Germany's manufacturing lean, which has been under pressure the past decade from China, other emerging markets, Mexico, and so on. Where tax, labor, and policy are more rigid, as tends to be true in Germany, that's a real problem. If some of the larger private family offices and billionaires could collaborate more creatively, as we're seeing in China, Singapore, South Korea, and the US, maybe there's an opportunity there to benefit the broader economy. What are your thoughts?

Stephan Gerwert: Sadly, all of that is true, Adam. Germany is struggling, and it's visible in the news. We're essentially a stagnant nation in terms of GDP growth — around zero, or maybe 0.5%, nothing particularly noteworthy. Sadly, these are largely problems we've brought on ourselves, and many people recognize that by now.

As you said, we have a strong manufacturing base, which needs cheap energy. We had that from Russia — since the war in Ukraine began, that's gone. Now we face very high energy costs, partly because we phased out our nuclear energy capacity years ago, and now industry, and ultimately consumers and the population, pay the price.

The German family business owners I know remain proud — they know their legacy and their responsibility toward their employees, and they often stay in Germany. You mentioned tax — many literally can't leave, because German tax law would tax them on certain corporate assets simply for leaving the country, even without selling those assets. So they'd be taxed on something they can't actually pay, since they lack the liquidity without selling. Many are essentially trapped, and behind closed doors they'll tell you: "Right now I'm staying, but often it's simply because I don't have the option to leave — if I could, I probably would."

R. Adam Smith: Germany is fascinating — it's been the growth engine of Europe and the world. France gives it a run for its money, though France isn't a high-growth state either. Looking at some estimated statistics: Germany appears to have around 2% inflation, 2% GDP growth, 4% unemployment, and debt-to-GDP around 60% — fairly reasonable numbers, and import/export figures look solid too. But the tax structure, pace of innovation, and immigration challenges remain real problems.

On the family business side, some fascinating stats, much higher than typical elsewhere: reportedly 90% of German companies are family-run. Germany hosts 78 of the world's 500 largest family businesses — second in the world to the US, ahead of China, Japan, France, and the UK. There are around 500 single-family offices and 100 multi-family offices in the country. And 50% of family-controlled companies apparently account for about 50% of Germany's total GDP turnover — remarkably high, well above many other European countries. At the same time, Germany tends toward conservatism, holding more cash — I've seen a stat that American companies hold around 5% cash, while German family offices hold around 14%. That's a significant amount of capital sitting idle. It really seems like people in your position, and PwC as a firm, and leaders across the country, should be finding ways to catalyze families into a more impactful economic role.

Stephan Gerwert: I completely agree. I know a business owner who was shocked, at one point, by how much liquidity he holds in his business — partly for potential acquisitions, but mostly as a worst-case-scenario piggy bank. There's definitely a lot of cash sitting on the sidelines in Germany.

Another statistic — I'd have to double-check the exact figure — is that the average German's allocation to equities is extremely low, maybe under 10%, compared to 40-50% for the average American, largely thanks to 401(k) incentives. So while Germany's national numbers look reasonable on paper, the average German often has a lower net worth than you'd expect compared to other European countries — even Greece or Italy — because we're so defensive, especially around investment risk. That's also part of why the US has been so fortunate to produce huge, successful tech and now AI companies, something Germany has very little of. I worry that while these numbers look fine on paper today, if we meet again in 20 or 30 years, they could look drastically different.

R. Adam Smith: Let's return to the family enterprise decision-making process — holistic reporting within the family office and enterprise, and how PwC gathers that information as an advisor. How extensive is that information, and how do you gather it from a technology standpoint?

Stephan Gerwert: We work more closely with certain technology providers than others, but broadly we're technology-agnostic — whatever the client wants to use, whether it's Addepar in the US, or German competitors like Cplex or others. As an independent advisor, PwC doesn't have our own reporting tool or SaaS platform, but we rely on good partners in the ecosystem who provide that technology.

It's genuinely important, if you want to advise holistically, to see the full picture of a family's wealth, the jurisdictions involved — which carries big tax and legal implications — inheritance planning, tax structuring, making sure nothing gets forgotten. Holistic wealth reporting is critical for us as advisors.

R. Adam Smith: There's clearly growing awareness around cybersecurity and technological protocols in the elite family office space. Can you talk about PwC's perspective — how you use technology and AI in gathering and assembling information, building security protocols, and advising families on internal cybersecurity?

Stephan Gerwert: That question couldn't be more relevant. I was recently at an event where our cybersecurity lead spoke, and he mentioned — I don't recall the exact numbers — that with roughly 30 seconds of your voice and just two or three photos of you, someone can now create a completely convincing virtual avatar that looks and sounds like you.

If that's the world we're living in, cyber threats — being extorted for Bitcoin after being hacked — are a genuine risk for every family with substantial net worth, because hackers know who to target and how to find them. Cybersecurity is a huge topic. Surprisingly, in my four years at PwC, I'd say it's really only started gaining serious traction in the past six months or so, at least from what I've seen — though I certainly don't see everything PwC does. I've been advocating for people to look into it for a while.

From what I've seen colleagues doing, we treat a family office just like any other business when it comes to cybersecurity — there's no fundamental difference between a family office and a manufacturing company in that sense, though the specific vulnerabilities differ. We start with a full audit of everything that exists — people, tech, software, hardware, everything that represents a potential risk, including people, who we all know are usually the biggest vulnerability. We start with the easier solutions and topics and build from there, depending on how deep the family wants to go.

R. Adam Smith: We'll come back to that in more detail in the future. Let's wrap up — this was a wide-ranging conversation covering governance, structure, and discipline within the family office, its operational complexity, and long-term stewardship and wealth creation within Germany and Western Europe. Final thoughts on the relative impact of large billionaires and family offices in the world, and particularly within Germany, given how central they are to commerce and capitalism there?

Stephan Gerwert: I truly believe successful entrepreneurial families in Germany with an established brand carry a tremendous responsibility to use everything they've built — call it legacy, whether in wealth or in the businesses and jobs they've created — as a kind of lighthouse for pretty much everything they do. As you mentioned earlier around impact — anything with a potentially positive influence — they should be more outspoken about it than they currently tend to be, because there's so much for everyone to learn from and be inspired by.

R. Adam Smith: Thank you, Stephan Gerwert of PwC, for joining us today. Your work demonstrates that successful family offices are built on more than investment decisions alone — on discipline, on their operating companies, and hopefully on a greater sense of commercial collaboration for Germany and Western Europe as a whole. Thank you so much for sharing your thoughts today.

Stephan Gerwert: Adam, it was a pleasure being here. Thank you for the invitation — truly appreciated.

R. Adam Smith: This is R. Adam Smith, signing off. Please stay tuned for the next episode of the Family Business Audiocast.

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Explore the strategic intricacies of family business success with the RAS Family Business Audiocast. Join R. Adam Smith as he delves into exclusive discussions with global leaders shaping the future of private wealth and enterprise. Each episode offers a rare glimpse into the core decisions driving prosperity in high-stakes markets. Tune in to gain expert insights and innovative strategies that empower family businesses to thrive across generations.

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