A key challenge facing many ultra-high net-worth families, particularly in today’s volatile environment, is how best to maintain, grow and pass on family wealth for future generations.
A family office provides an optimal succession planning and asset management/protection platform. The family office can shepherd family members towards achieving their dual goals of enhancing wealth from an investment perspective whilst also ensuring that wealth is not dissipated over future generations.
There are large differences between families in terms of their size, age range, scale of wealth, geographical spread, extent and nature of business interests and their attitude towards risk, philanthropy, and privacy. The family office concept provides families with the opportunity to create a bespoke platform to govern the investment and administration of family wealth for current and successive generations.
It allows a means of expressing and putting into action families’ core values and goals, which are embedded through education of family members and enhanced through communication. Control, governance, and communication mechanisms within the family office are critical, both to assist with decision making and in terms of how the family can work best with external advisers.
HOW MUCH DOES A FAMILY OFFICE SERVICE COST?
The cost of a family office service depends on a number of variables including nature of the family’s investments.
Complexity is the greatest predictor of cost for a family office. Getting to an “all in” cost of wealth management requires detailed consideration of the cost of the family office, the fees paid to advisory firms (accountants, lawyers, etc.) and investment costs (investment consultant, investment management fees, custody etc).
GOALS AND COMPLEXITY OF THE FAMILY OFFICE:
A common misconception is that asset size is the most important factor in determining wealth management needs. In reality, the goals and circumstances of the family will dictate the complexity of wealth management needs.
Key factors to consider include the number of family members or households, the nature of the ownership and legal structures, the types of investments, and the entities that house them.
MULTI FAMILY OFFICE:
A multi family office supports multiple families to preserve and manage their wealth and enables those with a lower level of wealth to leverage the services enjoyed by a dedicated single-family office.
