Family Office
What is a Family Office?
A private Family Office, often also called Private Office, is an entity or structure set up by a wealthy family to provide a range of administrative and support services to family members.
A Family Office can be a useful tool in your legacy planning and asset protection and it is an excellent tool for the introduction of the next generation to your structure and values.
A family office has many advantages but it does of course come with a cost. A multi family office allow an important reduction the the running cost while allowing for the same service to be enjoyed by the family and its members.
Why should I set up a Family Office?
A family often considers setting up a Family Office following the sale of a family business or otherwise when significant liquid wealth has been extracted from an on-going family business.
Rather than each family member dealing separately with their individual assets, the family's combined wealth is managed centrally by dedicated professionals employed by the Family Office. The Family Office acts as a central co-ordination point to preserve and manage the family's wealth and to provide any other services required by the family members. If the Family Office functions as it should, it consolidates best practice and saves costs for the family.
Family offices
The family office can offer just investment services to a relatively small family or provide a much broader range of services , often with a sizeable team, to a large, diversified multi-generational family.
The implementation, management and administration of wealth planning structures such as trusts, foundations, life insurance solutions and corporate entities will often be part of the family office activity. The family office can also manage assets such as foreign homes, art, yachts and air-crafts. For family with an important wealth, the services may also include lifestyle management and travel organisation. It may also play a part in philanthropic activities and the education of the next generation.
A Family Office set up is by its nature bespoke but often the services provided by a Family Office include:
- managing investment portfolios;
- monitoring and reporting on investments (including those managed by external investment management firms and private banks);
- administering family members' cash management and bank account arrangements;
- dealing with the family's properties and non-financial assets (e.g. foreign homes, art, cars, yachts and air-crafts);
- selecting and instructing professional advisers on behalf of family members (e.g. lawyers, accountants, investment advisers, insurance advisers);
- employing and managing the family's domestic staff (e.g. chefs, security staff, drivers, nannies);
- concierge-style and lifestyle management and travel organisation activities.
- play a part in philanthropic activities and the education of the next generation. and
- managing the family's public and media relations and acting as the public face of the family (e.g. in relation to business and philanthropic activities).
A single-family office comes in all sizes and forms, depending on the actual wealth and composition of the family and would serve only this family. A multi-family office would serve a number of families ranging from a couple to a hundred or more in some cases. The main advantage of the multi-family office is of course the reduced cost compared to a single family office.
The location of the Family Office
The location of your family office is of great importance. One of the main reasons for establishing a family office is to protect your wealth and it should therefore be established and managed from a stable country in a stable region. Many families wish to separate the Family Office from the jurisdiction that they are most closely connected with as this may assist with diversification, confidentiality and security.
Another consideration that influences the location of the Family Office is where the family's wealth is managed and in particular where the top investment professionals are found. It is therefore common for a Family Office (or at least a branch of the Family Office) to be situated in London, New York, Singapore or Switzerland.
