Education/FAQs

What is a family office?

A family office is utilized by affluent individuals and families to manage their wealth affairs.


What types of services are offered by a family office?

Family offices are bespoke and may offer a wide array of services or focus on a limited few. Below is a comprehensive list of services that may be rendered[i]:

  • Tax advisory and planning
  • Financial planning and capital sufficiency analysis
  • Cash flow management
  • Preparation of financial reports and aggregated reporting
  • Oversight of brokerage transactions
  • Management of charitable and family philanthropic activities
  • Foundation management
  • Investment advisory and services
  • Asset allocation and portfolio management
  • Management of debt/leveraging opportunities
  • Retirement planning
  • Estate planning
  • Bill paying
  • Management of household staff
  • Payroll tax administration
  • Management of family collectibles, aircraft and yachts
  • Coordination with bankers, attorneys, and insurance brokers
  • Oversight of real estate investments
  • Wealth transfer and gifting strategies
  • Mediation of intergenerational conflicts
  • Assistance with succession transitions
  • Serving as Trustee
  • Family education
  • Facilitation of family meetings
  • Family governance
  • Conducting  wealth audits, to understand a family’s complete holdings
  • Monitoring all risk coverage, from property and casualty to substantial life insurance programs
  • Offering offshore solutions as appropriate
  • Overseeing and monitoring outside trustees
  • Creating educational programs for the next generation
  • Preparing the next generation to serve as valuable board members for other organizations

What are the different family office archetypes?

If you have seen one family office, you have seen one family office, which historically has made the space difficult to assess. Dr. Rosplock has outlined six family office archetypes in her book:

  • The Multi-generational Focused Family Office
  • The Investment Family Office
  • The Founder’s Family Office
  • The Administrative and Compliance Family Office
  • The Legacy and Philanthropic Family Office

How many family offices exist?

Family Wealth Alliance estimate there to be 2,500 to 3,000 operating Single Family Offices (“SFO”s) whose combined assets exceed $1.2 trillion[ii]. There is no denying the increased interest in the family office space; however, assessing the true growth of the SFO space is difficult for a number of reasons. First, not all financial families and wealthy individuals self-identify as a family office, even though their assets, organization, and operations appear to function as a family office. Second, the regulatory requirements of the Family Office Rule enacted by the SEC (Security Exchange Commission) have enticed many financial families to surface and identify as a single family office. Third, more investment driven firms and hedge funds started by investment legends such as George Soros, Carl Icahn, and Stanley Druckenmiller are taking advantage of the changes in the regulatory requirements and are opting to identify as a single family office to take advantage of the less strict reporting and regulatory oversight. The growing wealth of the ultra-high-net-worth space gives us an understanding of the expanding wealth at the top-most tiers.


How big do you need to be to warrant a family office?

There is a debate on the amount of assets to warrant a family office. Some family office experts advise that the minimum assets under management for a family to establish a family office is $250M, while others advise that it is truly only cost effective for families with $500M or more. There are many smaller family offices that operate with $100M or less, however, these offices tend to be more “coordinator family offices.”[iii]

What are the differences between Single Family Offices (SFOs) and Multi-family Offices (MFOs)?

The differences between SFOs and MFOs vary, but for the most part, SFOs only serve the bloodlines of one family, whereas MFOs are commercial entities established to service multiple families.


What are the Strengths, Weaknesses, Opportunities and Threats of a SFO?

sfo

What are the Strengths, Weaknesses, Opportunities and Threats of a MFO?

mfo



[i] Rosplock & Hauser (2014). “The Family Office Landscape: Today’s Trends & Five Predictions for the Family Office of Tomorrow” Journal of Wealth Management

The SWOT Analysis of the SFO and MFO should also be  footnoted as Kirby Rosplock, (2014). The Complete Family Office Handbook, Wiley/Bloomberg, pg. 51 (SFO) & p. 56 (MFO)

[ii] Family Wealth Alliance, as cited by Pamela Black, “The Rise of the Multi-Family Office,” Financial Planning, April 27, 2010. Downloaded from www.financial-planning.com/news/family-office-wealthy-2666609-1.html.

[iii] Kirby Rosplock, (2014). The Complete Family Office Handbook, Wiley/Bloomberg, pg. 8  from an interview with Katherine McCarthy, 2012.