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Family offices are designed to support and meet the needs of wealthy families and their advisors who are often in charge of growing and transferring wealth across a family’s generations. Responsibilities of family office staff may include any number of tasks including, but not limited to succession planning, day-to-day accounting and payroll, legal affair management, family governance, financial and investment coordination, handling travel arrangements, managing family staff, managing property, and organization of philanthropy and private foundations. One benchmark indicated by multiple sources is that families whose wealth exceeds $100 million in investable assets is when a family office is often considered.

Although there are often significant expenses when it comes to setting up and maintaining a family office, the advantages and the level of coordination that results often outweighs the investment. Here we look at three significant advantages to having a family office.

An Integrated and Coordinated Plan

A family office allows for cohesive and transparent (to family leadership) planning that covers a family’s comprehensive financial affairs—investments, asset management, wealth transfer strategies, proactive tax planning, and optimal ownership structures. With the staff of a family office working together day in and day out, they acquire a combined intimate knowledge of the family that allows for an unprecedented level of custom insight and advice. This advantage creates a greater level of confidence in managing the family’s assets through transitions and into future generations.

Cost and Time Savings

A family office provides for pooled purchasing power for the various family members, as well as generations of the family. The office can coordinate the various needed professional advisors—lawyers, accountant, investment advisors, and insurance consultants—and ensure the family’s goals and objectives are met while creating opportunities to combine the efforts and costs when possible. With a family office in place, members of the family, in particular its matriarch and/or patriarch, can save a considerable amount of their own time that may otherwise be needed to manage the complexity of the family’s multi-faceted efforts, goals, investments, and future planning. The staff of the family office can coordinate and oversee all facets of the integrated plan and engage with the family members as needed.

Unbiased Guidance and Advice

Families of all sizes and with varied levels of wealth undoubtedly have their disagreements. With a family office in place, when these disagreements arise, family office staff can serve as an effective facilitator to discuss and ultimately decide on any conflicting issues. With their unparalleled level of knowledge and understanding of the family, their neutral position and advice family office staff can serve as a welcome third party to these discussions often bringing a different perspective to the situation. This benefit often comes into play as it relates to coordinating between generations within the family.

Contact Us

Family offices come with many benefits and advantages even though their investment is significant. If you are considering starting a family office or have a family office and want to make some changes, it is important to consult with a qualified advisor that can review your situation and determine the best way forward. If you have questions about the information outlined above or need assistance with another family office issue, Selden Fox can help. For additional information call us at 630.954.1400 or click here to contact us. We look forward to speaking with you soon.

Nathan Sharp

Nathan Sharp works with a variety of firm clients, including individuals, family businesses, business owners, and various corporations. He earned his bachelor's degree in accountancy, his master’s in accounting science, and his MST from Northern Illinois University.