What if one person or investment firm could handle all of your family’s finances and assets? Paying household employees, accounting for taxes, managing assets, planning for retirement and preparing for wealth transfer… all done for you with your best interests at top of mind. This concept of a family office has been around for centuries, yet the styles and options are ever evolving to accommodate modern families.
While there is not a one-size-fits-all model for a successful family office, the purpose holds steady: to align interests, define a vision and work towards a goal.
Building a Family Office
A family office simply manages the not-so-simple assets of an individual and/or his or her family. The specifics and setup depend upon the family.
Consider a smaller family with a family business. A family office may just include someone who helps manage business administration. On the other end of the spectrum, a high net worth individual with a larger family will likely staff a family office with a lawyer, accountant, financial advisor, property manager and charitable giving director. This type of family office is referred to as a single family office (SFO) and is essentially run like a business or its own wealth management firm.
Then there is the in-between: an investment firm that offers multi-family office (MFO) services. Several families come together to take advantage of these services and create economies of scale.
How do you determine the right one you need? Consider these three things:
- Volume of work. Before you hire on separate specialists and advisors, consider the value and complexity of the assets being managed.
As each staff member comes at a cost, it may be most efficient to keep the family office staff small and outsource to other providers when necessary. - Functions. List the functions and key positions you will need, such as a lawyer, accountant, financial advisor and administrator.
- Knowledge base. You’ll likely need financial advisors, lawyers and accounts with very broad experience and knowledge – hard to find in one individual. It may make more sense to outsource to a specialist with the specific knowledge you need, when you need it.
If your volume of work is minimal or you need a broad knowledge base to cover a variety of assets, a multi-family office may be the perfect financial fit.
Family Offices Are More Necessary As Financial Needs Become More Complex
By far, the biggest advantage to using a financial institution for your family office is the broad spectrum of services and advisors available. You will likely work with one person as a liaison (you can also choose to employ a family office liaison directly – often a trusted advisor whom you already work with). They then consult with you while bringing in specialists as needed. This not only saves you time in finding and meeting with the specialists, but it also saves you the cost of employing the specialist versus consulting with him or her.
Ultra high net worth investors and those with family businesses often put great thought and effort into succession planning, such as through trusts and transferring wealth to the next generation. This provides another benefit to working with Stableford for family office services, as the firm can work with counsel to make sure all future business and wealth management planning are aligned.
And while Stableford Capital may not have a philanthropic team on staff, we do have the experience and resources to bring in those specialists as needed. Or instead, we can work with a philanthropic director of your choice.
Wealth Management Aligned
A family office should not only make it easier to manage assets, but should also promote clear communication. Whether you choose to staff your own, use an investment firm’s multi-family office services, or a hybrid of the two, the goal remains the same: to align wealth management interests and goals.
A third party’s involvement in family finances and business can also increase communication across the family while reducing potential tensions. However you choose to manage your family’s assets, be sure there are accountability checks in place.
Stableford’s integrated advisory services provide the perfect platform for a family office. Estate, retirement and tax planning complement investment strategies and asset management, all working together. Stableford is your partner and can provide the infrastructure and resources. With us, you have the executive committee in place. To learn more about multi-family office services through Stableford, contact us at 480.493.2300 or online.
