Protecting legacy: The value of a family office
Services for family office structuring, technology transformation, and risk mitigation
This report is a starting point. It is designed to help wealthy families build on their current understanding of what a family office is, consider factors that have contributed to the success of other family offices, and formulate a plan that leads to the creation or revitalization of their own family office.
Overview
With the creation of significant wealth, new worlds often open for high net worth individuals and their families. Exciting opportunities, as well as new challenges, can arise as the family acclimates to the increased complexities of wealth. One important decision may be establishing a family office*—or modernizing an existing one—to oversee the financial affairs of the family rather than relying on financial institutions to provide those services.
*This report focuses on single family offices: private organizations established by families to oversee, directly and indirectly, their financial affairs. References to a “family office” throughout this publication infer a single family office unless otherwise noted. In contrast, a multifamily office is an organization that serves multiple nonrelated families. Sometimes, these are former single family offices that have broadened their client base to serve other nonrelated wealthy families. More often, multifamily offices are third-party wealth management firms that provide outsourced services to wealthy families.
Inside the latest report
Family office fundamentals
While opinions vary widely, many people in the family office industry believe that a family needs at least $100 million of investable assets to form a family office.
Download the family office fundamentals section
Operational considerations
To preserve and manage a family’s wealth, family offices must structure themselves to identify and meet family needs through developing the capacity of their staff and creating effective processes for governance.
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Management considerations
To navigate global risk, family offices should develop a framework for evaluating cybersecurity threats and fraud detection, as well as for managing controls for tax reporting.
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Executing the family's vision
To fully execute the family’s vision and manage wealth across generations, family offices should develop clear investment objectives and establish a unifying strategy for achieving the family’s shared philanthropic goals.
Looking ahead
The family office industry continues to evolve and become more sophisticated in response to the demands of the families they serve. Several emerging trends are reshaping the focus of family offices and how they will operate and serve families in the future.
Direct private equity
Direct private equity often requires more active involvement with respect to ongoing business decisions. Accordingly, it will be important for families to agree on the governance with respect to these business investments and whether family members will be allowed to actively participate in the acquired companies.
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