Family Office

A family office is an excellent approach to financial and administrative management for many people. It is important, however, to clearly understand the opportunities and pitfalls.  In addition to deciding if you are ready for a family office, you should also give honest consideration to whether you and other members have expertise, temperament, time and commitment to manage it yourself. If not, get outside help from an expert

A family office is a private firm, formed to manage an array of things for families with significant wealth. Among these can be asset allocation, investment management, tax planning, property, insurance, philanthropy and just about any other financial and personal administrative activity.

While family offices have been around since the 1800s – for families like the Rockefellers – they have evolved to address today’s need. Most provide many of the same services as a bank, but just to the family or families involved. Individual family offices make the most sense for families with assets of $100 million or more. Multi-family offices may be right for those with $10 million or more.

In addition to planning and managing financial affairs, a family office can reduce conflict and contribute to better family relations by improving communications and creating a clear strategy and plan everyone understands and buys into. The key is to design and implement the family office properly and get everyone on board.

People are clearly recognizing the benefits of an appropriate family office. In the past half-decade, the number has increased by more than a third, according to the Family Offices Group.

The cost of a family office varies based on many factors, but it typically runs between half of a percent to one percent of the total assets per year. This is clearly a significant expense – $1 million per year for $100 million in assets – so it is very important to proceed with knowledge, caution and quite possibly expert counsel.

Contact Mike for more information.