There has been much debate about the role and function of the family office. Many business-owning families may wonder whether they should have one, what its functions should be and how it will cost.
Family offices often have their roots in the need for administrative support to look after family matters - for example, managing assets such as family trusts, companies, shares, property, investments, and charitable foundations.
Some of these functions can be undertaken by professional providers such as banks, accountants, lawyers and trust companies. That said, families occasionally prefer to have somebody with them on a full time basis who can liaise with advisers.
A family office can also provide a complete wealth management service for families who want to have some or all of their assets collectively managed. There could be a number of beneficial reasons for this, ranging from the emotional to the purely practical, such as the existence of jointly owned assets, family trusts and investment vehicles.
Another potential benefit is the cost reduction gained through economies of scale and collective negotiating power with various suppliers. The family may also be able to access investment opportunities which would have been beyond the reach of any one family member.
If you are considering a family office, bear in mind that it can be expensive to find and hire an individual with the depth of knowledge and experience required to match that of a professional investment manager. A ‘coordination’ position may be easier to staff.
Things to think about
Questions to ask
