Introducing the single family office
This form of office looks after the needs of a single family. Taking into account that the number of individuals in a multi-generational family could vary from a couple to hundreds of people (even exceeding a thousand), and that family offices are intended to serve multiple generations. A family should consider establishing their single family office only once the complexity of the family and/or the complexity of the wealth become too much for the family to handle themselves. A rough estimate of the wealth required to justify the cost of running a family office is in excess of £200m.
When a family gets to the point of feeling incapable of handling their own affairs a single family office is set up. This may be because the assets have become too complex to manage, that conflict between family members becomes untenable, or that upcoming generations are eager to start taking responsibility alongside the current generation. The family then appoint professionals who are able to support the family and provide assistance where necessary.
In general terms, some of the more common functions professionals in a single family office will attend to are:
- Finances and cash management for the business and for individuals in the family.
- General legal assistance including compliance and anti-money laundering processes and procedures
- Investment services and advice for both the business and individuals in the family.
- Fiduciary services such as the management of trusts, companies and foundations.
- Family and Corporate governance including arranging family meetings, branding, and dealing with privacy issues and cyber security. A vital aspect is ensuring that the corporate governance of the family business dovetails with the governance structure of the family.
Next: The multi-family office
Why a single family office may work for your family.
- The family’s office is run by a few handpicked professionals. The family thus deals with “their people” rather than with unknown corporate individuals.
- The family remain in control of their destiny rather than being in the hands of a corporate. They can make their own decisions as they wish and can respond quickly when necessary.
- The relevant professionals are loyal to the family and are not distracted by corporate goals, performance measures etc.
- Their professional dedication means they have a shared interest with the family. The direction the family choose, after consultation with their professionals, is their only goal.
- The family is able to create an office that caters to their specific needs, their culture, their desires and their objectives. Each single family office is unique.