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Thinking About a Multi-Family Office?

Discover the value of proactive and holistic advice

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Your family may not feel like a business — but at higher levels of wealth, decision complexity (and stakes) can rival those of a large company. There are obvious matters like investment decisions and wealth management. There are legal disputes, negotiations, and tax planning. Finally, someone has to handle those practical decisions that affect your family’s daily life: choosing a new personal assistant, managing school applications and logistics for your children, scheduling medical appointments, coordinating international travel paperwork, and much more.

The simplest solution, and one that many families in your situation usually go to first, is to simply hire more professionals to help. After all, you are no stranger to vetting candidates, delegating assignments, and supervising the work. However, there’s a problem with this approach — and if you are considering a family office, you may have bumped into it already.

Financial wealth, time poverty

You have access to some the best talent money can buy. The trouble with hiring those professionals one at a time is that you must interface with, supervise, and pay a dozen or more specialists. You must become the project manager who ensures they share relevant information (while protecting your privacy), work together when the situation calls for that, and get properly disengaged when their services are no longer needed.

And all of that takes time away from running your business and being present for your family.

In addition to time poverty, you may have also discovered a services gap. Advanced levels of complexity of your business and family life place a premium on holistic advice and proactive service. You need a professional team that will anticipate your needs from a comprehensive understanding of your circumstances. You need utmost responsiveness. You also need specialized investment options and tax planning strategies that don’t become relevant until someone hits your level of wealth — ideally from a team that has hands-on experience with those strategies. You want access to a broad range of legal expertise because your legal risks transcend international borders.  

Finally, you want help with managing family dynamics. From family governance to education and legacy-building, you need a new set of rules that everyone in the family buys into.

If that’s the case, you may be ready for a family office.

What services can you get from a family office?

As you begin your research into family offices, you will quickly discover that once you’ve seen one family office, you’ve seen … one family office.

Family offices are as diverse as the families they support. However, there are commonalities in the types of services available. Here is a list of services borrowed from the Family Office Exchange, which is a professional association and a source of best practices. Look at this list as a service menu, as many family offices offer an a-la-carte approach.

  • Integrated tax and estate planning

  • Investment strategy

  • Trusteeship

  • Risk management

  • Lifestyle management (concierge medicine, family security, travel)

  • Recordkeeping and reporting

  • Family continuity

  • Family philanthropy

As you consider your needs, be mindful that some pain points will be obvious and easy to identify — while others may only emerge through introspection and conversations with family members and other stakeholders. Everyone has blind spots, and yours may be hiding problems and solutions you aren’t present to yet.

Which type of a family office should you choose?

There are two large categories of family offices. Single family offices (or SFOs) are founded as an in-house solution to managing all your business and family matters. This path offers a high degree of control and self-determination. Three significant downsides to this approach include high cost (both initially and on the ongoing basis), potential for talent and skill gaps, and your lack of experience in managing a family office. In other words, you don’t know what you don’t know, and running a family office is not your area of expertise. The other option is a multi-family office (or MFO for shorty).

A multi-family office structure allows you to share the expense of running the office with other families. You get access to a broader range of experience and specialty knowledge. You will benefit from the combined experience of the extended team that can identify risks and offer solutions they have successfully implemented for the other families they serve. Of course, you must ensure that your philosophy and style fit well with the other families under the same MFO umbrella.

Choosing the right multi-family office for you

Ideally, a decision to choose a multi-family is only made once in your lifetime. It is important to approach this choice with all the due diligence and thought that it deserves.

Start with the services you know you need. Then, draw on the opinions and expertise of professionals you trust (and other family members) because additional pain points and service needs may be hiding in your blind spot.

Evaluate specialty area expertise offered by the multi-family office you are considering. This should include their in-house talent, as well as their extended network of vetted outside professionals.

Finally, don’t overlook the philosophy and communication style of the family office. The very same core services may be delivered very differently depending on which MFO you choose. The MFO team will become an extension of your family. They will support you through some of the most stressful times in your life, so you must be certain that you have found the right fit.

If you are considering a transition to a multi-family office, we invite you to explore our offering. We are here to help you sort through your options, answer your questions, and ensure that your choice supports your family’s goals and legacy for years to come.