Family groups decide to start offices for many different reasons. A family typically starts a family office to invest the assets generated by the sale of a family business (or after another realization of significant liquidity). FOX research indicates that for a family with US$100 million or more in assets—and if the family has a desire for privacy and control and is willing to manage a sophisticated financial business—it makes sense to consider a dedicated family office.
Control of the Assets: The family’s stated goals for financial security, wealth preservation, and family legacy drive the work of the family office. With a family office, the family is able to directly oversee decisions about family financial matters.
Continuity of the Family: Many families rely on the family office to foster a sense of community and family unity over time. The family office serves as a partner in the work of sustaining the family’s assets.
Objectivity in Decision-making: Clients of a family office have access to a dedicated team of trained professionals whose sole purpose is coordination of the family’s key assets. There is no conflict of interest in this business model; the interests of the family are aligned with the interests of the advisors because the advisors work directly for the owners.
Customization of Services: The service menu, educational offerings, and customized financial reporting of a family office are developed with the family and for the family.
Confidentiality of Information: This dedicated business entity provides the best protection for the family’s privacy and security of financial information.
Integration of Financial Strategies: The job of the family office is to consider the impact of each financial decision—from bookkeeping to philanthropy—on the family’s strategic objectives.
Education of Owners: A primary role of the family office is to provide family members with the information they need to make informed and effective financial and philanthropic decisions.