Family Office FAQs

Find answers to frequently asked questions about the family office concept.

 

Q: What are the greatest challenges faced by family offices?

A: Some of the greatest challenges family offices face include:

  • Succession of leadership
  • Family agreement on purpose
  • Attaining access to strategic advice
  • Being “penny-wise and pound-foolish”
  • Managing partnerships for members
  • Finding solutions that offer consolidated reporting

 

Q: What criteria should I use to evaluate an advisor?

A: FOX consulting clients often cite the following:

  • Integrity and firm experience relevant to owner’s situation
  • Clear alignment of advisor interests with owners
  • Flexibility in supporting diverse client needs
  • Robust and accurate accountability system
  • Access to quality investment advice
  • Access to managers for alternative asset classes
  • Ability to support or serve as co-trustee or fiduciary
  • Proactive education for involved family members
  • High level of client service and responsiveness

 

Q: What holds a financial family together?

A: Here are the things that hold a financial family together:

  • Common and unique family heritage
  • Unified family vision of the future
  • Pooled investment opportunities
  • Multi-generation ownership structures
  • Shared philanthropic mission

 

Q: What legal structures are commonly used for family offices?

A: Depending on jurisdiction and purpose, the legal structure of a family office can take a variety of forms.

In the United States, the most common legal structure for a family office is an LLC (33%), followed by the S Corp (20%), and C Corp (16%). Fourteen percent (14%) of U.S. offices function as part of the operating company and have no formal structure and less than 10% are structured as private trust companies.

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