We have identified seven common office types and have found that many FOX members describe themselves as a combination of two or more of the ones defined here.
The founder's office supports the activities of entrepreneurs who are running or have sold the operating company(s). It is organized around the goals of the founding family and typically addresses questions regarding ownership structure and other financial issues outside of the operating business.
The business owner office supports the shareholders of a core operating business. The primary role is to maintain business control through effective wealth transfer, providing strategies for stock repurchase or leverage as needed to generate liquidity for owners. The office also supports owners’ financial needs for income, diversification of assets, and risk management.
These offices support owners who are committed to launching new business ventures beyond the original business that generated the wealth. The focus is typically on wealth creation rather than preservation and risk-taking strategies rather than risk management strategies. Opportunity analysis and proper deal flow are key challenges for this type of office.
The investment office supports owners who have chosen public equity investing over private equity investing. The primary focus of the office is to coordinate, manage, and oversee the investment process. Strategic and tactical asset allocation provides the discipline for diversifying wealth across 12 to 16 asset classes, on average. Family members often optimize their buying power by pooling their assets to invest in investment partnerships.
The compliance office supports owners who are focused on wealth preservation. The office functions as a cost control center focused on reducing financial costs as much as possible each year. Compliance offices manage tax returns, banking relationships, and insurance services, and typically they use external advisors for investment and wealth transfer planning.
The philanthropy office supports the goals of the owner whose goal is to distribute the majority of his/her wealth to philanthropic causes. Family foundations are often at the center of the activities for this type of office. Activities to support the lifestyle needs of the owners are managed separately to comply with nonprofit regulations.
The multi-generational office supports diverse owners from multiple branches of the family. This office is challenging to operate as it supports the broadest range of services and the greatest diversity of clients. Multi-generational offices sometimes open their doors to other families as multi-family offices to increase the purchasing power of the owning family group.