Reasons to start a family office and mistakes to avoid

Family offices have become increasingly popular in recent years as a way for wealthy families to manage their financial affairs. These private wealth management firms are designed to provide personalized financial services to wealthy families. But what are the right reasons for starting a family office, and what are some of the big mistakes to avoid?

Benefits of Starting a Family Office

The right reasons for starting a family office are varied, but they typically revolve around the desire to achieve a specific set of financial objectives. Here are some of the most common reasons:

1. Consolidation of Wealth Management Services: A family office can provide an efficient way to consolidate a variety of wealth management services, including the management of stock portfolios, impact investments, philanthropy, and the co-ordination of tax & legal professionals.
2. Customized Investment Management: Family offices offer customized investment management strategies that can be tailored to the specific needs of the family. This is especially important for families with complex financial situations, such as multiple businesses or real estate holdings. Or, because families would like to promote specific values through their investments such as impact investing or by working in a way that promotes these values.
3. Preservation of Family Values: A family office can help ensure that the family’s values and legacy are preserved for future generations. By working closely with the family, the family office can execute a business style that reflects the family’s unique values and goals.
4. Control and Flexibility: With a family office, the family has complete control over their financial affairs. This can provide a greater sense of security and peace of mind, knowing that their financial affairs are being managed according to their wishes and not as a number with a faceless financial services organization.
5. Cost Savings: A family office can help to reduce the overall cost of wealth management services by leveraging economies of scale and negotiating lower fees with service providers.

Mistakes to Avoid When Starting a Family Office

While there are many good reasons for starting a family office, there is also a big mistake to avoid: starting a family office for the wrong reasons. One common mistake is to start a family office simply because other wealthy families have done so. This can lead to a “keeping up with the Joneses” mentality, which may not be a good enough reason to undertake the significant cost and effort required to establish and operate a family office.

Another mistake is to start a family office without a clear understanding of the family’s financial goals and objectives. Without a clear plan in place, a family office can become an expensive and ineffective way to manage wealth.

Conclusion: How to Establish a Successful Family Office

Starting a family office can be an effective way for wealthy families to achieve their financial goals and preserve their legacy for future generations. However, it is important to do so for the right reasons and with a clear plan in place. By working with experienced professionals and taking a thoughtful approach, families can establish a family office that meets their unique needs and objectives.

Our Experience: Customizing Services for Each Client

Our family office has gained over a decade of experience with our clients. We’ve learned that a family office works best when the services provided are customized based on each client’s unique objectives.