Key Things to Consider when Establishing a Family Office

Family Office Nov 18

Key Things to Consider when Establishing a Family Office


Establishing a family office can be time consuming and costly, however with the right support and knowledge it can also be a simple exercise.  Building and maintaining a successful family office that is unified, clear and futuristic, however, can be difficult.

A family office will go beyond managing and safeguarding family wealth.  Usually, a family office is a multifaceted organisation that acts as an intermediary between family members and service providers (e.g. accountants, lawyers, bankers, etc) that together will help secure the financial future and legacy of the family by building, preserving and transferring family wealth in a structured manner.  This can be a difficult task, and becomes even more difficult where differing family personalities and agendas are thrown into the mix.

To assist in creating a successful family office that will achieve the goals and vision of the family, the following are some of the things that should be considered:-

  • A unified family vision about what you want to achieve: There needs to be a clear, common purpose for the family wealth with well-defined strategic goals and a plan about how to reach them.
  • Open and honest communication: It’s paramount to create a culture of trust where family members can regularly and candidly express their thoughts and ideas. You’re obviously not always going to agree, but listen carefully to one another and respect each other’s viewpoints and feedback.
  • Emotional ownership: Family members need to feel part of it, so time must be spent in understanding everyone, their aspirations, and the level of engagement they would like.
  • Outsource what you can: This reduces costs and importantly, allows you to work alongside highly experienced professionals that have a deep understanding around your issues. They can also provide a much-needed level of objectivity when family dynamics and emotions come to the fore.
  • Understand your future dynamics: Preparing the next generation is one of the most difficult aspects, yet one of the most critical. Generally, the younger generation are kept in the dark and are not included as part of the decision-making process. To maximise the chance of a successful transition, the planning process should start early. It’s important to educate them – on the financial and non-financial side – and instil the right values to the inheritors by having open and collaborative conversations about how they can invest their wealth and plan.

What also stands out is the lack of a strong network for this next generation. This takes time to build and needs to be recognised. Like the comment above about working alongside professionals, the next generation needs to be engaged in the business or asset decision-making to build their experience, skills and networks to deal with the issues.

A well-established family office can have numerous benefits in ensuring that the transfer of wealth from one generation to the next is successful and achieves the vision and goals for the family.

Should you have any questions or need assistance in relation to this matter, please call your relevant ESV engagement partner on 02 9283 1666.