The concept of a family office has been doing the rounds over the years, but what does this mean and can it add value and, more importantly, be an effective tool to assist a family in achieving its goals.
Broadly, the concept of a family office encompasses much of what we do as trusted advisors for our private clients and their business or investment structures. It is a planned approach across several important facets of a family group, with a specific and targeted objective(s) that are agreed upon, monitored and adapted from time to time.
The operation of a family office can be undertaken in-house and/or with the support of third party advisors, brokers or financiers. The individual aspects of a working family office plan are often categorised into the following key areas:
- Strategic planning
- Management reporting
- Back office and banking support
- Statutory compliance
- Taxation compliance
- Philanthropic management
- Family governance and communication
Establishing a family office can be a complex task and each family’s circumstances and goals need to be considered. Approaching the establishment of a family office from a “one size fits all” perspective is generally not advisable and clearly can result in the stated goals of the family or key individuals not being achieved or they are “lost in translation”.
A family office approach to your family circumstances however, can often be the right solution for your family, especially if it is undertaken in a logical and phased manner, engages with collective family members and is adapted utilising key support services in a proactive and timely manner.
Where you have determined that a family office may be an attractive solution for you and your family, some key matters that should be considered on a personal basis, include:
- What is the family’s vision and values – are all members of the family group clear and in agreement as to what they are building together and what is required to achieve this?
- What are the issues or risk that could impact the family’s goals – having set the goals that are aligned with the vision, distractions need to be identified and addressed.
- What is the high-level family office plan and what are the priority initiatives in the short, medium and long term?
- What are the expectations of each family member, third party support or other key stakeholders – are they clear as to their on-going role and focus including ultimate decision making responsibilities and overall family communication?
The above is a snap shot of matters that should be considered in establishing a family office. There are clearly many other complexities and intricacies in determining how such a concept should be implemented to your personal family circumstances.
Should you wish to discuss our family office service offerings in further detail, please contact us or speak to your ESV engagement partner on 02 9283 1666.