The establishment of a family office signals a strategic pivot towards an organised approach in managing and preserving generational wealth. However, reservations arise. Below, we explore some common concerns and provide objective insights into addressing them.
Internal Family Office and the Perceived Bias
One valid concern is the potential for internal biases in a family office, particularly with larger families where interests might diverge.
Addressing Bias: It’s beneficial to institute a clear governance structure early on. This should aim for:
- Equitable representation of all family interests.
- Rotation policies for key roles among family branches.
- Periodic reviews by external, impartial auditors for transparency.
The Appeal of Industry Titans
Engaging with top-tier investment banks or renowned accountancy firms carries a sense of security given their market stature.
An Objective View: While these giants excel in their domains, managing the bespoke requirements of a family office might not be their primary expertise. It’s worth noting that these entities cater to a broad client base, which might not align with the specific, intimate requirements of a family office. However, their services can be leveraged for specific functions, blending specialised capabilities with a more personal touch.
Independent Advisory and its Advantages
Choosing an independent advisory offers certain advantages:
- Customised Solutions: Independent advisors often have the flexibility to offer solutions that are more in tune with a family’s unique needs.
- Deep Engagement: Independent consultancies, given their scale, can engage at a depth, understanding a family’s history, values, and aspirations.
- Collaborative Ventures: An independent advisory can collaborate with various industry players, ensuring a well-rounded service provision.
- Cost-effectiveness: Often, without the overheads associated with larger firms, independent consultancies can provide top-notch services at competitive rates.
Building Family Consensus
Here are some steps to facilitate consensus-building:
- Open Dialogues: Encouraging open discussions helps identify and address concerns.
- Educational Initiatives: Organising informational sessions about the family office concept can dispel myths and build understanding.
- Transparency: Ensure that all processes, decisions, and engagements are transparent, fostering trust.
To conclude, the path to setting up a family office might seem daunting with numerous concerns. Yet, with informed decisions and the right advisory partnership, these reservations can be transformed into pillars of a robust, efficient family office structure. As always, the aim should be to ensure the legacy’s preservation and growth for future generations.