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The Family Office

Although there is often a family business at the core of their activities, wealthy families today inc
The Business of Family
The Family Office
By Mike Boyd • Issue #16 • View online
Although there is often a family business at the core of their activities, wealthy families today increasingly see themselves as diversified enterprises managing a collection of shared commercial, legal, financial, real estate and philanthropic interests.
A family office is an investment, liquidity management and administrative/concierge centre.
The rationale behind the growth of family offices is that the co-ordination of all the various professional disciplines necessary to manage a family’s financial affairs results in much more efficient and effective asset management and advisory services for stakeholders.
In the past, families generally relied on a single financial institution to meet all of their investment needs, but complex specialisation and fragmentation in the financial services industry and a desire for control after the GFC have created opportunities for independent family offices to capitalise on the huge array of products and providers now available.

Source: PWC
Source: PWC
The family office should have a formal governance structure in place with a management board (consisting of family members and independent outside advisors) and it should report to the family on operational matters and financial performance.
Whilst no two family offices are the same as they have been established and evolved to serve the individual needs of their families, some commonly delivered services are included below.
Family Office Services
  • asset allocation
  • monitor investment performance
  • manage risk
  • develop financial planning
  • oversee tax compliance
  • co-ordinate group insurance
  • banking
  • accounting and taxation services
  • implementation of intra-family transactions such as share transfers and estate plans
Some family offices go even further:
  • non-financial consolidated reporting
  • education & training services
  • project management
  • property management
  • family archive administration
  • planning & execution of lifestyle concierge services
Source: Family Enterprises (Leach, P).
There are two main family office models:
The single family office (SFO) and the multifamily office (MFO).
The SFO is the traditional model, serving a single family. MFOs, which offer services to more than one family, often form by a family deciding to open up the services of their SFO to other families, spreading costs and risks across a wider asset base and ensuring the sustainability of the MFO in its own right.
Recommended Book:
Borrowed from Your Grandchildren: The Evolution of 100-Year Family Enterprises
This Week's Podcast Episode:
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Thank you for your support - every bit of encouragement is greatly appreciated.
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Interesting links:
Inside the Todd empire - NZ Herald
Inside the Breakup of the Pritzker Empire - WSJ
Stay in touch
Mike Boyd is the co-owner and CEO of the Vroom Group, Founder of Prosura insurance, Investor at Mudbrick Capital, Host of The Business of Family Podcast and an active member of YPO.
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Mike Boyd

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