The phrase Family Office means some point of homogeneity surrounding a group of associations. Family Offices are often different in structure, size, source, and strategy – as the person whose wealth is being managed.
Structure: Family offices structure can be fully-fledged investment advisors firm to just one cited individual who manages individual assets on their behalf.
Size: Family offices wealth management ranges from few millions of dollars to multiple billions.
Source: Family offices perhaps exclusively structured i.e. either single-family or multi-family.
Strategy: While assets protection on a real basis is usually the main aim of family offices, capital appreciation or expansions remain also crucial depending on the nature of the principals.
Whether you talk about single or multi-family offices, both are important for high-net-worth investors. It is considered an innovative and unique practices for wealth management and investment. In this article, Moshe Strugano explains the value of family offices nowadays and in the future. With the rush in the esteem of the theme, we will talk about the basis for setting up a family office.
What do you mean by Family Office?
Firstly, you must know the real meaning of the family office. Even the categorization of a group as a family office would be diverse depending on who is asked, however, generally the family offices are any firm, which is investing money directly for the definitive principal. When we compare it to pension funds, hedge funds, endowments, etc. family offices are not pooling intermediary wealth and then investing. They are working with a solitary – or multiple – family’s resources.
Therefore, yet defining a family office is rather exigent. In accordance with the heretofore mentioned explanation, a daughter who manages his father’s $200,000 retirement account by online trading would tentatively have a family office. You will be surprised to know that there are family offices, which are nothing more than the primary and one advisor.
What are the roles of the family office?
You can consider family offices as investment funds, which manages the financial resources of a family. They work in a similar way to standard investment funds, but with more litheness towards the requirement of their exclusive principal.
How much wealth do you require to start a family office?
It is generally assumed that if an individual family has a net worth of more than $100 million, then it’s important to have a family office to deal with all kinds of wealth transactions.
Number of family offices in the world
It is estimated that there are approximately 6,500 and 10,500 family offices are present in the world.
Family Offices are well located to centrally supervise many of the strategic activities of the family beyond the expansion of its financial portfolio. The Family Offices support crucial functions such as:
Executing the long-term goals and vision of the family
Carrying out the agenda of the family council
Managing family authority
Planning talent growth programs to organize the next age group, and
Other actions to develop the probability that the family—not just its capital—flourish over generations.
Final Overview
The Family Offices always keep a strong link to the family by supporting it attains its strategic goals. While assets management and savings oversight are main offerings, the Family Office must offer the right amount of time and sources to the non-financial activities, which will support maintain the family itself, alongside its money.
Moshe Strugano and Co Law Firm