For many people, taking care of their finances means putting what they can away in a GIC or RRSP. Saving and investing is always a good idea, but the more you have on hand, the more options to invest, which can be complicated.
Some high-net-worth individuals are busy running businesses and require a more hands-on approach to managing their finances, and for these people, a family office is the right fit.
How do you know if managing your assets should be handled by someone more qualified? Who needs a family office?
What Does a Family Office Do?
A family office is a wealth management firm that offers a total solution for taking care of the financial and investment needs of an affluent individual or family. They provide:
- Tax services
- Charitable giving
- Estate planning
- Investment management
- Succession planning
- Setting up trusts
A family office will determine a family’s complexity because of their wealth and take responsibility for the next generation’s education to successfully handle their wealth. They also may take care of other non-financial matters like handling travel arrangements, organizing private schooling and other household management duties.
Who Needs a Family Office?
A single-family office is typically for people with investable assets exceeding 100 million and much higher net worth. There are also multi-family offices that manage the assets of more than one family and outsourced family offices that may comprise various professionals collaborating to manage the assets. Who needs one?
Those That Want To Control Their Assets
High net-worth individuals and families are most interested in wealth preservation and financial security. They want a professional company to oversee their assets and investments to retain and grow their worth over time. They also want to see their wealth become a legacy for their descendants and need teaching for those who come after them to understand and respect this accumulation of assets.
Those That Want Professionals To Make Financial Decisions
It can be hard to manage money effectively, especially when you are busy pursuing business growth, and those who have large amounts of wealth need a dedicated team to care for it.
There is no disconnect with a family office because they are aligned with the investor’s goals. They understand what they want and work to coordinate their efforts toward achieving those financial goals. This hired professional team works directly for the owners and is trusted to make all key financial decisions with their client’s assets.
Those That Want Customized Service
Anyone can hire an accountant or a financial planner to help with their businesses and track assets. Those with a much larger portfolio, consisting of 100s of millions of dollars, need more than simple investment advice; they want a whole menu of services.
This requires a dedicated team to track and shift assets and investments toward optimal growth, but it doesn’t end there. They offer independent advice, integrated strategies and individualized services to fit the client’s needs. This has them caring for everything the individual or family needs to thrive in their affluent life.
Those That Want Confidentiality
High-net-worth families are looking for confidentiality and privacy concerning their accumulation of wealth. For them, it is much more than owning assets; it is the personal holdings of a family that doesn’t want to attract attention or gain notoriety.
A family office is there to protect the family and shield them from the outside world. They respect the family’s privacy and consider it paramount to their job.
They Want to Be Financially Educated
Highly successful people are not experts in all fields. Most people who use the services of a family office are prominent business owners, top athletes and entertainers. While they excel at their chosen profession, they may not be financially savvy.
Having a dedicated team of financial professionals working exclusively for you to handle your wealth is vital for retaining and growing it. Superwealthy people know their strengths but also understand their weaknesses and look to have their assets taken care of for them without worry. They also want to understand and learn about these financial investments and the lasting effects they produce. A good family office will explain their strategy so the client is informed about their financial and philanthropic decisions.
This is who needs a family office. If any of these reasons resonate with you, consider having a professional team take on your financial management and secure your generational wealth. With a family office managing your assets, you can create more and make your family and the world happier and more secure.
