Whether the day to day management is done by members of the family themselves or by paid professionals, a Family Office is fundamentally the structure used to do it; and although it can vary in size and complexity depending on the size, wealth and needs of the family, in truth, every family has a Family Office in some shape or form.
- Family Business Resolution
- Family Business Consulting
- Family Business Advice
What can go wrong?
As family offices tend to “evolve” as the result of well intentioned efforts by parents/senior family members and their advisers based on various assumptions, understandings and expectations (usually the seniors’) , it can end up as a “bits and pieces” structure that the wider family often know little about and understand even less. Not surprisingly , at some point down the line, this lack of a shared understanding and involvement is likely to cause problems and as family relationships are just as much at risk as personal wealth, that can be serious.
What can be done?
Take the family through a process to establish :-
- Agreement on what the Family Office is there to achieve. Eg some or all of the following
- Maximising investment returns through co-investment
- Collective purchasing of services
- Saving tax
- A means of keeping the family connected
- Targets for the Family Office to aim at (having agreed the main purpose/s) and a means of measuring performance
- An appropriate governance structure (eg Family Assembly/Family Council) and a Family Constitution
- A structure to enable effective 2-way communication between the Family Office (ie the people managing the family’s wealth) and the family.
For a family that wishes to remain connected and in control of their collective wealth, off the shelf “family office services” offered by traditional advisers ( which are effectively their existing private client and investment services in a new wrapper) will not deliver the structure outlined above. This can only be achieved by taking the family through a tried and tested process such as that delivered by FBS.
Why use FBS?
This is not a straightforward process. Family members will be asked to consider things about which they may have no knowledge. In a similar way that processes involving tests and questionnaires are used in psychometrics to draw out information that cannot be established by direct questioning, much of what is required in order to establish shared values and purpose amongst the family can only be achieved through the application of the FBS consulting process – something that is the result of years of research, application and refinement.
Furthermore, the views of family members will often be conflicting and so it can get emotional . Consequently, an impartial, independent third party there to guide the family through to consensus will prove invaluable.