Family Offices

Over time, enterprising families can accumulate significant wealth and a wide range of business and personal assets.

As the family grows, rather than allow the assets to be split up (or for some assets like land and buildings, accept that they have to be sold and the proceeds split up) among individual family members, it can often make sense to manage these assets on behalf of some or all of the family.

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.

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
- Diversifying
- Saving tax
- Philanthropy
- A means of keeping the family connected
- Etc
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.

How?

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.

More information

What Next?

Our Client Feedback

Our planning for the future had become stuck in lots of technical detail and it felt that we were not making enough progress. The way FBS went about their work guided the family firmly but sensitively through the process of making key decisions; the big picture ones that then make it easier to deal with the detail. Their process for doing this kind of work is markedly different from the way other advisers operate and we can vouch for the advantages of getting both generations involved in the process.
Morris Hamburger Searchlight Electric Ltd
Family Businesses are complex and emotional organisations. It is amazing how many professional advisors try and separate the business from the family and fail to comprehend the many layers of power and control involved. It is refreshing and comforting to know that there is a truly world class expert available in the FBS team who can understand and deal with the complexities of family businesses and also calmly and logically work out solutions . Their knowledge of family business is outstanding and enlightening and their approach is very professional, amiable and ultimately achieves outcomes. They are able to keep the process on track and that is important. I have a great deal to thank the FBS team for and will be back to see them when it is time for the succession planning in the future.
Jane Wylie-Roberts
I have known FBS since their inception and have watched them develop and hone their expertise for over a decade. Aside from their outstanding consulting services, they have an amazing depth of knowledge and experience that they share generously with the family business world through training and publishing.

FBS is a world-class resource.
Martin Stepek, Chief Executive, Scottish Family Business Association
Family Business Solutions was asked to advise on constituting the family interests in a much-loved landed business. The prospect of greater financial success, and the passing of interest through the generations, required a more formal structure. It was a long, detailed and sometimes tense process -but FBS guided us through it with great skill, patience and discretion. Without that guidance, it would not have happened. And now the family governance is on a completely different level.
Artordinsh Estate company Ltd and Raven family
FBS worked with both generations of our family and the board of directors to help us develop a Family Constitution. This now helps guide us in many areas of importance to the family and the business. There’s a lot of work involved in creating a constitution and it was essential for us to have the right information and advice to ensure that ours would last for a long time.

The work FBS did with the next generation of our family was hugely helpful.
Jim Walker – Walkers Shortbread Ltd