Family offices are usually small companies which are intentionally created for affluent families or the super-rich to oversee the family’s fortunes similar to the Rockefellers.  There will be an appointed staff with suitable skills who will be keen enough to administer tax planning, investment management, estate planning and the likes.  Family office does not only manage the family’s funds but could also arrange for various softer services.  It could range from matters on philanthropy, art and wine collections, arranging family vacations, provide personal security up to wealth management education to the different family members.

Times are changing and apparently, you need not be a Rockefeller to engage in a family office.  Surely, there will be costs involved in joining a family office and it does not come cheap.  A personal chief financial officer who delivers at your call comes with a price to pay. It is a bit costly to avail of the financial services but truly worth considering.

A single-family office is mainly dedicated to a single family as the name suggests.  It had gained acceptance during the 1800s.  Traditionally, the single-family office provided similar services as private banks and wealth managers for just one family.  At present, some family office experts come to an understanding on what services a family office should offer, taking into account of the amount of funds that a person or family needs to put into.  Each client, which is the family, is different with having distinct coverage and transactions on wealth management.  It is just fit to establish the method of pricing the family office for a flat fee which enables the client to modify the variety of services needed but also considering the nature of the family enterprise.

Industry experts share that creating a family office can cost $1 million or more annually.  Practically, it implies that family offices work for families with assets of at least $100 million.  Recent studies mentioned that families who are merely rich are expected to grow which is also the reason why family offices continue to thrive.  Some family offices are using economies of scale for the business to profit and thereby can accommodate the less-wealthy family.  In effect, multi-family offices are gaining popularity which allows handling numerous or multiple families as clients.  These clients are involved in different businesses or industries.  At times, they have too much on their plate that the affairs of the family wealth are put aside.  Sadly, one could not be an expert in contrasting industry or profession.  Creating a family office whether single or multi-family, turns out to be practical if the family’s goal is to have a logical outcome of the assets which is to protect and eventually allow it to grow.  This is more significant to the less-wealthy family for it provides them growth and development on their investment and funds.

A family as a client can benefit in a family office, especially with a multi-family office set up because of the concept in sharing the costs of an upscale wealth management services among other families.  These services roughly costs up to 1% of assets annually per family.  Clients of multi-family offices incur less expense for staff salaries and other overhead brought about by the sharing of the costs with other clients.  There are also discounted fees that are charged to pension funds and endowments.  More often than not, it offers a sliding scale to families with assets of more than $200 million which allows them to avail of the lowest fees.  These fees may cover for consolidated financial reports and investment management.  Others apply additional charges for estate planning.

The family office, be it single or multi-family, serves as a facilitator for open and truthful family communication.  This may be difficult to quantify but it is essential to a family whether they are rich or super-rich.  It cannot be denied that effective communication is a channel to avoid family splatter which at times leads to litigation. Regrettably, family disputes mainly involve misunderstanding in finances and there are cases where family relations are torn apart.  Worse, it is done in public.  Fortunes and reputations are ultimately destroyed and in a way, a family office is a venue to keep harmonious family relations through transparency in communication while availing of the skills and expertise of professionals.

The family office concept is not mainly intended for the super-rich because its services can be customized and fees can be adjusted.  It is a relationship between the family and its group of experts, advisors and service providers.  Definitely, it can be availed not just of the super-rich but even of the merely rich.  These professionals are skilled and proactive in terms of the management of the family’s fund and investments.  With their assistance, the family can yield more gain and not minding the costs incurred by the family as a result of careful planning and effective communication. A family office can deliver what is fundamental to a family which is a solid relationship in carrying out the family’s goals and to be passed on to generations.