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As family wealth grows, so too does the need for personalised wealth management solutions. Family offices, once a niche choice, are increasingly becoming the preferred method for handling everything from investments to estate planning, philanthropy, and lifestyle management.
Establishing a full-service family office is an ambitious task—especially one that aims to provide comprehensive support beyond just financial management. While the flexibility and control of a family office are appealing, building and maintaining one brings its own set of unique challenges. A family office governance framework is essential for maintaining the operational efficiency of a comprehensive family office.
Below are the top five issues families face when setting up a full-service family office.
A full-service family office aims to offer more than just investment management. It might provide tax planning, legal services, estate and succession planning, lifestyle services (such as travel and concierge), and philanthropic management.
The challenge here is twofold: determining what services the family truly needs and ensuring that those services are delivered at the highest level. Each additional service requires specialised expertise, which can significantly complicate the office's operational model.
The more comprehensive the family office, the more complex it becomes to maintain coordination and efficiency across these services, ensuring a seamless experience for the family. These services can be provided by the Family Office or be bought in on a best of breed basis.
One of the first and most crucial decisions in setting up a family office is determining its structure. Should the office be a single-family office (SFO) or a multi-family office (MFO) serving multiple families? The legal and tax ramifications of these choices are significant.
An SFO offers complete control and confidentiality but can be more costly and complex to operate, especially if the family’s needs expand into areas like philanthropy or business succession planning.
An MFO, on the other hand, provides cost-sharing opportunities but sacrifices the bespoke nature that many families desire. The structure must also account for cross-border wealth, which can trigger complex international tax considerations and regulatory compliance.
One of the biggest hurdles in setting up a family office is recruiting and retaining the right talent. A full-service office requires experts across multiple fields—investment managers, tax specialists, legal advisors, and possibly even art consultants or lifestyle managers.
Finding professionals who can deliver in a high-touch, personalised setting, while also fitting into the unique dynamics of a family-run entity, can be difficult.
Compensation expectations for top-tier talent are high, and the intimate, often less structured nature of family offices can pose a challenge for individuals accustomed to more traditional corporate environments.
Furthermore, turnover in key positions can be highly disruptive, making retention strategies essential. A solution to this is to seek out the best of breed in each area and engage their services on a consultancy basis thus avoiding unnecessary cost and risk.
Wealthy families highly value privacy, making confidentiality one of the top priorities for any family office. A full-service family office, handling everything from investments to personal affairs, needs stringent protocols to safeguard sensitive information.
Cybersecurity threats pose a growing concern, as family offices become targets for hackers due to the vast amounts of wealth and personal data they control.
In addition, families need to establish policies to protect both physical and digital assets. Balancing this level of security with the accessibility of services—especially when family members are often global and require 24/7 access—can be complex.
Comprehensive systems need to be in place to mitigate risks while ensuring efficient day-to-day operations.
Governance is often a significant challenge when setting up a family office, especially one offering a wide range of services. Family offices need clear governance structures that outline decision-making processes, roles, and responsibilities.
However, family dynamics can complicate this, especially if multiple generations or branches of the family are involved. Aligning personal interests with the broader goals of wealth preservation and legacy-building can be tricky, and without a strong governance framework, decision-making can become fragmented or conflict-ridden.
Many families choose to set up family councils or advisory boards to guide the office’s strategy and keep the interests of the entire family aligned, but this too requires careful planning and communication.
Creating a full-service family office is a complex undertaking that demands careful thought and expert execution. From defining the scope of services to managing costs, acquiring talent, and navigating family dynamics, the challenges are as varied as the services offered.
Yet, when done right, a family office can provide unparalleled control, personalisation, and peace of mind for families, offering a holistic approach to managing their wealth, legacies, and personal needs.
Before you engage us, we’ll get to know you to make sure we’re a good fit in terms of understanding what is most important to you.
After our discovery call, we will summarise our understanding of your current situation and the key objectives which will ensure we're aligned with your goals.
Once you’re happy that we’re right for you, we’ll provide our recommendations and implement them for you. But there’s never any pressure from us to proceed – that’s just not our style.
We will implement your plan, constantly monitor and report on the performance to ensure your private wealth is optimised and aligned with your goals and working for you. Additionally, we’ll provide you with regular statements and a half yearly review to ensure that you remain up to date with any investment or tax changes and that we continue deliver for the long term.
