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It is important to identify objectives in order to formulate strategies and make better financial decisions.  For successful business owners especially one’s coming from affluent families, planning for the future also involves protecting properties and investing the family’s wealth  efficiently.  In this way, business owners will be able to pass on a large estate to their spouse or children.  Considering these scenarios, there may be more ways to look after a family’s hard earned assets. 

A family office is one way a business owner may obtain help with managing the affairs of his and his families wealth, when the intention for the business owner is to be less occupied managing the finances and day to day operations of his families financial life, this addition of the family office will translate to more time with the his family and friends.  Primarily, a family office is a private firm that caters for the needs of families covering just about everything to do with their life if so desired.  It aims to oversee the family’s wealth and not merely managing assets in a portfolio but providing advice on any financial issues that may arise.  It is keen in meeting a family’s personal wealth goals such as retirement, tax planning, investment management, estate planning, philanthropy or collections such as art and wine.  It involves a process employing thorough diagnostic of the status of the family’s wealth in order for the firm to have an idea of the client’s enterprise and action plans, if available.  The evaluation process that the firm offers may vary.  However, it always identifies the client’s needs or the services that should be availed in order to implement programs on wealth management strategy.

There may also be a need for the family office to understand and construct legal structures which will protect the family’s assets against litigation, creditors and taxes. It will be essentially helpful if the family operates across several countries and has assets located around the world.

A family office plays an important role in times of instability such as when the principal family member or members become unwell or they pass away, the family office creates a level of stability in the family and will provide a process to efficiently manage the family’s investments and transfer the running of the estate to the next generation. It may also provide stability to the operating businesses and other assets in the case of heirs not be able to properly manage the estate due to their lack of involvement in the business or due to other instances where the spouse or children would fail to know the status of assets and how to effectively manage these assets the absence.

At times, business owners tend to neglect the family’s financial affairs as they are caught up with the daily business operations.  Managing both their company and the family’s wealth can be difficult and most time consuming, putting too much on their plate.  It is like having two major functions with different goals and execution.  With a family office, a business can also be managed competently in order to generate more revenue with minimal cost.  It enables to allow  the family’s financial affairs to be look after by experts who are not try to sell you anything.

Recently, family offices are offering their services to those who are simply rich. Availing the services of a family office may be expensive but employing your own personal chief financial officer also comes with a price tag.  In this case, the help may come handy.  Clients of family office can pay less for staff salaries and other related overhead expenses as it can be arranged that costs can be shared with other clients.  Discounts are also given since family offices can get the fees to be charged to pension funds and endowments.

Apart from giving financial advice, the family office is also beneficial and value adding by fostering family harmony through creating better communication among relatives.  It also serves as a channel towards financial education of family members and an introduction on how to manage their own funds or investment when the time comes.  Communication is integral on wealth preservation because it will be passed on through generations as it is also interconnected.  Sustaining the family’s wealth involves a great deal of hard work, perseverance, trust and a common family goal in order to succeed.  Thus, family education and conflict resolution can help promote the preservation of wealth.

The conclusion of the financial crisis brought about the interest for sound financial advice and good asset management.  A family office can provide unadulterated risk-benefit analysis to a family’s assets.  It allows the family to weigh in the benefits according to what service that the family wants the most.   The family is presented with options and in the process, they are able to learn and make better financial decisions.  By looking around family office firms, clients might be able to avail of services even with a lesser value on net worth.  It is also important that clients look for a firm of trusted and expert professionals in their fields in order to execute the same financial plan.  Business owners and a family office firm may have different objectives and focus.  However, the end result to both includes stability and longevity which can qualify for a lasting partnership.