How to Build a Family Office
How to Build a Family Office
A family office in this regard is a management advisory firm that focuses on private wealth. It covers a wide range of areas which include taxes, investments, lifestyle management, insurance, giving to charities, and more. While traditionally a typical family office was created for individuals or families earning millions of dollars each year, today there are more people who earn considerably less that are embracing the family office concept.
Putting all wealth management services into one bundle is the goal of a family office. Setting up such an office will require some work, but the rewards will be worth it. What follows is how to create a family office that will serve you and your family for the rest of your life.
Where your current financial situation stands is the first step towards building a family office. This will require consultation with accountants, legal counsel, and financial advisors to get a handle on your current situation. Essentially, this is the stage in which you inspect, identify potential issues, and address them before creating a family office.
How to Build a Family Office: Protection
Once you know where your finances stand, the next step is to protect your assets properly. In addition to the liquid assets, your real estate, collectibles, and other assets should be put into a trust and invested properly and strategically. This will not be necessary for items such as vehicles as each member of the family should be responsible for such things.
The goal is to protect the wealth of your family first. This also means taking out appropriate insurance policies that cover potential damage from an accident or from being sued.
Build a Family Office
From the foundation of the wealth you have right now, plans should be made to increase it over time. This means creating wealth for you and the generations to come. Investing in real estate, employing long-term approaches to building capital, and creating equity-style investments are just some of the ways you can create more wealth.
Pulling the different entities together inside your family office can create a trust that passes from generation to generation without having to go through probate.
Maintain a Family Office
Within the family office will be a financial and legal structure that can be relied upon for many years to come. The focus should begin on maintaining the wealth being built, addressing new issues as they arise, and expanding opportunities for new wealth sources. The structure created can be expanded based on new opportunities that arise, but the primary goal is to maintain the wealth that has been created.
Seeking out the best talent in accountants, legal matters, and tax advice should be part of the family office as well. Just as the best personal trainer helps keep you in good physical condition, so too do the right people keep your financial situation as healthy as possible.
Leaning how to build a family office will set you on firm financial ground. The result will make your future investments more productive, avoid potential issues, and provide more security for your finances that will serve you and your family for a long time.
How to Build a Family Office, ©Sophisticated Investor 2021
About the Expert Contributor
Zanthe Alexander Bentley is a finance veteran with over 25 years’ wealth management experience advising both family offices and institutions on their corporate finance requirements including capital raises (debt & equity), restructurings and M&A activities. He has significant experience in investment management and investment banking and spent nine years at UBS focused on convertible bond arbitrage and equity derivatives.
Prior to getting involved in Asset Management he expanded a small Spanish brokerage from a handful of staff in Barcelona to a diversified brokerage company with over 150 personnel spread across 9 countries, transacting deals from High Grade to High Yield Fixed Income and Loans; Structured Products through to exchanged traded equities.
After taking time to focus on family office activities in Asia, Zanthe-Alexander now leads an ambitious zero-leveraged fund providing exceptional growth and income to Sophisticated Investors.