Where there is opportunity, there is risk. Often the power and success that affluent families enjoy are accompanied by unrecognized hazards that can put their wealth in jeopardy.
In addition, while managing their immediate success, these families must prepare for succession. Eighty-five percent of prosperous families do not retain their fortune past the second generation.
When a family’s wealth grows to substantial size, it’s no longer effective to hire various vendors. Without a Family Office, time constraints lead to the following dangers and eventual loss of assets:
- Lack of diversification in asset allocation
- Lack of alignment among investment classes
- Holdings may not be as safe as they seem
- Vendors may be overcharging
- Lack of confidentiality and protection
It’s best to hire internally. When searching out qualified personnel for your Family Office, Executives Unlimited Inc. will address the issues above, along with the benefits below.
Benefits of a Family Office include:
- Succession training
- Communications Synchronicity between:
– Lifestyle benefits
– Scheduled professional appointments
– Internal sources, external vendors
Rapid developments in technology within financial markets also require greater sophistication and skill in Family Offices financial advisement. Any candidate for Chief of Staff or Chief Financial Officer identified by EUI will utilize this advanced technology.
Beyond providing monetary oversight, a successful Family Office will strategically assess:
- Family relationships,
- Goals in generational succession
- Facilitation of investment strategies
- Management of risks that could otherwise be overlooked
Experts are often privy to personal disclosure. This makes it imperative that Executives Unlimited, Inc. finds talent you can trust. Often this is best accomplished by hiring internal people as fiduciaries, and leveraging outside services such as wealth managers, trustees and accountancy lawyers.
Communication is Key
James “Jay” Hughes, a renowned expert in wealth management, says suboptimal outcomes often result when families “don’t communicate and can’t make decisions.” This – among other failures – has contributed to the increasing need for professional oversight, rendering Family Offices one of the most critical factors in determining family wealth continuity.
Consolidated Investment Strategy and Coordination of Assets:
As the needs of the modern high-net-worth household grows in complexity, and as those households evaluate the lessons of the recent U.S. financial crisis, there is a growing demand for consolidated investment strategy and coordination of assets.
With its capability of centralizing the management of significant family wealth, utilization of the Family Office continues to proliferate, says Bob Moser, president and CEO of Laird Norton Wealth Management.
To justify its expense, a Family Office typically will have assets greater than $500 million under management. However, we have worked with some that were smaller and grew their wealth, and were willing to compensate internal executives accordingly.
Notable Family Offices
Some of history’s most influential family dynasties owe their enduring influence to a Family Office system not dissimilar from contemporary models. As J.P. Morgan’s “House of Morgan” did in 1838 and the Rockefellers did in 1882, todays Family Offices are making a lasting mark in the modern business world – and not just for billionaire tycoons.
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Selecting and appointing a Family Office is instrumental to your family’s success.
- Objective financial advice
- Creative solutions to financial hardship
- Investment planning
- Estate planning
- Negotiated cost savings
- Philanthropic goals
The Family Office can also provide a vehicle for safe conversation to help prevent family disagreements from turning into disputes.