Family Wealth Management - Who Needs a Family Office?

Family Wealth Management - Who Needs a Family Office? You have a family legacy to protect and want to start your own family office.

What is a Family Office?

Essentially, family office is an asset management company, which manages family's assets. It can manage assets of a single family or multiple families. The service can be provided by the third parties who are regulated professionals or by the head of the family who is an experienced or sophisticated investor.

If you are someone new to wealth, most likely you will need a little guidance how the industry works and help you to identify professionals who you could potentially rely upon.

Who Needs a Family Office?

Family wealth can be managed in many different ways. A single family office may not be a necessity. As you are looking to establish your own family office you need to focus on how to best protect your assets.

You may access wealth management services crucial to your family, but you do not necessarily need to have them exposed in a single structure.

There are many fiduciary structures, solutions and family office services that you can benefit from without having to designate a single family office to manage your family's wealth.

5 Steps to Create a Family Office

1. Determine if you need an Asset Management Company

The first step is to ascertain whether the wealth is large enough to warrant the services of a single family office tailor-made for the family and its wealth requirements.

Family office is sometimes synonymous with an asset management company. An asset management company, even if it manages its own assets, needs to be regulated by the Financial Conduct Authority in the UK. However, the structure of a family's assets is not necessarily the one that warrants an asset management licence.

There are many different asset classes, such as a range of different businesses operating worldwide, sizable real estate portfolios or liquid assets and cash ready to be traded or invested on stock exchange and a variety of portfolio investment products. 

Some families may be asset rich, but cash poor. Sometimes, the healthy required cash balance to meet the lifestyle of the family may be missed due to the heavy emphasis on making investments.

Truth be told, some investments are not necessarily assets and may add substantial financial constraints on a family's cash flow and wealth.

2. Review the physical location of family assets

The second step is to look at the physical location of these assets. Are they inside or outside the UK?

3. Are your family assets structured correctly?

The third and perhaps, the most important step is to ascertain whether the assets and investments are structured properly.

This is especially true if the family has a weave offshore and foreign companies placed across the globe. The compliance requirements in a number of jurisdictions are increasing by day. 

For some structures that may have perceived to have worked well in the past, this is no longer the case.

Family legacy structures by definition are old. Certain structures may have been established 10-20 years ago or longer. However, the pace of incremental change is very quick. 

Previously, it was ok to have reviewed the family’s fiduciary structures every 5 years or so. Unfortunately, this is no longer the case and a more frequent review is required, which may be dictated by the specific asset classes held in the structures.

4. Are the family wealth structures tax efficient for the new family members?

Not only that the jurisdictions went over many many changes, so did the tax systems of the countries where the new beneficiaries maybe resident.

Therefore, it is imperative to receive good and relevant specialist advice from a qualified specialist experienced in these matters.

There are many questions that need to be asked beforehand in order to determine whether a family office in the shape of the asset management company is the step in the right direction.

5. Contact a family office specialist to discuss your needs

As somebody who specializes in tax, wealth management of ultra high net worth individuals’ assets and legal requirements for high net worth families, my sole purpose is to help you protect your family’s legacy.

Consult the Expert - Who Needs a Family Office

You need to decide whether you need a bespoke single family office or run a multi family office as a business.

Perhaps, you need to distinguish between the individual family office services you may need instead of creating a family office.

Book a call with me to discuss your bespoke requirements and necessary onshore and offshore legal arrangements to protect your global wealth.

You may submit your enquiry here.

Saule Voluckyte, M.A.E.S, LL.B, FAIA

I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.

Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.

Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.