How to Know It’s Time to Transition to a Family Office

A family office describes an advisory firm that delivers private wealth management services to ultra-high-net-worth individuals. Typically, they cater to people with more than $30 million in investable funds.

Unlike traditional wealth management service providers, family offices offer a comprehensive range of services, including investment planning, budgeting, insurance, wealth transfer planning, and tax services. 

If your family is currently with a standard wealth management company, there may come a time when you realize you’ve outgrown their capabilities. Typically, that’s when you can relate to these signs:

The wealthier you become, the more complex your financial needs can be. At that point, a family office can be more competent to help you manage your finances than a traditional wealth management firm. If your financial life has moved beyond stocks and bonds into a wide range of assets and investments, a family office can be of value. They can help with diverse asset classes, active business holdings, and international assets.

As soon as you encounter a situation that your existing wealth management service provider can’t manage, you hire another expert to help. Before long, that can mean you’re coordinating between multiple wealth managers, advisors, and lawyers, who don’t necessarily communicate with each other. That’s how costly mistakes can be made.

At that point, streamlining your professional services to be under one roof or within one business makes sense. Most family offices consist of investment and financial specialists, legal and governance experts, and administrative and lifestyle service professionals.

A major change in wealth can be overwhelming. Before you go out and buy a new yacht, it’s generally a good idea to work with your family office to discuss your options. This is typically advisable if you’re selling a business, including an IPO or merger, you’ve received a substantial inheritance, or you’ve had a large payout from a company.

It’s often the case that the more money you earn, the less time you spend living. You can find yourself spending countless hours paying bills, reviewing bank statements, managing your taxes, and taking care of payroll. These tasks, and others relating to your finances, can considerably cut into your leisure time. You can spend more time vacationing and less time managing your money by outsourcing these tasks to your trusted family office.

If you have children and grandchildren, you may be ready to look beyond your immediate returns and begin planning for their future wealth. Most family offices can assist with multi-generational planning through succession planning, next-generation education, and family governance.

If you have no clear plan for how you’ll pass down wealth, businesses, and assets, or you need help to train your successors on their financial responsibilities, working with a family office makes sense.

While a traditional wealth management service is more than adequate for most people, there may come a time when you outgrow it. If you wish to plan for the future, your wealth has increased or become more complex, or it’s taking up all your free time, now’s the time to explore your family office options.