Here’s the deal…you’ve achieved financial success, but now what? What do you do with excess wealth, and what will happen to your wealth management when the next generation takes the reins?
Wealthy families are bombarded with offers of advice and services. Private bankers, lawyers, trustees, investment managers, accountants, insurers—the list goes on. It’s a jungle out there, and even the most financially savvy can feel overwhelmed.
A family office offers a dedicated team focused solely on your family’s financial well-being.
What Is A Family Office Exactly?
The concept of a family office isn’t new. In fact, one of the earliest examples dates back to the 19th century, when the Rockefeller family established their own office to manage their vast fortune. Since then, family offices have evolved and adapted to meet the changing needs of wealthy families.
Forget the image of a stuffy Wall Street office filled with pinstripe suits and complicated jargon. A family office is more like a close-knit team of trusted advisors, dedicated to preserving and growing your family’s wealth across generations.
This isn’t just about picking the right stocks or finding the next hot investment; it’s focused on building a solid foundation for your family’s financial future, including legal and tax planning.
Think of it this way: A family office is like a personal CFO for your entire family. They’ll handle everything from investment strategies and succession planning to the nitty-gritty of banking and cash management.
Need help managing your extensive property portfolio? Your team handles other day-to-day financial chores, too.
But What Kind of Family Office Do You Need?
“If you’ve seen one family office, you’ve seen one family office.”
No two are the same, and their goals can be quite different.
- Do you need a team dedicated solely to your family, like the Waltons, who manage their Walmart fortune through a single-family office?
- Or would a multi-family office that leverages economies of scale be more efficient, like the one used by the Pritzkers of Hyatt Hotels fame?
- Perhaps a virtual family office, with its flexibility and remote accessibility, is the perfect fit for your globally dispersed family.
Ultimately, whether your aim is to protect and grow wealth, manage the proceeds from a recent business sale or build a lasting financial dynasty, a family office is built around your goals.
A family office will play a key role in determining the ‘family approach’ to a wide range of affairs. Let’s take a look at what that might mean for you.
What if Your Investment Portfolio Takes a Hit?
Markets are volatile. A sudden downturn could significantly impact your family’s financial security. Financial planners might boast about outperforming the market, but that can still mean losing money – just not as much as others.
Your family office acts as a buffer, creating a diversified portfolio of investment strategies designed to weather the storm and protect your capital. This might involve a mix of stocks, bonds, real estate and alternative investments, spreading the risk and ensuring long-term stability. Plus, you’ll get aggregated reporting so you can easily track your financial performance.
Who Will Inherit Your Estate?
Passing the baton to the next generation is a delicate process; succession planning is often fraught with emotional and logistical challenges. Do you have a clear plan for distributing your assets? Are your heirs prepared to manage their inheritance responsibly?
Your family office guides you through the intricacies of estate planning, wealth transfer and preparing your heirs to be responsible stewards of your family’s fortune.
Your team of advisors can help you establish trusts, minimise tax implications and educate your progenitors about financial responsibility.
What if Family Conflicts Arise Over Money?
One issue with wealthy families is that they often excel at running the businesses that generated their wealth, but they may struggle with managing the excess capital, especially after selling the business. This can lead to disagreements over investment strategies, philanthropic endeavours or even day-to-day spending habits.
A family office helps establish clear communication channels and decision-making processes, fostering unity and minimising conflict. Your team can facilitate family meetings, mediate disputes and ensure everyone is on the same page regarding financial matters.
Who’s Handling the Excess Wealth?
“You can’t buy lunch with relative dollars.”
Capital preservation is key, and managing significant wealth involves many tasks—from paying bills and managing properties to handling complex tax regulations. These responsibilities can be time-consuming and overwhelming, taking your focus away from enjoying your wealth and pursuing your passions.
A family office can also help you align your philanthropic goals with your investment strategy. This might involve impact investing, where you invest in companies or projects that generate both financial returns and positive social or environmental impact.
Is managing your family’s wealth starting to feel like a full-time job? If you’re juggling multiple properties, investments and philanthropic endeavours—or if your net worth is approaching the $200 million mark—GTB services offer the support you need to simplify your financial life, manage your family office in one place and build a lasting legacy.
Get in touch for a free, confidential consultation.
