Should you build your own family office?

Part of the challenge of building and running a family office comes from strategy…or sometimes the lack thereof…when putting the pieces into place and then dealing with the day-to-day operations. The reality is that family offices often come together through an evolutionary process that on close inspection looks more like the assembly of Frankenstein’s monster than a highly technical manufacturing process.

However this is understandable. Family offices are entities that are created or leveraged by families to address their specific needs and achieve their specified goals. In many ways, they are a reflection of the principals. The notion of an “ideal” family office is just that—something that exists in theory, but is subject to the particular (and sometimes oscillating) needs and motivations of its principals. Expecting perfection of design and operation is a recipe for frustration for both family members and family office advisors alike.

Understanding what archetype or model of family office is the “best” fit for a family is also complicated by the passage of time. Families are not set in stone. They evolve and adapt to new circumstances and changes in requirements and motivations. Predicting exactly what services a family office will need to provide five, twenty or a hundred years from now is therefore virtually impossible.

All family offices have two key purposes: 1) reducing complexity and risk and 2) improving the quality of life of the families they serve. While these key objectives are simple to express, putting them into practice leaves many families frustrated.

However, noise in the process of building or operating a family office does not mean that all is lost. The good news is that there are copious lessons to be learned from history, from advisors who specialize in working with family offices, and directly from other family offices.

When families consider building a family office, our team supports that journey by leveraging an interdisciplinary approach of historical context, original research, practical experience, and a global community of family offices.

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Here is a link to a white paper we published to help you and your team explore family office formation and operational excellence areas: https://lnkd.in/eAvHcGGN

The whitepaper provides key insights into decision-making for family office structuring and a database of pivotal questions that family offices can use to engage with their legal team. 

Knowing which questions to ask and when to ask them is critical for success, especially when there are often no easy or singular answers in the family office realm.