A family office is a private company that handles investments and other financial tasks for high-net-worth families. Family offices have been operating for hundreds of years and are a well-established method for managing and nurturing generational wealth.

The primary duties of a family office are dependent on the needs of the families themselves and typically cater to the family’s specific financial situation. These offices are built to serve the best interests of their clients while skillfully navigating the hurdles and unique challenges of wealth creation and maintenance.

In the past, a family needed at least $100 million or more in investable assets to work with a family office. However, family offices have recently started to cater to multiple families in an organizational structure that distributes the substantial cost of using a family office across several portfolios.

This approach is beneficial in cases when a single family lacks the assets necessary to establish a family office but still wants access to the powerful financial tools such an office could provide. With family offices becoming more attainable and not just for the mega-wealthy, there are many ways that a family office can significantly benefit the long-term health of your family’s financial wealth.

Personalized and Comprehensive Wealth Management Strategies

One of the key benefits of working with a family office is that you have a single team that is dedicated to monitoring and analyzing your investments. Wealthy investors can employ firms and others to handle their portfolios, but eventually they can get to a point where it makes more sense for them to have their own personal CFO, or investment team, who can handle the complex nature of their finances.

This committed team will examine your private equity, startups, real estate investments, and other assets to create an action plan that provides the clearest path toward reaching your financial goals. Having a team that can comprehend the specific needs, risk tolerances, and other investment criteria of your family is one of the biggest benefits to using a family office. Family offices also frequently assist in maintaining a high level of confidentiality and privacy with regard to the family’s assets and investments.

While every family office is unique to what they manage, the majority of family office services combine at least a few of the following services:

  • Treasury Management
  • Investment selection
  • Portfolio management
  • Legal Advisory
  • Accounting Services
  • Real Estate Programs
  • Captive Insurance
  • Philanthropic Giving
  • Retirement Planning
  • Estate Planning
  • Risk Management
  • Multigenerational Legacy

Partnering with a family office has several benefits, including access to a customized plan that meets your needs and values. A family office serves as a testament to the founder of the family’s fortune and aids in upholding the ideals and values that the family holds dear.

Minimize the Risk of Error

Family offices minimize the risk of financial errors because everything passes through a single, organized channel. This means that you will have a better chance of catching errors and correcting your portfolio’s course when you work with a family office versus spreading each financial responsibility across a variety of different offices.

Individual specialists frequently lack a big picture perspective because they just have one view of your financial situation. Family offices employ individuals with diverse skillsets and leverage the advice given by each to better manage the various facets of your financial life. Since everything travels through one team, a family office consolidates both operational risk and operational management. Owners can then make more sensible decisions to better target and achieve the family’s generational wealth goals.

Access to Cost-Effective Strategies

By establishing a relationship with a family office, you are allowing a team of professionals to build your investments and handle your financial goals. The team of professionals can be advisors, CPAs, and tax strategists. This means that the family office can pool resources as a team and save you money by no longer having to outsource each service individually.

Family offices, as opposed to institutional investors, typically use an opportunistic approach and source opportunities through close networks of experienced professionals. As a result, investors can diversify their portfolios across a wider array of asset classes, providing additional flexibility when compared to their institutionalized competitors.

Family offices are also more appealing in comparison to their institutional counterparts because those institutions are frequently slowed down by specific mandates and laborious processes. A family office has more room to be flexible and customizable within its process.

Bottom line: Having a dedicated team of highly experienced financial professionals overseeing your family’s wealth can have many advantages. If you are ready to get a family office behind your finances, contact us today at TSP Family Office. We’d love to discuss your unique situation and share more about our family office services.