Why Do Investors Want A Family Office? - PODCAST - Family Offices & Family Office Club

TL;DR

Family offices provide customized wealth management solutions for ultra high net worth individuals, with options ranging from virtual to single or multi-family offices.

Transcript

So why does a family office, uh, exist? Why do people want a family office? They really are looking for not only more control, but they're looking to design something that serves them specifically based on the amount of wealth they have. If you walk into a bank of America down the street, And you're worth $200 million. They'll be happy to manage th... Read More

Key Insights

• 🧑‍💼 Family offices offer customized solutions and more control over wealth management.
• 🧑‍💼 Single family offices allow individuals to design their own game plan, while multi-family offices provide access to a range of experts.
• 👣 Starting a family office can provide benefits such as reducing fees, aligning your team, attracting capital partners, and tracking performance through a dashboard.
• 👪 Multi-family offices may start as single family offices and expand to serve multiple families.

Questions & Answers

Q: What are the different types of family offices?

There are three types of family offices: virtual family offices, single family offices, and multi-family offices. Virtual family offices are lean and outsource most functions. Single family offices are customized to an individual's specific needs and can be built according to their preferences. Multi-family offices are wealth management firms focused on serving multiple ultra wealthy families.

Q: Can multi-family offices start as single family offices?

While not common, around 15-20% of multi-family offices start as single family offices. As more people express interest in having their money managed by them, single family offices may expand to serve multiple families and benefit from shared expenses.

Q: What are the benefits of starting a family office?

Some benefits of starting a family office include access to peer family offices, superior deal flow, reducing fees and taxes, aligning your team with your goals, attracting capital partners, and creating a family office dashboard to track performance.

Q: What are the overhead costs for a single-family office?

The overhead costs for a single family office can vary depending on the assets under management (AUM). As a general range, hiring one full-time professional for every 30 to 50 million AUM is common. The overall cost is typically around 1% of AUM, not including investment costs.

Summary & Key Takeaways

• Family offices exist to provide individuals with more control over their wealth and tailored services based on their specific needs and wealth level.

• There are three types of family offices: virtual family offices, single family offices, and multi-family offices.

• Single family offices allow individuals to design their own game plan, while multi-family offices offer a wide range of experts and services for ultra wealthy individuals.