We have seen it time and time again – a flustered and over worked Family Office manager instructs us to assist with what seemingly appears to be one portfolio of work within the larger scale of the operations. When we start to pick at the seams to provide the services requested, we unravel a series of issues that are creating unnecessary stress, increased expenditure and inefficiencies within the whole structure.
Having worked with many Family Offices over the years, we’ve narrowed down the 4 key struggles that most Family Offices are facing and the one simple change that deals with them all:
1 The office is lost in a sea of external advisors, services providers, contractors and licensees.
Often the in-house team of a Family Office may consist of up to 3 people. One manager, one accountant and an administrator. But when the office is managing a diversified investment portfolio, real estate in 5 different countries, private aircraft and yachts (often chartered when not in use) and may even be tasked with providing ad hoc advisory work to certain departments in the income producing businesses, 3 people alone cannot create, negotiate and keep on top of all the work involved. The need to constantly outsource even the simplest of tasks due to lack of time and resources results in additional work trying to keep track of it all not to mention the costs.
2 The family does not have the time or focus to invest in proper succession planning.
When you are running a business and the side business of a diversified Family Office, you have little time for anything else. Planning for the future, for who will take over and how your assets will be distributed to your beneficiaries is crucial. Yet we often note that this important issue is pushed to the side in the need to handle the pressing day to day work. Even worse, haphazard planning has resulted in structures that are too complicated, no longer work or are the wrong fit for the family. Even the simplest thing such as making sure the family’s Wills are up to date is commonly forgotten.
3 The family is worried about their image, negative publicity and personal safety.
When the media misquotes you or is less than accurate in its description of your operations, it can have a detrimental effect on many areas of your business whilst public perception of the family may suffer. This is something that is unfortunately commonplace and is always of great concern for every Family Office. Furthermore, having your children’s schools or flight schedules made public is something that all our clients have voiced their concerns over. Many Family Offices become the target of threats whether empty or not, and safety is of paramount importance.
4 The family wants to incorporate more philanthropic planning and products into their operations.
More and more Family Offices are tasked with finding ways to enable the family members to re-connect not only with their employees and associates, but with the community at large. The family has the power and resources to assist and wants to give back and help in a productive way. Donations to charity organisations en masse no longer satisfy this need. Implementing a solid corporate social responsibility policy and investing in targeted ways is key for the family to be involved and ensure that they are in fact driving the change they want to be a part of.
The Simple Change
These 4 key struggles can be easily dealt with by appointing one ‘Go-To’ consultant. Someone who has the business know-how, industry exposure, experience and contacts needed to solve these issues and become the family’s trusted advisor and guide.
Whenever we have been appointed to act as a Family Office’s port of call, we have managed to decrease costs and expenditure to external providers, improve the value outlay and streamline the operations of the team whilst putting a plan in place to deal with these key struggles once and for all.
How We Do It
Once appointed, we integrate ourselves into the Family Office’s culture, processes and operations. We assess what can be changed internally, what work still needs to be done and how, and which external services can be managed by one provider or handled differently to reduce the overall costs. Once the plan is prepared we implement it, working closely with the family to inform, support and provide solutions whilst the day to day operational work is not disrupted. We become their trusted contact, coordinating all external parties together with the in-house team ensuring the smooth integration and implementation of all processes. We offer guidance, solutions and take the struggle out of the daily work so that the family has more time to spend on their own projects and the in-house team can productively manage the workload.