Whether you're a successful business owner, high-performing executive, a professional athlete, trustee, beneficiary, or are already managing a single-family office, navigating the complexities of wealth, career and family needs is a constant juggling act. Just recently, a friend who inherited an established family enterprise told me in a virtual coffee chat that the juggling act seems risky at times. He likened it to the old engineering adage: "the more moving parts you have, the more chance there is for something to break down."
That may be true, I said. But as someone with a 30-year career in the wealth industry, I believe the opposite is also true: the more moving parts you have, the more opportunities open up. Like anything in life, the real challenge comes when you have to juggle all those moving parts yourself.
For successful individuals and their families, this is a genuine concern. Whether they're experiencing a life change, reaching a milestone or facing a transition, many people will find that managing the complexities of their wealth is truly a business unto itself.
As an example, the founder of a family business may decide to sell the company. They may have been very successful at managing a multi-million-dollar business, but find it challenging to oversee their investments, not to mention planning for future life events or philanthropic efforts. In other cases, a successful business owner or other professional might be reaching a new life stage—be it their children's post-secondary education, marriage, divorce or retirement—and thinking about how to ensure their family's continued success.
This is where a family office comes in. A family office is the 'ecosystem' that people build around themselves to manage their wealth, including business, financial, and personal matters. The concept of a family office isn't new: it traces back to Europe in the late 1800s and was popularized in 19th century America, when John D. Rockefeller had advisors looking after his vast wealth and philanthropic efforts. Over the years, a small number of family offices served the needs of wealthy families in the US and some global markets.
In recent years, we've witnessed a surge in the number of family offices that have been established around the world. While this growth does coincide with the general rise in worldwide wealth, there are other reasons family offices have become increasingly sought after. To name a few, the market has: more diverse needs of multi-generational and geographically dispersed families; new generations of entrepreneurs and executives; increased complexity stemming from regulations and globalization; and growing interest in philanthropy and legacy planning.
Family offices come in different shapes and sizes depending on the individual's or family's unique needs and the complexity of their affairs. There are two main types of family offices in Canada: single-family offices (SFOs) serve one individual and their family, while multi-family offices (MFOs) serve a few families benefiting from economies of scale.
At KPMG Family Office, our ecosystem covers eight key areas encompassing all aspects of wealth: tax strategy; legal, estate, trusts and wills; dynamics and governance; wealth and investment strategy; deal advisory; philanthropy and impact; risk management; and accounting, reporting and administration.
We work collaboratively with our clients to help define and achieve their evolving objectives, and our solutions are tailored to each family's needs. We recognize that every family is unique, so each family office we build is as unique as the individual and family it serves.
Keep an eye on our Family business and private wealth blog page over the coming weeks and months as some of my colleagues and I explore a range of issues unique to successful individuals and families and the role of family offices that are increasingly employed to guide them on their journeys to continued success.