This article was initially published in Spear’s supplement “The future for family offices”.
Since the financial crisis, many commentators have reported that family offices of both the single and multiple
The companies making up the FTSE 250 employ tens of thousands and have sophisticated in-house teams managing their finances. Many families, despite the relative size of their wealth, do not. It is not uncommon to come across a family where the Financial Director of the family business has become a quasi-investment adviser for the family’s personal investments and the CEO’s PA is an expert on completing personal tax returns.
While some of the personal wealth of those occupying the top spots on the Rich List derives from shareholdings in listed companies, there is still a huge amount of wealth sitting outside of this. The question is, why isn’t this structured inside a family office? What exactly are they afraid of?
In many cases the answer
There are also the operational risks to bear in mind. When you take on everything in-house, the buck stops with you. How do you ensure that the family office is properly run and appropriate governance put in place? How do you measure its performance? What about employment and regulatory responsibilities? It is perhaps no wonder that cyber-security often gets put on the too-difficult list.
The penalties for breaking the rules can be very severe. There are certain exemptions but if a family office has any doubts it should