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Future-Proofing Your Family Dynasty: Part 1.

Your Family Dynasty: Will It Survive?

Introduction

Why we ask – Your Family Dynasty: Will It Survive? is because it’s a question that, in essence, every dynasty must ask of itself on a regular basis. In today’s rapidly-changing world, socially, economically and geo-politically, it is vital to ensure that all possible appropriate measures are in place to protect the family dynasty.

This is the first of a series of articles on the topic of Family Dynasties and Family Offices. In them, we shall be exploring their history, their successes and strategies and the “do’s” and “don’ts) for growing and preserving them. The success ‘rules’ apply to family dynasties and family offices of all sizes – from the multi-millionaires to the multi-billionaires. In the former category there are those who are high-net-worth-individuals (HNWI) with investable assets in excess of $1 million.

The latter category includes those commonly referred to as Ultra-high-net-worth-individuals (UHNWI) who have investable assets of at least $30 million.

What is a dynasty?

Whilst dynasties may refer to a line of hereditary rulers of a country, e.g., the Tang Dynasty or Ming Dynasty, within the context of this discussion we shall be dealing with the concept of a Family Dynasty.

A dynasty may also be referred to as a “house”, “family” or “clan”. Generally, the word “dynasty” is often used informally for people who are members of a family with influence and power in other areas, such as a series of successive owners of a major company.

Another version of a dynasty is that of a succession of people from the same family who play a prominent role in business, politics, or another field.

Notably, training for beneficiaries may need to be put in place as well to prepare them for inheriting the business and investments.

But first things first – the Family Office. What is a family office and what is its purpose? What are the different family office types? How do you start up and build one? 

 
The House of Your Family Dynasty

Family Offices

What is a Family Office and what is its purpose?

A family office is a private wealth management firm established by a high-net-worth family or an ultra-high-net-worth family. In brief, it provides that family with a selection of personalised services that include investment management, financial planning, estate and tax planning, business succession planning, philanthropic investing and more.

It might handle lifestyle concerns such as careers, school, travel plans or art acquisition. In many ways, it is a full-service concierge.

The purpose of a Family Office 

The family office is a dedicated solution for the complex management of the family wealth. As such, it’s a vehicle that supports the family in the day-to-day administration and management of the family’s affairs and long-term strategy.

In many ways, estate management is the core function of a family office. Hence, the responsibility of this office is to make sure that the fortune survives for generations to come.

What are the different Family Office Types?
Traditional Family Office

A traditional family office is an entity established by a wealthy individual to manage the family’s wealth. A single-family office conducts the full-time job of managing dynastic wealth. The overarching objective is to serve the family’s  financial interests. It usually has a staff of experts who protect and grow the wealth. The staff might include a financial adviser, tax specialist, estate planner, accountant, and more. As all are employed by the family, there aren’t the conflicts of interest with products and services that might be found if they worked for other financial institutions. 

Multi-Family Office

A multi-family office is a firm that manages the wealth of more than one family. As such, it offers the same types of services that a traditional family office offers. Hence, in the same manner as the traditional family office, its experts tailor wealth-related solutions for each family’s financial and household needs.

Beyond investment management, these might involve bill-paying, transfer of wealth plans, philanthropic advice, wealth education, and more. Multi-family offices usually charge a percentage of investment portfolio assets under management for their services.

Because they work for more than one family, they can be less expensive than traditional family offices. However, a family has less control over these providers, as a result.

Outsourced Family Office

An outsourced family office is a network of appropriate service providers—financial adviser, lawyer, accountant, et al — who collaborate on behalf of a client. Typically, one of the professionals is appointed to coordinate all communication and efforts.

The fact that they’re authorised to consult with each other about one family’s financial business is what separates them from other professionals who provide the same services.

An outsourced family office can handle many of the same matters that traditional and multi-family offices handle. These might include business succession planning, philanthropic planning and family wealth education. This type of family office is usually less expensive than a traditional family office. However, the family also has far less control over the professionals.

Whichever form of Family Office is put in place, perhaps the most important consideration is the family’s choice of advisers. Naturally, relevant due diligence should be carried out in each instance prior to any appointment of a staff member / service provider.

In our next article, we shall be discussing:

  • Do you need a family office?
  • How do you start up and build a family office?
  • Is your present family office structure the best way forward for 2023 and beyond?

How A Wealth IQ Adviser Can Help You With Your Family Office

Whilst Wealth IQ advisers are highly qualified professionals who specialise in:

Tony Skinner - Founder and Senior AdviserThe Wealth-IQ Group, led by Tony Skinner, is a professional, holistic financial services company, based in Adelaide, South Australia, with well over 35 years of experience. Therefore, we understand that our relationship with each client will be built on trust, integrity and professionalism.

To learn more about the services we offer, please take a look at our website.

The Wealth-IQ Group is committed to providing you with the best possible service, and we are proud of our reputation for excellence. We shall always act in your best interests as well as endeavouring to exceed your expectations. Our team of dedicated professionals has extensive experience in financial planning and wealth management.

Moreover, we are committed to providing a high level of personal service and expertise, while remaining client focused. Our team of advisers provides a range of financial advice and solutions to help you achieve your financial goals.

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