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Future-Proofing Your Family Dynasty: Part 2.

Do You Need a Family Office? Part 1.

Circular image of manor in background with caption Family Office" Introduction

“Do you need a family office?” may be a pertinent question to ask if you don’t already have one but perhaps have heard/read about the possible benefit of a family office for your family, then please read on.

A family office is not for everyone. However, if the level of your family wealth puts you in the category of an HNWI/F* or an UHNWI/F**, then a suitable family office structure becomes a highly desirable vehicle for managing your wealth. In fact, the sustainable development of your Family Dynasty will likely depend on how well you manage your family office.

Back to the key question then – the need for a family office. A family office is a one-stop financial shop for the extremely wealthy. They serve as wealth management and financial advisors for high-net-worth clients typically focused only on the category known as “ultra-high-net-worth.” This is generally defined as anyone with $30 million or more to invest. The costs associated with running a family office are likely to make it not viable for those with a seven-figure net worth.

However, an UHNWI doesn’t just come to their level of wealth through chance (unless they have a huge lottery win, for instance). No – what normally transpires is that they pass through the HNWI phase (say – $1-million-plus investable assets) prior to achieving their UHNWI status.

Therefore, it’s our view that, if you are an individual or family  achieving solid wealth management results whilst in the HNWI “phase”, you may well benefit from having a family office. Initially, instead of having a ‘traditional family office’ from the outset, you may be well-suited to a ‘multi-family’ or ‘outsourced’ family office type.

* high-net-worth-individual/family

** ultra-high-net-worth-individual/family

Future-Proofing Your Family Dynasty: Part 2.

How do you start up and build a family office?

First up – a business plan is a “must do”.

However, before creating a family office business plan, the family must determine their expectations, priorities and scope to decide what services they need. These can include financial planning (investments, philanthropy and life management), strategy (business and financial advice and estate planning), governance (reporting and record-keeping and succession planning) and advisory (tax and legal advice, compliance and risk management).

Diagram depicting Family Office Services

A business plan should include:
  • The vision and mission
  • The relationship to the family business
  • The structure of the office, including legal structure and ownership and intended regulatory and tax impact
  • Jurisdiction
  • Governance
  • Services
  • Staffing
  • Operations, including what key technology is needed
  • Financials including funding and budgeting
  • Work plan – how will the office be implemented?

As well as a business plan, 5 and 10-year strategic plans are key as they bridge the gap between the family governance documents (sometimes up to a 500-year plan) and an annual business plan. The latter is important to ensure that changes can be made in a timely fashion should they be required.

It is more important than ever that families have a long-term outlook. The strategic plans consider “stress testing” assumptions on asset growth and income against the projected number of future family members and their consumption of the wealth accumulated as well as of the services provided by the office.

Families often find it helpful to bring in an independent adviser to lead and facilitate the process, ask inconvenient but essential questions and help to bring new perspectives as well as develop holistic solutions.

Establishing a family office is a major undertaking that may not live up to the family’s expectations. It is important therefore to factor in potential
doubts and shared areas of concern. In particular:


The cost of running a family office and carrying out regulatory and compliance reporting is high. Before a family office can viably offset its fixed costs, a higher level of assets under management will be required.


To set up a family office, a family must have a certain level of trust in working with non-family asset managers and advisers. As trust is typically built through long-standing relationships, the next generation of family members may need time to develop the same level of trust. If new advisers are introduced, trust will need to be established with old and new organisational members as well as non-family employees.


Ultimately, family offices rely on their longevity to ensure wealth preservation. There may be doubt about the family office’s ability to manage wealth “better” than other providers in the wealth and asset management industry.


Family offices tend to function better when they operate in liquid and sophisticated markets within stable legal and tax systems. The absence of such systems in many emerging markets may have undermined the development of family offices and led to the growth of family offices in nearby markets. This could explain why an immense level of wealth in some emerging markets does not always correspond to the number of family offices present in the market.

After weighing the potential benefits and drawbacks of setting up a family office, the family can begin preparing the family office’s strategic plan to avoid operating on a deficit basis in the long term, that is, purely as a cost centre. A strategic plan requires diligence and a vision for implementation that will serve the family office’s objectives well into the future.

In Part 3., we shall be discussing the ‘nitty gritty’ of Family Office setup factors and procedures. In particular, we shall be addressing the topic of The Legal Setup and Structure and Associated Jurisdiction Criteria

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

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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