A simple manual lends great help in many complex endeavors. Now wealth managers will find out if it can help with starting a single-family office.
The Family Office Exchange (FOX) has published the Guide to the Professional Family Office, a 56-page roadmap for wealthy families that are considering creating an office to manage their wealth jointly or want to evaluate their existing office.
The guide examines the challenges involved in establishing a family office and offers an inside look at how those offices are managed, according to FOX, a Chicago-based global membership organization of single-family offices and their advisors, It uses proprietary benchmarking data gathered from the group’s members to show how family offices deal with issues such as technology, investment processes, governance and compensation and benefits.
Topics covered include the role and responsibilities of the family office, operating costs and risks, the advantages and disadvantages of various legal structures, the types of services typically provided, and best practices. The guide also offers information to help family office executives better explain their work and the value of their offices.
For family office clients, the guide attempts to demystify the inner workings of the office. It looks at the due diligence required to select the right team of advisors and explains what is involved in a range of tasks, from filing tax returns to preparing the next generation of family members for financial leadership.
The Guide was designed to assist both wealthy families who may want to establish a family office and executives at existing offices, according to FOX Senior Consultant Jane Flanagan,
“Managing family wealth for generations is incredibly complex. The family office must balance the challenges within the family as well as all of the financial aspects of the process,” said Flanagan, who oversees FOX’s benchmarking studies and served as project manager in producing the guide. “The reason we call it a guide is it gives the office executive or family member a practical tool that they can use in their work. We rely heavily on research such as benchmarking, case studies of other families who have been there and done that, as well as tried and true resources. It’s hard to find objective peer data, because family offices are so private, so I think this is a unique resource.”
It is also a useful resource for board members, “who are typically charged with assessing the performance and value of the family office every year. This guide offers a means to help them understand the key areas they should be paying attention to and provides industry benchmarking data they can use to compare their current operations to their peers,” she said.
