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Why Choose Family Office Services?

A family office can be the name given to a private company whose job it is to help manage the affairs and investments of a wealthy family. The many different family office services can include providing a family with personal services, such as travel arrangements, as well as handling daily accounting and legal affairs. The modern family office is typically categorized by how and who does the management.

Class A is one category, and these family offices are typically run by a private company that is dependent upon direct supervision from a family trustee or family administrator. The Class A family office services usually include complete oversight of liquid financial assets and offer daily management of illiquid assets. Another family office service provided is the administration and supervising of the estate. For providing these family office services, the companies typically charge a flat monthly fee and can also provide management reports as necessary. Another category of family offices is the Class B family offices, which are usually run by an accountant, bank, or legal firm. Class B family office services typically fulfill the investment needs of the family by providing investment advice and wealth management services. Class C family offices are those directly run by the family with a support staff and usually handle simple administrative affairs.

There are many reasons why families may find it beneficial to outsource family office services. The more complex the needs of a wealthy family and its members, the harder it is to keep management within the family. Family members or in-house administrators may not have the necessary skills needed to handle specific legal or financial matters, making it advantageous to outsource these needs to professionals specializing in these fields. Family office services can include tax planning, investment advice, expense management, risk management, and a whole range of other personal services that might be too much for a single family office to handle or at least very costly and time-consuming.

Registered investment advisory family offices are regulated by the Securities and Exchange Commission (SEC). Family offices organized as private trust companies are regulated by a banking commission. In either case, family offices and family office services are subject to state and federal regulations. Improper management could result in possible legal action. Professional outsourcing removes the burden of providing family office services from families and can help to avoid family conflict. Outsourced family office companies possess the complex technology and research required to produce advanced reports to help carry out and meet objectives. Outsourcing to a corporate family office that serves similar families increases the likelihood of drawing on a range of experts for any given issue experienced. Outsourced family office services are likely to undergo a careful review processes to assure clients of a high level of service.

Providers of family office services can be found online and through networking. Reputable family office companies may even refuse referral fees or commissions to avoid conflicts of interest or will credit commissions to their clients’ account. A respected company will provide a detailed written service agreement and incorporate a cancellation clause in the event that a client is dissatisfied with the level of family office services provided. Families have different needs, requirements, and interests when it comes to family office services, so clients should make sure the family office understands their unique circumstances. Prospective clients of outsourced family office services should conduct their own due diligence when selecting a company. One important factor in choosing a family office company is finding one with a track record of positively impacting their clients’ wealth.

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