The role of a family office in managing wealth
December 5, 2023
Ed Maycock

Effectively managing significant family wealth requires a multifaceted strategy, one important facet of this can be the family office.

In today’s world it is not uncommon to see family members - and family assets - spread across the globe. These assets are commonly held within a variety of ownership structures, from trusts to companies, with some significant assets even being held personally. Having effective oversight of family assets is key to ensure that the family wealth is managed responsibly and sustainably for generations to come.

What is a family office?

It is essentially a structure, often a company, set up to facilitate the day-to-day administration, as well as the long term management of a family's wealth and interests.

Are family offices all set up in the same way?

No, and they shouldn't be.

In our view, it is as simple as this: If you have seen one family office, you have seen one family office.

The idea behind a family office structure is that it is very far from a one-size-fits-all solution. An effective family office should be tailored to meet the specific needs and intentions of the family for whom it has been created, taking into consideration a range of factors including wealth levels, tax implications, family dynamics, reputational concerns, location of family members and assets, ownership structure of assets (whether personally or via a family trust) and the long-term objectives of various family members.

How does a family office support those with family wealth? 

A family office helps in striking a balance between wealth creation and succession planning for family members spanning different generations. Through this, families are empowered to define a clear purpose and create a lasting legacy. 

A family office structure importantly promotes professionalism in wealth management, which is of utmost importance for families engaged in international affairs. 

What does a family office do?

Broadly speaking, a family office may advise on and take responsibility for areas such as: 

Many family offices also work with professional advisors to ensure that tax and legal obligations are adhered to, and that any filing obligations are met in a timely and efficient manner.

Thinking about you and your family - frequently asked questions

Is setting up a family office right for you? 

There are lots of elements to consider. Whilst many private client firms may look only at a person’s level of wealth to make this decision, at Sanctoras we find it most effective to look at your life as a whole and the benefits to you in terms of your vision for the future. 

We take into account a spectrum of elements such as: the current complexity of your investments, assets and business interests, the values which guide you, the vision you have for your wealth and the vision you have for future generations, your philanthropic aims, family dynamics, your mindset.

Aren’t family offices only for those families with over £50,000,000?

No. At Sanctoras we think it’s less about seeing the family in terms of their net worth, and more about looking at their life, and their objectives for a structure, as a whole.

A family office structure may not be appropriate for many, but for those where there is a requirement, we don’t consider that a particular level of wealth should be a decisive factor in establishing a family office.

Is there a set structure for a family office?

No. As we have said above “if you have seen one family office, you have seen one family office”.

Your family office can be structured to suit your family, your wealth levels, your intentions for the future and taking into account the complexity of your assets.

Family offices can range from a single-person operation, often employed within a family business, to a multi-site, multi-national, multi-staff set 

Don’t family offices cost tens of thousands to set up and run?

They don’t have to. 

For those families with very complex needs (such as requiring day-to-day, hands-on support, tailored investment advice and detailed tax advice), it is likely that more staff, with specialised skills may be required to support the family. As such fees may be higher.

For families with more simple requirements (e.g., the family only has cash to manage and/or invest), the services offered by a family office are likely to be more straightforward and, as a result costs are likely to be lower.

Does having a family office involve a loss of control over business interests and personal matters? 

If there are any assets you don’t want to lose control of, there is no requirement to pass ownership or control over to a family office structure. 

The structure of your family office (whether through a single family office or multi-family office), and the assets it controls should be structured how you want it, and how best suits you.

Should I go for a single family office or multi-family office structure?

The benefit of a single family office is that it would be established and its structure would be set up exactly for your family’s needs and values. It’s investment philosophy would be tailored to your family only. It would also serve your family as its only client, meaning that your point of contact would not have other clients to service. As a result, a single family office operation would generally be more expensive to set up and operate.

A multi-family office would have, most likely, expanded from what was originally a single family office which has opened its client base to non-family clients. As a result, the business would be more established, and may be more appropriate for families with less complex requirements. As a result, the cost of using the services of a multi-family office may be lower. However, the services you would receive (such as investment philosophy), may not be tailored to your families exact requirements.

The role of a family office in managing wealth