Role of a family office beyond investments

Family offices go above and beyond just managing a UHNI individual or family’s investment portfolio; their approach to wealth management has a much more personal and customized touch

Rajmohan Krishnan
Updated: Oct 19, 2020 06:47:35 PM UTC
Image: Shutterstock

Imagine walking into a luxury car showroom and being able to build your own custom-made car from scratch; the choice to literally oversee the design, engineering and modeling of your own luxury vehicle suited to your life, all under one roof. While such a scenario may be nearly impossible in the auto world, in the world of wealth management and finance, it isn’t a mirage. Tailor-made solutions to managing your wealth, property, investments, and much more can be made possible with the backing of a Family Office.

The genesis of family offices can be traced back to 19th century America, where wealthy individuals like John D. Rockefeller had dedicated teams of people looking after his fortunes. Family offices have come a long way since then, and modern-day family offices are dynamic entities that serve ultra-high net worth individuals and families in a multitude of ways. Worldwide, it is estimated that there are over 6,000 family offices holding and managing assets worth $4 trillion.

Family offices are also often thought of as an extension to wealth management, which is not true. Wealth management is just a subset of the family office model of financial management. One of the main areas of service is multi-generational financial planning via several ways such as helping mentor the next generation, creating trusts and wills, succession planning, etc.

An increasing number of UHNIs is becoming aware that philanthropy is an important arm of succession planning and leaving behind a legacy, and often enlist family offices to shape philanthropic ventures that will eventually contribute to building a long-lasting legacy of social capital and monetary wealth.

One rule that sets family offices apart is that they have a no-commission policy. Family offices do not gain any sort of revenue from selling financial products such as a particular company’s mutual funds to their clients; they are paid by their UHNI clients only.

Our world today is more volatile and more complex than ever before, and in such a precarious scenario, family offices are in a unique position to help UHNI families and individuals solidify their wealth and legacies.

The author of this article is the Principal Founder and MD of Entrust Family Office

The thoughts and opinions shared here are of the author.

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