Family Office Selection

Author:Mr Jan van Bueren and Thomas Ming
Profession:FOSS Family Office Services Switzerland

Family offices are 'in fashion'. A growing number of wealthy families are considering the use of a multi-family office and an ever-increasing number of companies are starting to offer multi-family office services.

A family office is a company that supports wealthy families with the management, organisation and maintenance of their wealth. Although there is no set minimum, the use of a multi-family office (MFO) is mostly considered by families with wealth above twenty five million US dollars.

In the context of increasing wealth worldwide, the rise of the family office model is a natural development: beyond a certain level of wealth, (financial) needs grow beyond pure private banking services and completing typical banking services with those offered by multi-family offices makes sense.

Where most (private) banks advertise, are well-recognised and their offices can be found in the main streets of cities such as Zurich, London, New York and Singapore, most MFOs are defined by their discretion. Also, as only a relative small group of people use family offices, it is not an easy task for a family to find and select the proper provider. That said, as a family's wealth and future well-being strongly depend on the selection of the right provider, the selection process should be taken very seriously.

No multi-family office is the same

Within the MFO universe there is no 'one size fits all' solution for every family. Most MFOs offer tailor-made and completely uncomparable services. Some of the providers are specialised in philanthropic or wealth planning services whilst others again focus more on lifestyle management or administrative services in order to improve the family's quality of life. This different angle is often related to the origin of the family office and the experience/background of its founders; indeed, whether the founder is a lawyer or a former banker will significantly impact the breadth of his offering. Even when MFOs offer (primarily) asset management services, significant differences may occur between the providers. There can, for example, be a focus on a certain type of investments, on pure asset allocation or on reporting and consolidation services. The type of client focused on, the size of family wealth or the region out of which clients are serviced also vary widely per provider.

An additional reason why MFOs are so diverse is the fact that to the exception of the United States and Luxembourg, they are not regulated in most...

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