First generation families who are in the process of building a family office often receive the same piece of conventional wisdom: that family wealth passes from “shirtsleeves to shirtsleeves in three generations.” A punchier version is also frequently said: “Generation one makes it, Generation two spends it, Generation three blows it.” But where does this ‘universally accepted,’ conventional wisdom come from? And why is it so ubiquitous among family office service providers and wealth advisors in the marketplace ..read more

Creating an SFO to fit your family’s specific needs and circumstances requires considerable thought and   preparation. Families considering forming an SFO should put together a motivated group of family leaders and trusted advisors to lead the planning effort, with input from outside specialists, as necessary. The following, while not totally comprehensive, serves as a helpful checklist to get started ..read more

The concept of the Multi Family Office (“MFO”) appears to offer the best of all possible worlds for a wealthy family who isn’t ready (or perhaps large enough) to start a Single Family Office (“SFO”) of their own. Under one roof it promises a convenient repository for all documentation, reduced overhead, consolidated buying power, diversified risk management, plus economies of scale and talent. But despite their theoretical promise, in practice an MFO must manage a complex set of conflicting interests while simultaneously navigating a financial industry that is largely focused on short-term gai ..read more

“Fear of Missing Out” (aka FOMO) is that anxious feeling of not being included in something with others, such as an interesting or enjoyable activity. The concept was originally used to describe social behavior, a form of self-inflicted peer pressure to participate in social activities. More recently the term has been taken up by the behavioral finance community to describe how investors follow the trades of others in order to “not miss out” on the next big thing. FOMO is a common experience, but in the world of investing it is usually associated with poor decision-making. After all fear rarel ..read more

Here is a familiar story for family office investment teams: an email arrives, perhaps from a principle looking to learn more about an opportunity; or a deal comes through trusted advisors or the CIO. A family office management team wants to make sure they thoroughly investigate the opportunity in order to provide value to the family. Resources are allocated, introductory phone calls are made, and before long a young analyst is writing up reports on an industry she’s not familiar with, while trying to model an aspirational J-Curve into something that approximates reality. Weeks might be dedica ..read more

Here is a familiar story for family office investment teams: an email arrives, perhaps from a principle looking to learn more about an opportunity; or a deal comes through trusted advisors or the CIO. A family office management team wants to make sure they thoroughly investigate the opportunity in order to provide value to the family. Resources are allocated, introductory phone calls are made, and before long a young analyst is writing up reports on an industry she’s not familiar with, while trying to model an aspirational J-Curve into something that approximates reality. Weeks might be dedica ..read more

The structure of your SFO will depend on the jurisdiction(s) in which it will operate and the types of investments the family owns or intends to own… Many SFOs in the USA are structured as limited partnerships or limited liability companies and are organized similarly to hedge fund management companies (i.e. the SFO entity does not own any of the assets it manages; rather, it is a service entity that provides services to the SFO’s clients on a contract basis). It is highly recommended you engage with experienced securities counsel who have worked with other family offices regarding the potenti ..read more

Governance is an important issue for any professionally run Single Family Office (“SFO”). Indeed, an SFO that is intended to serve a family for generations is well advised to develop and implement an effective and appropriate governance structure that can significantly enhance the long-term success of the office. At its core, governance is simply a set of procedures that define how an SFO will make decisions. For governance to be effective, the owners, overseers (board of directors or advisors) and executive management must be informed, understand their respective roles and responsibilities, a ..read more

Many SFOs fail to invest in the robust technology infrastructure needed to optimize their capabilities, either due to a lack of execution or a lack of awareness around available solutions. Here are six key technology needs for SFOs, along with a roadmap for the five key activities required for meeting those needs ..read more

The people that comprise the team who oversee and manage the SFO will be the most critical factor in the ultimate success of the family office. While staff can be hired and fired, having a stable and high functioning team is desirable, if not essential.  There’s an old adage in the family office world that “an SFO is either the best place in the world or the worst place in the world to work, and it all depends on the family and how they treat the people that work for them”. If you want great talent, who will stay with you over the long term, you should expect to treat them well and pay th ..read more