The Future of the Family Office and the Family Office Advisor
The traditional family office has been focussed on wealth management, family governance and philanthropy. The family office of the future will serve single or multiple families and, alongside exercising the traditional role of wealth preservation, will continue to expand its reach into ever broader areas.
In the last few years, single and multi-family offices have continued to expand their focus to conduct transactions which were previously the reserve of large corporates, private equity or investment houses.
There are currently more than 10,000 single family offices globally holding assets in excess of $5 trillion and their number grows at pace. The single family office is the traditional form, carefully managing and preserving the wealth of one family, cascading that wealth through the generations and pursuing its philanthropic aims. In recent years the multi-family office has become much more prevalent, supporting the wealth and investments of more than one family.
We will see both single and multi family offices gaining in professionalism and acquiring the look and feel of a corporate with formal reporting, investment boards (including seats for family and non-family professional advisors) and refined mission statements.
The current family generation are showing signs of being more focussed on direct involvement in environmental, governance and social projects rather than philanthropy - this being seen as a more impactful use of the family’s’ wealth. The Family Office Exchange study, Engaging the Client of the Future, highlights five important themes applicable to the current generation. They “prize relationships”, and must relate to advisors on a personal level; they “crave authenticity”, whether in work, play, consumption or investing; they “operate in real time”, being inundated with information; they value entrepreneurship; and are sophisticated, highly educated and well-traveled.
The advisor to the single or multiple family offices who instinctively understands these attributes will build the long lasting and trusting relationship needed to ensure that the family office wealth is preserved, expanded and applied just as the family wishes.