Frequently, we encounter the question, ‘What exactly is a family office?’ and how does it distinguish itself from a family business? Understanding the nuances between these two entities is crucial in navigating the intricate landscape of family-driven financial structures.
Separate to a family business, a family office supports the family itself : generally providing services tailored to the needs and objectives of the family for which it is established.
This includes managing the family;s private wealth and affairs, philanthropy and educating the younger generations.
Is my family eligible for a family office?
While any family can think about these same issues and investment goals, we recommend you adopt Family Office Start-Up with a minimum of $2 million to invest.
A good test is to ask your family – immediate, extended and intergenerational – if they are interested in:
- Protecting family assets, wealth and creating a legacy;
- Intergenerational transfer of wealth;
- Separating the family business and family wealth; and
- Formalising a family structure and governance.
While some families may have had this nest egg to invest outside of any businesses they own or operate for some time, others may also consider a family office when they have inherited significant wealth, or just sold a business or an investment that has returned significant wealth.
What could my family office focus on?
The focus and priorities of a family office is unique to each family. We work with your family to transform your ideas into a long-term vision for your family.
We are seeing a real desire for family businesses looking to diversify. This involves a strategy to extract excess cash from your business in a tax-effective manner so the family can diversify their interests and set up a family office.
The initial goal may be vague, but what we often hear families talk about is the aim to help the next generation get into the property market. We work with families to turn this high level goal into a reality. We can assist in formulating a tax strategy for you to extract funds. You can create an entity that acts as a family bank – that is, uses the family wealth to on-lend to the next generation to buy property. The loan can be repaid interest and principal to ensure you provide financial education and responsibility to the next generation. Our team acts like a concierge for your family and interacts with you and your solicitor. This ensures loan agreements are formulated and the family’s assets are protected from any potential relationship break ups or legal claims down the track.
Working with clients
We can assist you family kickstart their Family Office. We provide simple steps to create a holistic approach to managing your family wealth, as well as the intergenerational transfer of wealth.
Our aim is to simplify the process. This allows families to have easier access to a team supporting you to set up a structure and education platform focused on building your family wealth.