With an estimated 6,500 to 10,500 family offices worldwide, there is no blueprint of how family offices should operate or be structured. Managing the complexities of a wealthy family and protecting their wealth can take many different forms, from the simple coordination of several advisers to engaging a full suite of services including staff management, payroll, asset management, and family governance advice.
Family offices have always been unique and complicated, with variable family dynamics and multiple generations often spread across the world. The complexities of beneficial ownership and economic substance regimes; the impact of an unanticipated global event like Covid-19; the sophistication of cyber-attacks; the necessity for effective succession planning arrangements; and the need to educate the next generation on how to manage wealth are testing existing governance and operational frameworks and have, in many cases needed to be revisited and revised to consider different lifestyle patterns.
Most larger family offices have robust governance frameworks in place to manage the effects of these market forces, but many medium to smaller sized family offices are only now beginning to recognise the importance of a robust operational governance model and to learn what that may look like. From sitting down to develop a shared family vision and building clear avenues for communication, to creating a customised governance structure and baking in operational flexibility, laying down these fundamentals and reviewing them regularly gives a family office the best chance of achieving longevity and success.
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