Wealth brings many benefits, as well as challenges, but understanding how to maximize your family’s wealth can make all the difference.
There’s no doubt that wealth brings many benefits. But financial success can bring its own set of challenges. People often find that managing the fruits of their labor demands more time, energy and soft resources (knowledge, licensing, etc.) than they have. That’s because managing wealth requires a vast array of legal and intellectual complexities that are beyond the capabilities of a single individual. These challenges can be exacerbated when extended across multi-generational situations (in other words, family). But what if you were to approach your family’s collective assets like a business? That’s the basic idea behind the Family Office Services.
At their most basic, Family Offices are a team of experts who dedicate themselves to act in the best interests of the families they serve. Family Offices were developed to help families navigate complex financial situations, maintaining harmony within the family, and passing along family values. This arrangement can offer the individuals, and the family as a whole, a number of benefits including:
- Understanding of the complexities that come with wealth
- Synergies that come from pooling resources
- Peace of mind that their wealth is being well managed
- Time to pursue what is most important to them
- Confidence that future generations will be addressed
- Assurance that collective family values will endure
The sophisticated services provided by a Family Office can be extremely beneficial. They can also foster a sense of family community across both distance and time. So why don’t more families utilize Family Office Services? Mostly, it’s cost. In the past, family offices require a large commitment of financial and management resources to keep them running. According to Family Office Exchange, the threshold for considering a single family office is $100 million or more in assets.
However, as more families have sought to reap the benefits of family-oriented wealth management services without having to set up their own single family offices, “Multi-family Office”firms have evolved to serve them. When served by a multi-family office, costs are shared and the strength of total assets is put to work. The administrative “business”-side of the family office is shared but each participating family still receives expert, individualized advice. The multi-family office organization also creates community and gives families an opportunity to network and learn from one another.
As the creation of private wealth in the Pacific Northwest increases, more people are becoming interested in embracing a family oriented approach to wealth. History has shown that generational wealth is difficult to maintain, the challenges of inherited wealth and the need for wise stewardship for generations should be a priority for investor and advisor alike. Families that succeed in this regard commit to come together and collaborate within and across generations.
In our next entry we’ll explore some of the specific services of a Family Office including strategic wealth and cash flow planning, investment management, tax advisory, risk management, estate planning and lifestyle services.
If you’re interested discussing Family Office Services and Cornerstone, please contact us at email@example.com or call 425-646-7600.