The Advantages Of A Multi-Family Office For High Net Worth Families

While there is a degree of interdependence among different parts of the financial services industry, one trend that has surfaced is the growth of niche multi-family offices and the emergence of the concept of the multi-family office as an alternative to generalist firms.

Multi-family offices are a great option for high-net-worth investors and families with large estates to manage. In this article, we’re going to discuss the advantages offered by multi-family offices, and share some of the aspects to be mindful of when choosing one.

What is a multi-family office?

Before we start getting into the advantages offered, you’re probably wondering exactly what is a multi-family office? A multi-family office is a type of financial adviser that advises multiple clients at once rather than a single client. These firms can generally be found at the centre of a community of lawyers, accountants, and consultants who advise their clients, who are typically from the worlds of real estate, hospitality, oil and gas, and entertainment. But the multi-family office doesn’t limit its clients to people in those industries. Most of the wealth of the rich is located outside their industry — professional sports, Hollywood, television, and software, to name a few. Because of this, these wealthy individuals require a little more hands-on care.

Set up of funds

A multi-family office has access to all aspects of an individual’s finances and can plan for their eventual demise. Also, for those who hold multiple assets, this provides one location for them to manage all of them, as well as an administrator to help make decisions. This does not replace a family member’s role but can give them the time and resources they need to make financial decisions that are best for their families and protect them from “too big to fail” situations.

Monitoring and oversight

When managing multiple family’s finances and assets, it can be difficult for a financial advisor to keep all the information up-to-date, so there are benefits to having a team of professionals reviewing everything with the family member, which is almost impossible to do with a family member managing the investments, transactions, and balances. While some professionals will take this into account in how they provide services, the multi-family office has the ability to do this on top of managing many other things.

Managing a non-physical portfolio

There are very few “natural” portfolios out there in terms of a product and strategy that is managed just by portfolio managers. Most clients require an advisor to give them advice on a variety of strategies such as fixed income, equities and multi-asset portfolios, all of which require a different investment approach. A multi-family office can provide a single point of contact that can take the complexity out of this, and also allow the advisor to focus on their clients’ financial planning, not just managing assets.

Managing wealth-creation

In a family that has the financial resources of a multi-millionaire or billionaire, it makes sense for a multi-family office to help create or grow wealth. While it can be difficult for an advisor to keep track of all the details, they can manage the planning and create a road map for the family’s future. Not only do they help with retirement planning, but they can help build wealth for their children and other heirs as well.

In today’s market, it can be difficult for a high-net-worth family to do all their financial planning from a single location. The benefits of a multi-family office can be too hard to ignore and provide peace of mind and visibility into the future of their wealth.

Financial & tax planning

A multi-family office can give the family all the support they need to plan and make decisions for their financial future. Not only can they manage the family’s investments, but they can also provide clients with legal and tax advice on estate planning, tax issues, risk management, tax planning, charitable giving and a wide array of other wealth management services. Planning for a financial future is not an easy task, so it is easy to get overwhelmed or lose sight of the big picture. By having a dedicated team, it is much easier to stay on top of what needs to be done.

Global investments

A multi-family office offers a way for families to take their wealth around the world, and manage different assets in multiple locations. Their clients can have a single point of contact to manage everything from their investments in Ireland to their local real estate portfolio. For those that live overseas, it makes sense to have their financial advisor work with local experts to provide advice on real estate, legal and tax laws and more. This provides more transparency to the client and ensures that they know what is going on with their assets in their home country as well as abroad.

While multi-family offices are now on the rise, they are still largely the preserve of the ultra-wealthy and corporations. With recent legal changes, the global financial landscape, and the increased popularity of the sharing economy, this is only set to grow.

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