As a global membership organization dedicated to single family offices we believe it’s important to keep conversations going. Our goal is to explore all facets of the advantages a single family office has to offer. Sharing ideas and experiences is an excellent way to do this. We welcome you to our blog and we look forward to wonderfully robust discussions on topics that you find of interest.

Why the Single Family Office (SFO)?

Part of the answer to this question may seem obvious as there are multiple advantages single family offices have to offer with which families are already familiar. Are families as robustly aware of all advantages SFOs have to offer as they should be? We don’t think so! In a rapidly and ever changing world, new challenges are ever on the horizon and in a globalized and technology driven world, ways to meet those challenges are always evolving. New challenges are accompanied by new opportunities. That’s one reason we’ve started this blog – sharing insights together, among families as well as members of our Resource Council, can be invaluable in highlighting the ways SFOs enhance the family wealth management paradigm.

Many basic advantages are the same as the offices of old, yet innovative thinking offers innovative approaches. Many more are emerging against the backdrop of a different economy and a changing marketplace.

The single family office has its roots in the relationships of trust built between Old World merchants and those they trusted to care for their assets and their families while they traveled the then-known world. European private banks sprang from these relationships of trust and the first family offices were eventually developed as these unchartered banks migrated to the New World. The greatest appeal was the private manner in which families could conduct their business with little or no government regulation.¹Family offices in the Americas blossomed as the early industrialists built unprecedented wealth. Today, interest in family offices is spreading throughout Europe, Asia, and Latin America.

The ultimate place of privacy is still the single family office, even though advent of social media has changed how we think about the word ‘privacy.’ And, although many family office functions seem to revolve around the investment piece, other benefits single family offices offer are as varied and unique as the family itself.

SFOs benefit families most effectively as a service entity rather than as a proxy for family member involvement. Viewing the SFO as an entity which serves the family offers the family the ultimate in ensuring the flourishing of their wealth over multiple generations. This view actually supports the optimal management of the family wealth by keeping the focus on the family’s collective and individual needs and goals as investment strategies are designed. SFOs are unique since they are organized and legally structured as an entity, yet the ‘business’ of the office is to serve the family within the focus the family has set for the office. Some of those focuses include entrepreneurialism, sustaining a legacy, managing global interests, lifestyle management, or a collective long-term investment strategy.

In addition to the basic focus of SFOs, families today have new challenges to face, largely in dealing with whatever new regulations will be coming from the regulatory bodies that define a family office. These are new risks family offices face in addition to managing the risks normally associated with investment strategies and choosing the right advisors. Underlying risks which are ever present have to do with family dynamics and making decisions together, finding a governance system that fits a family’s needs, and empowering family members within those governance structures. Risks in these areas are easily overlooked until a family crisis erupts or a critical family decision needs to be made.

In essence, the quality of SFO service to the family must be ever increasing; its approach to risk management must be much broader today than even in the recent past. An SFO serves the family most effectively as a resource for advice and a conduit through which the family can develop strategies and identify solutions that truly fit their needs. As we publish this initial post, we’d like to have your comments on the advantages you see from having a single family office in today’s world of increased risk and family’s ever evolving need to find customized solutions based on their families needs and outlook.

Author: Angelo J. Robles, Founder and CEO, Family Office Association

¹The New Family Office: Innovative Strategies for Consulting the Affluent,” Lisa Gray, Euromoney Books, London, UK.

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