DEFINITION
Family Office
A family office is a private wealth management advisory firm that serves ultra-high-net-worth individuals (UHNWIs) or families. They are often tailored to meet the unique needs of affluent families, including both financial and personal services, and can be structured as a single-family office (serving one family) or a multi-family office (serving multiple families). Family offices typically offer a wide array of different financial services such as investment management, estate and tax planning, philanthropy management, and so on.
Synonyms
Private wealth advisory
Acronyms
SFO, MFO
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Synonyms
Private wealth advisory, high-net-worth wealth management
Acronyms
Single Family Office (SFO), Multi-Family Office (MFO)
Examples
A wealthy family with a substantial business empire enlist a single-family office (SFO) to manage their financial affairs. The family office oversees their investment portfolio, provides strategic tax planning, and manages the family’s real estate holding among other things. Additionally, the family office coordinates legal services and handles family governance matters to ensure wealth preservation for future generations.
FAQ
What is the difference between a single-family office (SFO) and a multi-family office (MFO)?
A single-family office is dedicated to managing the affairs of only one family and typically offers a completely tailored approach to their wealth management. A multi-family office on the other hand serves multiple families and thus typically provides a more standardized approach to wealth management. MFOs are generally more cost-effective but SFOs provide a much more personalized service.
What services do family offices typically provide?
Family offices provide a wide array of services, such as investment management, estate and succession planning, tax strategy, risk management, and philanthropic advisory. In the case of single family offices, they might also provide more personal services such as managing personal affairs, travel planning, and security arrangements.
How do family offices help with generational wealth transfer?
Family offices assist with generational wealth transfer by developing comprehensive estate plans and governance structures to ensure the smooth transition of wealth to future generations. They often also provide guidance to future generations, in the form of creating family constitutions and educating future generations on wealth stewardship.
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