Arrowroot Family Office
  • Home
  • Services
    • Multi Family Office Services
      • Accounting
      • Tax Efficiency
      • M&A Advisory
      • Wealth Strategy
      • Family Governance
      • Philanthropic Initiatives
    • Wealth Management Services
      • Investment Management
      • Individual Retirement Account (IRA)
      • 529 Plan
      • Corporate Retirement Plan
    • Financial Planning Services
      • Financial Planning
      • Retirement Planning
      • Estate Planning
      • Tax Planning
    • GUIDELINES TO FINANCIAL FREEDOM

  • Offices
    • Southern California
    • Northern California
    • Michigan
    • Virginia
  • Team
  • About Us
  • Contact
Search
  • Home
  • Services
    • Multi Family Office Services
      • Accounting
      • Tax Efficiency
      • M&A Advisory
      • Wealth Strategy
      • Family Governance
      • Philanthropic Initiatives
    • Wealth Management Services
      • Investment Management
      • Individual Retirement Account (IRA)
      • 529 Plan
      • Corporate Retirement Plan
    • Financial Planning Services
      • Financial Planning
      • Retirement Planning
      • Estate Planning
      • Tax Planning
    • GUIDELINES TO FINANCIAL FREEDOM

  • Offices
    • Southern California
    • Northern California
    • Michigan
    • Virginia
  • Team
  • About Us
  • Contact
AFO2022-11-15T07:45:41+00:00

How to Choose a Family Office That Is Right Fit for You​

How to Choose a Family Office That Is Right Fit for You​

In recent years, the growth and popularity of family offices have skyrocketed, with many high-network families switching over from traditional wealth management services. In the past specialized financial service providers that focused on scattered key aspects of an individual’s personal finances, like estate planning or investment strategy, succeeded in providing the particular individual services that a family was looking for. However, in 2022, more individuals, now more than ever before, are looking for a family office financial service that is consolidated and provides all of the necessary resources, like tax planning, investment strategy, wealth management, and estate planning, all in one place. This not only provides the family with specialized convenience but also allows the family office to familiarize itself with all of the family’s wants and needs in order to provide them with focused care that they would not otherwise see among other financial institutions and offices.

However, all family offices can be different. In order to explore and figure out which family office would best suit you. It is essential to understand the different types of family offices, who they are designed for, and what effect they may have on your own family or individual financial situation.

Table of Contents hide
  1. Family Office Responsibilities
  2. Types of Family Offices
    1. Traditional Family Office
    2. Outsourced Family Office
  3. How to Choose a Family Office That Is Right Fit for You
  4. FAQs

Family Office Responsibilities

Family offices are privately held financial service companies designed to assist wealthy and ultra-wealthy individuals and families with their finances. This ensures that their financial wealth continues to grow for future generations. These private wealth management advisory firms specialize in assisting individuals and families of all backgrounds with services like budgeting, insurance, charity management, wealth transfer planning, and much more. In order to promote the generational advancement of wealth, family offices also specialize in educating younger generations in the proper handling of the wealth passed down to them by older members of the family. This can often help instill an appreciation for the wealth and the responsibilities this fortune requires from them in order to continue to carry out the family’s vision.

Types of Family Offices

Traditional Family Office

A traditional family office has a staff of disciplinary and financial experts who take on the responsibility of protecting, managing and growing a family’s financial wealth. There are many positions within the staff of a traditional family office, including tax specialists, financial advisors, accountants, estate planners, and more. Due to the nature of the family office, all personnel are employed under the same office, so there is no conflict of interest among the team. This is often an issue found when obtaining services from multiple financial firms at one time.

Within the scope of a traditional family office, there exists multi-family offices and single-family offices. Both types of traditional family offices offer the same services; however, multi-family offices offer services to multiple families, while single-family offices tend to stick with an ultra-high-networth single family. Regardless of the arrangement, both types provide personalized wealth-related solutions and plans for each particular family’s financial and household needs.

Due to the fact that multi-family offices have multiple clients, they tend to charge a smaller fee for their services. While this type of family office can be less expensive, the solutions provided tend to be less personalized as a single-family office has the luxury to focus only on a single family and come up with financial solutions specifically tailored to the exact situation the family is in. All time, resources, and professional staff must be shared among multiple families meaning that multi-family offices have less control over tailored planning than single-family offices do.

Helping you achieve your evolving financial objectives

Schedule your advisory call today
Schedule your call now

Outsourced Family Office

An outsourced family office is another type of family office that is not interconnected under one organization. Instead, this type of family office is considered as a network of financial service providers collaborating together for a single client. These service providers include financial layers, financial accountants, and financial advisors, all providing a service to a family or individual. While these professionals work under different departments and financial institutions, they are authorized and given permission to consult with each other about the intricacies and details of a family’s financial situation. This type of family office can be set up fully virtually as well.

Each financial professional has a different role to fulfill for the family. A financial advisor might handle the investment aspects for the family, while an attorney handles the estate plan, and the CPA handles tax strategy. This allows an outsourced family office to coordinate and manage many of the same matters a traditional family office would handle. Even specialized services like family wealth education and philanthropic or charity planning an outsourced family office can support. However, while this type of family office is less expensive than both a single-family and multi-family traditional family office, the office has less control over the specific professionals managing the financial situation of a client. Plans created for each family are less tailored to their specific needs and more generic due to the lack of total control and fewer resources provided for each family with an outsourced family office.

How to Choose a Family Office That Is Right Fit for You

In order to figure out and analyze which family service is right for you and your family, it is important to ask the right questions. Figuring out exactly what financial family office services exist in your area, are the needs limited to just wealth and investment advisory services or more, and does my financial situation and net worth require guidance from an expert in areas such as trust creation, philanthropy, succession planning, and financial structure, is extremely important. Asking questions like, is there a need for a dedicated team to manage my finance, how involved do I want to be with my finances, and to what degree of control should the family office be allowed to have, are necessary to determine what type of family office would work for you and your family.

Generally, the more complex and extensive a family’s financial situation is, the more likely they are to be in need of a traditional family office setup. Ultra-high networth families typically seek services from single-family traditional offices, while medium to high-networth families typically seek cheaper services from multi-family traditional offices and outsourced family offices as they do not need exceedingly tailored plans.

FAQs

What should I look for in a family office?
An ideal family office would employ people who are professionals and have experience in their respective areas of finance or accounting. These professionals should be able to communicate and collaborate well as a team to ensure that the office operates in cohesion as one unit.
What makes a successful family office?
Common attributes to consider in a family office should include measures of financial results and success as well as compliance, urgency, risk, and impact. It is essential not to overlook aspects such as maintaining family unity or preparing the next generation for financial leadership.
How do you structure a family office?
Single-family offices generally include several staff members. The larger, more established, and complex family offices may consist of an executive team comprising a chief executive officer, chief financial officer, chief investment officer, operations manager, and legal counsel.
How does a family office make money?
Family offices invest in private equity, hedge funds, venture capital opportunities, and commercial real estate. Some family offices remain passive and allocate funds to outside managers to promote fund growth for their clients.
What is the mission of a family office?
The mission of a family office is to provide financial services to a family to help them manage the financial complexities in their lives. This includes growing and preserving their financial wealth, supporting the family’s long-term goals, and managing family needs of various kinds.
What is a hybrid family office?
A hybrid family office provides administrative, taxation advice, and legal advice but outsources non-strategic functions. A fully-integrated family office provides administrative, legal advice, tax services, and core investment management functions. All of these functions would remain in-house and would not be outsourced remotely.
References
  1. Deloitte. “Modern history of family offices.”. Accessible From: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-office-fundamentals.pdf
  2. https://www.investopedia.com/terms/f/family-offices.asp
  3. Hawthorne, Fran (March 18, 2008). “The Family Office, Granting Every Wish”. The New York Times. Accessible From: https://www.nytimes.com/2008/03/18/business/businessspecial3/18office.html
  4. KOLESNIKOV-JESSOP, SONIA (September 6, 2011). “Setting Up an Office to Manage a Wealthy Family’s Affairs”. The New York Times. Accessible From: https://www.nytimes.com/2011/09/07/business/global/setting-up-an-office-to-manage-a-wealthy-familys-affairs.html
  5. Das, Anupreeta; Chung, Juliet (March 10, 2017). “New Force on Wall Street: The ‘Family Office'”. The Wall Street Journal. Accessible From: https://www.wsj.com/articles/the-new-force-on-wall-street-family-offices-1488991396
  6. “A Simple guide to family office structure”. Simple. Retrieved 2022-09-12. Accessible From: https://andsimple.co/guides/family-office-structure/
  7. “How to start a family office | A Simple Guide”. Simple. Retrieved 2022-09-12. Accessible From: https://andsimple.co/guides/how-to-start-a-family-office/
  8. “What is a multi-family office? | A Simple Guide”. Simple. Retrieved 2022-09-12. Accessible From: https://andsimple.co/guides/multi-family-office/
Family Office, Financial Planners, What are the Wealthy investing in?

Share this post

Facebook Twitter LinkedIn Email WhatsApp

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *


Related Posts

29AugAugust 29, 2022

Family Office: Overview, Responsibilities, Types and FAQs

Family Office: Overview, Responsibilities, Types and FAQs A family office is a private wealth management advisory firm that serves individuals and... read more

8 Reasons Why You Need an Experienced Financial Planner
06DecDecember 6, 2022

8 Reasons Why You Need an Experienced Financial Planner

8 Reasons Why You Need an Experienced Financial Planner A financial planner is an important advisor who provides various financial services... read more

Top 10 Best Wealth Management Books to Read in 2023​
06DecDecember 6, 2022

Top 10 Wealth Management Books to Read in 2023

Top 10 Wealth Management Books to Read in 2023 The field of wealth management is broad, yet the services that wealth... read more

30MarMarch 30, 2021

What Are The Wealthy Investing In?

A common question we hear from clients is “What are the wealthy investing in?” or something along the lines of... read more

03MayMay 3, 2021

What Are Fee-only Financial Planners?

Fee-only financial planners do not receive any sort of commission for recommending or selling you various products. This is beneficial... read more

Trust and Estate Planning: All You Need to Know​
16JanJanuary 16, 2023

Trust and Estate Planning: All You Need to Know

Trust and Estate Planning: All You Need to Know Estate planning is the process of creating a comprehensive plan that designates... read more

LEARN HOW!

Services

Links

Newsletter

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 725 Barclay Circle, Suite 215, Rochester Hills, MI 48307
    (248) 453-5252
  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning
  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs
Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form ADV Part 2.pdf

Form CRS

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

Services

Links

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 705 Barclay Circle, Suite 215, Rochester Hills, MI 48307
    (248) 453-5252
  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning
  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs

Newsletter

Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form CRS

Form ADV Part 2.pdf

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 705 Barclay Circle, Suite 215, Rochester Hills, MI 48307
    (248) 453-5252

Services

  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning

Links

  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs

Newsletter

Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form ADV Part 2.pdf

Form CRS

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

Please note that you are exiting Arrowroot Family Office's website and entering one of a separate company. Arrowroot Family Office does not recommend or confirm any information on this site. Please read all disclosures on Arrowroot Family Office's website and that of the company's page you are about to enter. Continue Cancel