Challenges Ahead For Wealthy Families

Significantly wealthy families face a growing number of choices

and challenges concerning how to manage their assets, ensure smooth

succession planning and develop and maintain a shared vision for

the family's future.

So there is a need to examine issues facing high net worth

families looking to preserve and grow their family's wealth and

standing, whilst always ensuring they safeguard their fundamental

beliefs and vision. In particular the areas to be addressed will

include family offices, governance and notable recent changes to

tax legislation.

Family offices continue to grow in popularity as the number of

high net worth families across the globe multiplies.

However, issues connected with family offices such as succession

planning, investments, taxation and governance are becoming more

complex. The decision even to establish a family office is a

daunting one but following this it is necessary to decide just what

type of family office is best suited for the family. A large number

of factors, such as the size of the family, its goals and its net

worth, all contribute to determining which model of family office

is the most appropriate.

Single-family offices can deal with a range of issues, including

management of investment portfolios and real estate holdings, tax

and succession planning and in some cases concierge services. It

can serve as a central contact point for distant branches of a

family, making communication among members more efficient and

helping all members of the family remain involved.

Often such an office is staffed by professionals who can act as

strategic advisors, overseeing investments and monitoring tax

reporting and compliance issues. Loyalty and trust are paramount.

In such an office, the staff will be completely dedicated to the

family's needs and the privacy of a family's affairs will

be guarded closely. Because of the significant expense involved, a

single-family office is normally only economic or suitable for

families with a net worth of $500 million or more.

Given the scale of assets required for such a single family

office, for many families a multi-family office is often more

appropriate. In this model a number of families with similar goals

and values join together to take advantage of the economies of

scale that their combined resources can bring to the management of

investments and procurement of services. Examples of such

multi-family offices in the UK include SandAire and Fleming Family

& Partners.

...