The single family office industry is still young. As it grows, families will encounter new opportunities and challenges in education, staffing, access to investments, and compliance.
An industry still taking shape
The term "family office" has only been widely used for about twenty years, and many people in finance have not heard of it. I saw this firsthand when a wealth management professional near New York City told me he had never heard the term. Greater education and more coverage in financial publications are helping families learn that this model exists.
The industry is also becoming more clearly segmented. Single family offices, multi-family offices, and virtual family offices serve different needs. As the industry matures, I expect different types of single family offices to emerge as well.
Professional teams and talent
I expect more single family offices to develop websites, business cards, and professionalized teams. These offices may seek more institutional-level access to deal flow, fund managers, and real estate opportunities. There are benefits to operating this way, especially for established groups that value high-quality deal flow.
Finding talent is difficult today. Qualified professionals may be well suited to work in a single family office but may not know where to find those opportunities. I expect more sophisticated ways to identify both career openings and candidates for family office teams.
Regional networks and education
Regional family office networks and associations can help the industry grow. The chapter describes groups in London and Australia, and an association launched in India. These groups can share education with ultra-wealthy families and help build connections across the industry.
My aim is to support a healthy global industry and work with regional and national associations. Sharing what we learn from family offices can help identify useful practices, operating models, governance pitfalls, and ethics standards.
Growth and regulation
A larger industry with more assets under management will likely face more regulation. Misconduct by a small portion of the industry, including bribery, insider trading, or fraud, can draw significant attention. The chapter points to the Dodd-Frank Act proceedings in 2011 as an example of how legislation can bring attention to family offices and raise the possibility of future oversight or compliance requirements.
Families should take compliance seriously as they build their offices. The chapter suggests that professionals who gain experience as chief compliance officers for several single family offices may be well positioned as the industry develops.
Action checklist
- Learn the differences between single family offices, multi-family offices, and virtual family offices.
- Identify which operating model fits your family's needs.
- Consider whether a professionalized team could improve access to deal flow and investment opportunities.
- Build a plan for identifying and recruiting qualified family office talent.
- Connect with regional or national family office networks that support education.
- Review governance, ethics, and compliance needs as your office grows.
From the book
"We see our role as helping grow a healthy single family office industry globally, and we look to partner with regional or national associations all over the world. "
"Over the next few years, there will be more sophisticated methods of identifying new career opportunities for single family office executives and also for finding talent for single family office teams if you are a wealthy family yourself. "
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