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Book Review

Everything you need to know about the family office in one place  

IbyIMD+19 January 2024 • by Peter Vogel in Book Review

IMD’s Peter Vogel and Martin Liechti of the Cambridge Family Enterprise Group demystify the concept of the family office, explore emerging trends in the field of dynastic wealth, and share insights into...

IMD’s Peter Vogel and Martin Liechti of the Cambridge Family Enterprise Group demystify the concept of the family office, explore emerging trends in the field of dynastic wealth, and share insights into the best ways to safeguard your family legacy in an increasingly complex investment environment.

In recent years, we have seen the largest explosion of wealth – and the largest transfer of wealth – in history; a trend that has brought with it a significant increase in the number of high-net-worth individuals (HNWI) globally, especially in Asia.

Not surprisingly, this trend has also given rise to a substantial increase in the number and variety of family offices. A family office can take many different forms but may be considered broadly as a structure, organization, or company that looks after a wealthy family’s wealth and interests.

At the same time, given that investment has become ever more complex, the world of the family office has not only changed significantly but is constantly transforming. As a result, a lot of families that have appreciable wealth – such as family businesses that have operating companies – are looking at ways to diversify and asking such questions as: “How can we de-risk?” “How can we safeguard family wealth and assets following a liquidity event?” And “How can we manage decision processes in ways that are equitable and transparent?”

Protecting against vulnerability

Today, if you asked a group of 30 families, “What is a family office?”, you’d get 30 different answers – all of which are right and wrong at the same time. In other words, there is great confusion around what a family office is and is not. Very often, especially in the wake of a liquidity event, families and the family enterprise ecosystem are extremely vulnerable. They may suddenly find themselves without the protection of the founder or guardian who was holding things together and in a position where they need to redefine who they are and find a new purpose. In this vulnerable state, they are liable to be approached by all kinds of service providers, many of whom are very good – but how do you know if they are? How do you navigate your way through this new and difficult terrain?

Family Office Navigator

This is where our new book comes in. Family Office Navigator, which I wrote with Mario Marconi, is the second work in the Navigator trilogy, a series that began with the Family Philanthropy Navigator in December 2020. The motivation for writing the book was simple: to address the questions above. The answers depend on the profile of the family members and their differing ambitions and appetite for risk; not least because, in an era of digital transformation, assets have been transferred to a new class of wealth owners and a generation that may think and act very differently to its progenitors.

And the world for enterprising families is becoming much more complex – families are scattered around the world and their assets are increasingly liable to be cross-border, too, which means families are exposed to multiple regulations and jurisdictions. All this requires bespoke services to help these families navigate this difficult terrain.

Family office panoramic picture
“If you asked a group of 30 families, “What is a family office?”, you'd get 30 different answers.”

The world of investments has also become more complicated. It’s no longer easy – as an individual or as a family, even if you’re well-qualified in the financial space – to make good calls. We live in a complicated world where we don’t really know what’s going to happen next.

The value proposition

We have seen tremendous change in the last 20 years in the family office space. Family branches have joined together, family members who were executives in the financial services world left to serve the family’s interests, and organizations such as law firms and banks have created dedicated functions to attend to the needs of a certain family.

In reality, however, there is no office – there is only a service. The biggest recent growth in the ecosystem has been the rise of the hybrid and virtual family office, and we are convinced that the virtual family office will be the gold standard in the coming years. Why? Because it allows family members to choose what they want to have in their office and what services they want to buy. That means digitalization is at the core of the ‘office’ and is fundamental to good service – which is synonymous with a light service.

The value proposition of the Navigator is to help families understand the role of the family office as part of the family’s ecosystem. How do individual members and families know where to start? What’s the greater purpose of the exercise? How does the family office fit in? Resolving these questions enables you to identify clearly the type of services and activities that you really need. This in turn enables you to decide the things you need to have in-house versus those that are better serviced outside the family office, giving you more opportunity to think about the necessary governance structures and allocation of resources.

A key part of the value proposition relates to cost – which is, of course, the major concern to most families, but also the hardest part of the equation. Today, if you go to an established family office, the cost of managing the family’s wealth could range typically from 1–3%. We believe this sacrifices way too much in terms of cost. Efficiency is crucial because it is about having access to talent and investment ideas, which is where the virtual/hybrid family office is key. There are many ways to manage affairs through a virtual family office, but we believe the associated cost should be around 0.5%.

The greater purpose

The process of establishing a family office should not necessarily begin with establishing the lowest-cost way to manage the family’s wealth. It should begin with understanding the role of the family office as part of the family’s ecosystem. This means addressing questions such as, “What’s the greater purpose of it all?” “What do different family members want out of the process?” And, “Where do we start?”

Family Office Navigator is a toolkit for individuals and families (and their advisors) to find answers to these questions as they navigate their way through the family office. The book requires no specialist financial knowledge to interpret it and is written in a way that everybody in the family can understand. We hope you have as much fun reading it as we did writing it!


Peter Voegel - IMD Professor

Peter Vogel

Professor of Family Business and Entrepreneurship at IMD

Peter Vogel is Professor of Family Business and Entrepreneurship, Director of the Global Family Business Center, and Debiopharm Chair for Family Philanthropy at IMD. He is Program Director of Leading the Family Business, Leading the Family Office, and Lean Entrepreneurship. Named in the Poets&Quants 2022 list of the best 40 MBA professors under the age of 40, Peter has been published in peer-reviewed academic journals and has written a number of books, book chapters, and scientific and practitioner-oriented reports.


Martin Leichti

Associate partner at Cambridge Family Enterprise Group

Martin Liechti is a senior advisor and associate partner at Cambridge Family Enterprise Group, a global organization founded in 1989 that is devoted to helping families achieve long-term and lasting success for their families, enterprises, and financial wealth.

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