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

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!