As a family advisor, your work is constantly changing and your knowledge is ever-expanding as you help families through each stage of their lives and as you develop your skills working with other professionals (accountants, lawyers, investment and real estate professionals, etc.) to achieve the family’s goals. No two days are the same, as you are involved in holistic decision making and you can witness the impact of the process on the family’s big picture.
To be an effective family advisor you need to be expert, experienced and trustworthy, so you can help clients navigate through their often-complex issues with a clear and steady focus on their goals and objectives. While you need to be competent and have very strong technical skills, they must be accompanied by the ability to coach people through processes and discussions that have far-reaching effects and to recognize behavioral financial biases that may be holding the family back.
Working in a family office is different. It can bring people who are accustomed to cold, hard calculations and analysis into a world where interpersonal skills are required and rewarded, in a boutique entrepreneurial environment.
A family office takes many forms but is generally a structure or company that looks after a wealthy family's wealth and interests. When I was working for as an advisor for a Family Office it would typically, involve managing their investments, properties, and structures, whilst also offering personal services such as managing household staff and making travel arrangements. A traditional family office would also cover day-to-day accounting, payroll, tax services, legal affairs, charitable giving, and succession planning.
Family offices work with extremely wealthy families, otherwise known as ultra-high net worth (UHNW), typically, it is said, with a net worth in excess of $100 million. Generally, true family offices are very private organizations.
The purpose of a family office is to manage, preserve and increase the family's wealth for both current and future generations, whilst also providing for the family's day-to-day running costs. Generally, the following types of family office are referred to:
Single Family Office - this is the name given to a structure that looks after just one family's wealth.
Multi Family Office - this is the name given to an organization that looks after the wealth of multiple families.
Working within a Family Office
The financial side of the family office is typically split between the functions above and can be made up of a Chief Executive Officer (CEO), a Chief Financial Officer (CFO), a Chief Operations Officer (COO), with the investment aspects being overseen by a Chief Investment Officer (CIO). It goes without saying that within those, or accompanying those, are the need for Accountants, Tax Specialists, Analysts, Portfolio Managers, Investment Managers, Trust Officers, Wealth Planners, etc.
Asides from the financial side, the legal aspect is also worth noting, and a family office could contain an in-house lawyer or General Counsel.
The family office would typically have an administrator or personal assistant, and this could be just for the family office, or may also be at the disposal of the wider family.
Looking after the personal affairs of the family is another non-financial aspect of the potential job functions, and typically this would involve household / domestic staff jobs, such as Housekeepers, Estate Managers, Butlers, Valets, Chauffeurs, Gardeners, Nannies, and more.
This personal aspect could extend to the other assets that a wealthy family might own asides from their properties, such as yachts or private jets for example, and the following specialist jobs could also be seen as part of the family office: yacht crew staff, private jet staff, etc.
Some of the functions above, particularly the financial and legal, can be outsourced. Working at a financial institution surrounded by numbers in an extremely fast-paced environment, you can become desensitized to the amount of money you are actually trading. It can become quite easy to lose sight of the fact that you are handling more money in one instant than most people see over the course of their entire lives.
Working in family wealth is the exact opposite of this. Instead of the human element being diminished, it is magnified, as we become involved in its first-hand effects on the lives of the families and those around them.
Family office advisors need to have excellent interpersonal skills, but these skills are not to be confused with those of a good salesperson. The family advisor is not there to sell a particular investment product, but rather to try to provide value and find solutions to an array of financial and life challenges. This sets the family advisor free from other considerations or pressure and allows them to focus on the family and what is best for them and all those to whom they wish to pass on benefits. A family advisor also needs to be able to manage conflict that might arise, and to be flexible and dedicated to deal with any of the unique challenges that might come their way.
Family office clients are looking for an integrated and professional approach to their wealth management. They want a bespoke and unconflicted service as opposed to a product-oriented one. They want their advisor to offer a tailor-made customer service which considers the whole range of expertise available to them.
Family offices generally take up the investing style of the principal. For example: if the principal is self-made, investments are generally geared towards the higher risk spectrum, targeting VC and more speculative investments. On the flip-side, if you get old money, they are extremely conservative and purely care about wealth preservation. A lot of work must go into understanding the family's comfort and knowledge of the investment world, who takes final decisions, how investments are evaluated and scrutinized, etc.
In my experience, there are many benefits of working in the family office field. It provides the opportunity to work in a rapidly growing industry with highly skilled professionals and entrepreneurs who are helping families plan their future and take the necessary steps to make it happen. As a family advisor, you have the privilege of helping families navigate the interesting but complicated world of investment and financial planning. It is interesting and inspiring work as families’ stories unfold, and it is work that allows people with insight and dedication to come together to achieve good things. I was happy to be a part of it.