There are different types of family offices, each with its own specific purpose and structure. The three main types of family offices are the single-family office, the multi-family office, and the virtual family office. These different types of family offices cater to the unique needs and preferences of wealthy families, says Attorney Tommie Harsley. Which type of family office is right for you? Read on to find out.
Attorney Tommie Harsley Lists The Different Types Of Family Offices
Single Family Office
According to Attorney Tommie Harsley, a single-family office is an entity that manages the wealth of one wealthy individual or family. It typically provides investment management, estate planning, and tax services for the high-net-worth family. Single-family offices are generally exclusive entities owned by a single wealthy investor who has more assets than can be managed efficiently with a personal financial advisor. These offices usually provide discretionary investment management, estate planning, and trust services, tax preparation and consulting asset protection services, and philanthropic planning. They may also offer additional value-added services such as concierge services and access to leisure activities such as private clubs, luxury vacations, and fine dining experiences.
Multi Family Office
A multi-family office is similar to a single-family office but serves more than one family. These offices are usually created by private banks or asset management firms in order to manage the wealth of multiple high-net-worth families. Multi-family offices typically offer the same services as a single-family office but typically with a larger team and resources to support many families at once. They may also offer additional services such as business strategy consulting and legal advice.
Institutional Family Office
An institutional family office is an entity that manages the wealth of an institution, such as a university endowment fund or a large charitable foundation. Like multi-family offices, these entities usually provide investment management, estate planning, and trust services, tax preparation and consulting asset protection services, and philanthropic planning. However, because they are managing the wealth of an institution, they may also offer additional services such as corporate finance advice and consulting real estate management, and venture capital investing.
Virtual Family Office
A virtual family office is a modern variant of the traditional single or multi-family office. These entities focus on providing cost-effective solutions to families looking to manage their wealth without having to set up a physical office space. Virtual family offices typically provide many of the same services as traditional family offices but are generally more tech-savvy in order to keep costs low for the client. They usually provide advice over email and video conferencing, use automated investment software and employ cloud computing technology. In addition, these entities may offer access to resources like market research, tax planning tools, and investment strategies.
Discretionary Family Office
A discretionary family office is a type of single-family office that focuses on providing advice and services to families with complex financial planning needs. These offices typically offer estate planning, asset protection, philanthropic giving, tax planning, and retirement planning services. Discretionary family offices may also provide lifestyle management services such as executive coaching, private travel arrangements, and concierge services. The advisors employed by these offices are usually highly knowledgeable in multiple areas of finance, as per Attorney Tommie Harsley, making them well-suited for managing the wealth of very wealthy clients who require comprehensive financial advice.
Attorney Tommie Harsley’s Concluding Thoughts
There are different types of family offices, each with its own unique structure and purpose. The most common type is the single-family office, which serves one wealthy family. However, there are also multi-family offices that serve multiple families, as well as virtual and hybrid family offices. Each type of family office has its own advantages and disadvantages, so it’s important, according to Attorney Tommie Harsley, to choose the right one for your needs. If you’re not sure which type of family office is right for you, our team of experts can help you find the perfect match.