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Managing your family finances as a business
Whether you’re searching for new avenues to improve the longevity of your financial portfolio. Or you’re looking to set down a concrete succession plan for your family business in the near future. Establishing a family office is an increasingly common way for ultra-high-net-worth (UHNW) business families to properly manage their family wealth.
Providing you with the expert advice and essential tools necessary to make sound financial investments and growth decisions, a family office can quickly become the cornerstone of your family’s wealth management framework.
What is a family office?
In broad terms, a family office is a private company that’s dedicated to supporting a family with the organisation, administration, management, and maintenance of their overall finances.
For the most part, this office will be responsible for the daily administration of your family’s financial assets, facilitating collective decision-making to help you maintain a closer degree of control over how your family’s finances are governed.
What are the benefits of setting up a family office?
Similar to diversifying your own personal financial and asset portfolio, setting up a family office comes with numerous benefits that will enable your family finances to work harder, as well as making for a simpler asset management structure overall:
- Streamlined management – Having your finances managed from a single location allows you to streamline the workflow involved in administering high volumes of wealth, allowing you to focus your precious time elsewhere.
- Bespoke services – Family offices are designed to offer tailor-made solutions to each family’s specific financial requirements, granting you a bespoke service that can better meet the needs of your family’s financial goals.
- Financial alignment – Alongside this bespoke investing package, a family office provides you with one core location to examine your family’s finances in their entirety, directing them towards the avenues best suited for overall growth while still accounting for all family interests involved to keep conflict to a minimum.
- Data confidentiality – Data confidentiality is an important aspect for UHNW families to consider, and setting up a family office is a great way to accommodate this by minimising the number of people who have direct access to your family’s financial information.
- Cost-efficiency – Many UHNW individuals know the extensive costs that can build up when hiring multiple external advisors. But with a family office set up, you’ll have access to a suite of internal experts at a much lower cost.
Important things to know when setting up a family office
Family offices come in a variety of different forms, depending on a family’s financial needs, and can undertake numerous different tasks. However, these family office wealth management services also require access to private information, and will likely see the office becoming involved in personal and sensitive family matters.
Therefore, it’s essential that a family office is underpinned by a strong sense of shared purpose and vision for your family’s wealth. Alongside a desire to develop, maintain, and control any vital financial and investment management expertise that is close to your family.
This means that, before you even begin the physical process of setting up a family office, you and your family will need to agree on the main aims and goals for your family’s finances in the coming years and assess the feasibility of achieving these objectives – only then can you start creating a plan for its governance, oversight, and management.
From here, your core aim should be to define the structure of your new office, what services it will be offering, and how you intend to build it. However, it’s important to remember that establishing a family office involves the delegation of activities concerning the wealth and affairs of your family.
These activities may be specific to family members, or even to people outside your immediate circle who are either hired into it or accessed through the use of institutional service providers – hence the need for careful forethought and planning.
How to start a family office with HSBC
At HSBC Private Bank, we believe there should be no obstacles that prevent a family from maintaining close control over the governance of their family finances and office.
We’ll work with you and your family to establish the strategic goals and objectives for the activities to be undertaken by your family office, allowing us to create a clear mandate and control framework for the delegation of tasks while keeping a close eye on its activities and the results achieved.
We’ll also make sure that the functions of your office fall in line with your long-term vision for the management of your family’s financial assets and affairs. Your office will be run as part of the infrastructure for the management of your family’s wealth, helping to ensure that each area is working towards meeting the financial aims you’ve set out.
Speak with our team today to discuss our family office options, as well as what’s involved in the set-up process, and how to reach the desired financial outcome set out by you and your family.
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