As family businesses surpass major growth milestones, many decide they need help directing the increasingly complex aspects of a flourishing enterprise that may extend well beyond the core business. Often, employees from the family enterprise and key members of the family handle these new tasks along with their day-to-day responsibilities. However, as the demands associated with overseeing new investments and wealth generated outside the family enterprise increase or in the event the enterprise is sold, it is essential that families have the appropriate structures and talent models in place to capture potential opportunities and mitigate risks.
Many family enterprises have spent a significant 家族辦公室 amount of time and energy building their enterprises and growing their wealth. The effort needed to grow and preserve that wealth outside the business requires a similar effort, and a family office can be the mechanism to formalize the future structure for the family.
Family offices are designed to assist wealthy families in a variety of areas, including assistance in managing wealth, implementing tax planning, and educating family members about their wealth in an effort to maintain the family’s legacy across generations. These offices often handle investment management, gift and estate tax planning, routine administration, and charitable giving advice, as well as personalized assistance such as concierge services–with a view toward business continuity.
While each family office serves the unique needs of the founders and their descendants, family offices work to seek preferential investment access, create economies of scale, manage financial and personal risks for the family, unite the family around philanthropic goals, and maintain the privacy of family affairs.
When considering the staffing and management of a family office, one of the typical leadership profiles includes employees of the family enterprise who migrate to a newly formed family office, including C-suite executives who have close ties to the family and have earned the reputation as trusted advisors. While trust is essential when identifying individuals to employ at the family office, it is also important to consider the value that professionals with family office industry experience can bring to the organization. Individuals with industry experience should have a strong understanding of family office operations and processes, office talent requirements, service delivery models, and family communication.
In some cases, a leader with deep experience in investments might be hired to serve in the capacity of chief investment officer, managing finances and creating a team that performs regular analysis of the investment portfolio. Likewise, certain financial responsibilities fall to a chief financial officer, who might have a controller or accountants as direct reports. Some family offices may appoint a chief technology officer to ensure that the family office is prepared for the challenges of automation and digital transformation as well as cyber risk.
Managing the risk environment is another area of increasing responsibility for family offices: A 2022 survey from Deloitte’s fourth biennial National Family Office Forum shows that the vast majority of family offices surveyed have been targeted for cybercrime, with 71% of respondents reporting that malicious actors attempted to fraudulently extract funds from the family office through email or other electronic means during the prior year. Of those respondents, 13% said cybercriminals had made more than 10 attempts to defraud the family office.