The needs of any family are complex, and the needs of the wealthy multigenerational family are greater in number and more substantial than those of an average family. A family office is a unique multidisciplinary entity that is designed to serve the multifaceted and integrated needs of wealthy families. It provides advice, oversight, and consolidated management of all of the family’s financial assets and liabilities, and typically looks after a range of administrative, human capital, property, personal service, and other family-related issues on behalf of the larger family and its members.
Family offices first emerged in the mid-nineteenth century to look after the needs of the extraordinarily and newly wealthy families that emerged from the Industrial Revolution, including the Rockefellers, Pitcairns, Fords, Rothschilds, and Vanderbilts. Typically beginning as offshoots of the family business, over time the family office developed into a professional organization designed to manage the financial and personal affairs of the family.
A few have evolved into private trust companies and multifamily offices (MFOs) established to serve multiple client families, with others fading in significance with the passage of time and the decline of the fortunes they were established to oversee.
While every family is different, there are a number of consistent activities shared across most family offices, with the most important ...