Picture this. A family spends decades building a thriving business, creating a legacy they hope will last for generations. But over time, the wealth dissipates. Not through lack of effort, but simply because managing it across generations becomes increasingly complex. It’s a common challenge. A 20-year study of over 3,200 wealthy families found 70% of wealth is lost by the second generation, and 90% by the third.
Message From Ken Hargreaves
Hi, I’m Ken Hargreaves, president and founder of WealthGen Advisors. And today, we’re exploring when your family might benefit from a family office.
Understanding Family Offices
Now, a family office isn’t just for the ultra-wealthy. It’s about addressing complexity. Now, while a general rule of thumb suggests families with a net worth of over $100 million should consider one, the need often depends more on the intricacy of the situation than the numbers alone.
Signs a Family Office Might Be Right For You
Now, here are a few signs that a family office might be worth considering. Now, if you’re operating multiple businesses, managing multiple entities can require significant coordination. If you have international investments, global… Financial investments can often bring added tax and regulatory considerations, or if you’re operating cross-state finances, state-by-state differences in tax and legal systems can absolutely complicate planning. And complex real estate portfolios, large or diverse holdings, often require some focused oversight. Also, active private equity investments, sophisticated investment strategies benefit from aligned management and careful analysis. If your financial picture involves several moving parts, a family office can help create cohesion.
Types of Family Offices
Family offices aren’t one-size-fits-all, though, and choosing the right type depends on your family’s specific needs. One of them is a single-family office that’s a full-service, dedicated team exclusively for your family. This is typically best for families with $100 million or more in assets, though costs can range from $1 million to $3 million annually. There’s a multifamily office. That’s a shared resource model that offers cost efficiency while providing many of the same services. Costs generally range from 0.3% to $1 million. to 0.7% of assets, making it a strong option for families with 30 to 100 million assets. There’s also an outsourced family office that’s a flexible, coordinated network of professionals tailored specifically to your needs. This approach is ideal for families just beginning to face greater financial complexity. Each structure serves a totally different purpose, and the right one depends on where your family is in its financial journey.
What a Family Office Provides
Now, what can a family office provide? Well, think of it as your family’s financial coordination hub. They offer services like investment management coordination, ensuring that your investment strategy aligns with your goals across different platforms. Tax planning across jurisdictions, streamlining compliance and optimizing efficiency. Family governance structures, establishing clear processes to support decision-making across generations. And then lifestyle management, overseeing personal financial details from household staff to major purchases. Finally, next generation education, equipping your heirs with the tools to manage and sustain wealth responsibly.
Closing Thoughts
Now, it’s not just about managing assets, it’s about creating a sustainable framework for long-term success. Every family’s financial journey is different, but as financial lives become more complex, having the right support can make all the difference. Now, if you’re curious about whether a family office might be right for you, let’s connect to explore your options and help you navigate what comes next. Thanks for watching.
