When is a Single-Family Office Beneficial?

Ultra-high-net-worth (UHNW) families typically consider establishing their own Single-Family Office (SFO) when they have total investable assets of $100 million or more. Consideration for an SFO is most often driven by a significant liquidity event such as the sale of a family business.

It may be as simple as having a dedicated wealth professional who acts as the intermediary with all of the family’s other service providers, or as complex as employing a team of dedicated professionals for all of the family’s wealth management needs including accountants, lawyers, investment managers, legacy planners, philanthropic experts, etc..

Why Should You Consider a Single-Family Office

An SFO provides a wide variety of services tailored to meet the needs of a specific family and typically has a team of specialists dedicated to the family’s needs.

A family-owned business may require structures for succession planning such as trusts or a foundation for the family assets. An SFO can include specialists, such as lawyers and tax accountants, who can help design and set up these structures.

An SFO can help align the families’ interests with its investments. It can also handle non-financial needs, such as private schooling, travel arrangements, and any other family needs.

The Benefits of Having a Single-Family Office

An SFO can provide a range of benefits that cater to the unique financial needs and goals of families seeking a personalized approach to wealth management. These benefits include:

• Control: An SFO helps UHNW families maintain control of family assets and decision-making processes.
• Financial Planning: An SFO typically provides a high level of financial planning through an interactive approach combining asset management, cash management, and risk management.
• Legacy Planning and Management: After many years of accumulating wealth, UHNW families will have to confront estate planning issues such as taxes on assets on passing, estate laws, and family and business issues. A SFO ensures that the family’s wealth transfer plan is well-coordinated and optimized for its legacy.
• Lifestyle Management: An SFO may also serve as a concierge for the family, handling their personal affairs and appointments and seeing to their lifestyle needs.
• Preserve Privacy: By employing a dedicated team as an SFO, family privacy is maintained.
• Philanthropic Planning: An SFO can help you create and maintain a charitable legacy that can carry on after your passing.

The Drawbacks of a Single-Family Office

The only significant drawback to having an SFO is the cost. It can be extremely expensive, and you need to weigh the costs against what you pay for external providers. This will also depend on how many functions you wish to have your SFO perform exclusively for you.

Once you decide to establish a SFO, the next step is to build a team of professionals which may include some family members. Families must have a defined purpose, vision, and values for themselves, for their family office to be successful.

Have Bloom Work with Your Single Family Office

Bloom Investment Counsel, Inc. is pleased to partner with our client’s family offices. Since 1985 Bloom has provided actively managed customized investment portfolios for its clients including family offices.

Contact us today to see how we can help protect, preserve, and build your wealth at 416–861–9941 or info@bloominvestmentcounsel.com.

This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.