z-kolkiemz-kolkiem

Introduction to family offices

Mary Humphreys discussed how the financial crisis of 2008 shook finance centres worldwide, but it also paved the way for the rise of the family office.
Share on facebook
Share on linkedin
Share on twitter
Share on email
Published 17 February
2 mins

The financial crisis of 2008 undoubtedly shook finance centres worldwide, however interestingly it saw the rise of the family office. Below I look into what a family office is and how they have altered how ultra-high-net-worth individuals (UHNW) manage their assets.


A family office is best considered as a private advisory firm established by UHNW to assume the day-to-day administration and management of the family’s financial affairs. They are run by the appropriate professionals with the expertise and skills in areas such as tax planning, estate planning, and management of investments to be able to facilitate this.


EY have looked into the proliferation of emerging family offices and it is estimated that there were in the region of 10,000 operating worldwide at the end of 2019, a considerable increase from the estimated 1,000 seen in 2008. In the years that followed the financial crisis, many UHNWs were disillusioned by the deficiency of autonomy as to how their assets were being managed. By creating a family office, they could have their wealth managed by a bespoke group of professional advisers who reported directly to them.


We must acknowledge that a family office is more than a personal investment house, with many providing full advisory and concierge services, along with tailoring succession planning so as to negate potential family conflict as wealth passes from one generation to the next.


The appeal of family offices has been driven by other factors such as impact investing and being able to satisfy the UHNW’s social or environmental goals along with estate planning.

While I accept that every family is different, there are common reasons that may give rise to question if a family office would be advantageous:

 

  • To control ownership and management of privately-owned businesses in order to aid the business remaining private for future generations
  • To help administer wealth following a significant liquidity event such as inheritance or the sale of the family business
  • To manage and preserve unique non-liquid assets i.e. art, collectables, real estate
  • Next generation planning to mitigate the incapacity or death of the head of the family.

In the next edition of our newsletter we will look at the themes surrounding family office structures in more detail such as:

 

  • The functions of a family office; succession planning, investment management, philanthropy
  • Why choose to base your family office in the Channel Islands
  • 2nd generation planning; millennials and money
  • Family office and concierge services
  • Economic substance and the impact on family offices.
In the interim, should you require any further information please do not hesitate to contact your usual Nedgroup Trust contact who would be happy to discuss.

Should you require any further information, please do not hesitate to contact your usual Nedgroup Trust relationship manager who would be happy to discuss the topic with you.

 

Or if you wanted to find out more about how Nedgroup Trust, or Nedbank Private Wealth, can help you plan and structure your wealth for your family and for future generations, please get in touch using the links to the forms towards the end of this page.

The structures and wrappers used are provided for illustrative purposes only, and are not to be read as an invitation or inducement to buy a service. This content does not constitute advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

about the author

Mary Humphreys

Mary Humphreys

Mary joined Nedgroup Trust in 2020 as a senior trust manager. She has been in the industry for 16 years, having started her career at KPMG. She has progressed through the ranks from assistant administrator through to senior trust manager, and now runs her own complex portfolio of clients. Mary also publishes a wide variety of articles.

 

She completed her STEP Diploma in 2012 and went on to gain recognition by attaining the STEP Certificate in Foundation Law and the STEP Advanced Certificate in Trust Disputes, both of which she passed with distinctions.

Access more of our insights

Leaving a legacy

Opportunities for South Africans to structure international investments

21 Sep

   |   62 mins

Tracy Muller from the South Africa team explained the opportunities for structuring international assets, while Katie Bonfrer provided example case studies.

Leaving a legacy

Key questions when creating a family office

30 Jun

   |   2 mins

Rajah Abusrewil of Walkers (Guernsey) LLP goes through some of the key questions you should ask yourself and your family when creating a family office.

Leaving a legacy

Why choose the Channel Islands for your family office?

30 Jun

   |   2½ mins

With so many service providers across the globe, what draws a family office to the Channel Islands to set up operations? Mary Humphreys explains.

Leaving a legacy

Selling property interests in a collective investment vehicle

30 Jun

   |   2 mins

A non-UK resident investor who disposes of large property interests in a collective investment vehicle may be subject to UK tax, as LTS TAX explains.

Get in touch

If you are interested in becoming a client, please complete the form via the ‘become a client’ button below. Alternatively, if you are already a client, or if you have a question about how we help clients in particular circumstances, please use the ‘contact us’ button.


We will get back to you as soon as we can during office hours, which are Monday to Friday, 8am to 8pm (UK time), except for UK public holidays.

Become a Client

Thank you for your interest in Nedbank Private Wealth. Please call us on +44 (0)1624 645000 or complete the requested information and one of our team will get back to you soon. We look forward to speaking with you.

* Required fields

Contact Us

Give us a call today on +44 (0)1624 645000 or please complete the requested information and one of our team will get back to you soon. We look forward to speaking with you.

Our office hours are weekdays from 8am to 8pm UK time, except for UK public holidays.

* Required field

Search suggestions