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What can a family office do for you?

Frances Rimeur explains how family offices take many forms to look after the family’s bespoke wealth needs, often using trust and company structures.
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Published 30 June
3 mins

Economic substance versus family office structures in the Channel Islands Economic substance legislation came into effect across the Channel Islands in January 2019, meaning companies must now demonstrate they meet these rules if relevant.

A family office is bespoke to a family’s needs and can take many forms to look after the family’s wealth, often incorporating trust and company structures within.

 

The purpose is to manage, preserve and grow the family’s wealth for both current and future generations, ensuring the legacy of the family that set up the office, and also providing for the family’s day-to-day running costs.

Typically, this will involve managing the family’s investments, moveable assets (such as art work, vehicles and antiques), commercial and residential properties, as well as administering privately-owned businesses.

 

It can also include day-to-day accounting and coordinating with the relevant professionals to undertake payroll, tax services, legal affairs, investment management and succession planning.

Concierge services are often also provided, which could include managing household staff, settling education fees, making travel arrangements, and even personal shopping services.

 

Family office and concierge services are as unique as the family they support. Their primary goal is to give the luxury of time by removing the hassle of organising day-to-day life.

 

Family offices can be structured in one of three ways:

  • Single-family offices that serve the needs of one family. In general, ultra high net worth individuals (UHNWIs) need to have a very significant net worth before establishing an independent single-family office.
  • Multi-family offices that enable economies of scale by managing the wealth and serving the needs of more than one UHNWI’s family. This is an attractive option for families that do not have the asset base to justify establishing a single-family office.
  • A hybrid structure that allows a family office to perform certain in-house core functions to (1) create a network of external partners (e.g. lawyers, accountants, banks and external asset managers) to provide complementary services; or (2) to outsource particular functions to access their resources, technology and professional talent.

There are many benefits to using the hybrid structure, particularly when it comes to its set up and management.

 

Setting up a single-family office requires a huge investment and level of trust in whomever the family appoints to manage the responsibility, given it is on an ongoing basis.

 

This appointment would also need monitoring and remunerating to ensure its longevity with the family, whereas the hybrid approach, using a regulated service provider in the Channel Islands, removes both the recruitment and selection process of individuals, as well as the remuneration, as they would be appointed by the service provider directly.

Likewise, it is the regulated service provider’s responsibility to ensure the business is adequately resourced (on an ongoing basis) and can manage the workload of its clients, including its hybrid family office arrangements.

 

This provides for a longevity of relationship and peace of mind to families, not least as there is a succession plan in place.

Another clear benefit of using a regulated service provider is the procedures and controls it has in place to mitigate risks when managing assets on behalf of others.

 

With single-family office arrangements, the personnel are not operating in a regulated environment and the focus is much more on delivering what the family wants. The hybrid option also looks to achieve the family’s goals, but within a robust risk management environment, which provides both independent oversight and effective risk management for families.

Nedgroup Trust is able to offer hybrid family office and concierge services tailored to the UHNWI’s family needs by outsourcing certain functions to third-party tax, legal and investment experts, while providing a single primary point of contact to coordinate all aspects of the family’s affairs. A dedicated administrator will be responsible for the day-to-day administration of the family’s affairs, with the supervision and support of a manager and director to ensure the relevant expertise is always available.

 

Should you require any further information, please contact your usual Nedgroup Trust relationship manager who will be happy to discuss how we can help. Or get in touch using the links to the forms towards the end of the 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

Frances Rimeur

Frances Rimeur

Based in Jersey, Frances joined Nedgroup Trust in November 2008 as a trust officer and has progressed to become a trust manager who now manages a team of trust officers. She specialises in high and ultra-high-net-worth private client fiduciary services, typically with a UK connection, whether it be residence, domicile or assets within the fiduciary structure.

 

Frances has 15 years’ experience within the offshore trust industry, almost 12 of which have been with Nedgroup Trust. She is a member of the Society of Trust and Estate Practitioners having attained a Diploma in Trust and Estate Management.

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