While Creative Planning doesn’t operate as a family office, this article is meant to provide educational information to help ultra‑high‑net‑worth families understand the range of available family office structures and services.
Key Takeaways
- Family office services support the unique complexities of ultra-high-net-worth families, providing a comprehensive solution to managing their financial needs.
- In addition to services provided to non-UHNW clients, a family office approach typically includes dedicated staff who manage the family’s finances, as well as multigenerational wealth transfer goals, concierge services, bill pay and wealth education for future generations of family and business leaders.
- An experienced wealth manager can help you determine whether your family would benefit from the enhanced services of a family office-style approach.
This comprehensive guide is designed to help high-net-worth and ultra-high-net-worth families understand how family office services can simplify their financial lives and help preserve family wealth across generations.
What Are Family Office Services?
Family office services are specifically designed to support the unique needs of ultra-high-net-worth (UHNW) families. A family office team serves as a hub to manage the intricate financial needs of an affluent family, coordinating wealth management, tax planning, estate planning and legacy planning under one roof, with dedicated staff focused on supporting all aspects of the family’s wealth.
A family office approach supports:
- The complex investment and financial needs of UHNW families
- The coordination of business, charitable and personal financial needs
- A family’s multigenerational wealth transfer goals
The goal of establishing family office services is to help ensure financial management efficiencies while maintaining high levels of support across key financial disciplines. Rather than coordinating between multiple firms and advisors, wealthy families can benefit from seamless communication and aligned strategies across their financial needs.
Family office-style support starts with many of the same services provided to non-UHNW clients but with a focus on the additional complexity that significant wealth brings. Additional services not typically offered to non-UHNW clients can include bill pay, advanced legal work for multigenerational wealth transfer, and wealth education for future generations of family and business leaders.
Key benefits of a family office-style approach include:
- Access to a dedicated team of wealth professionals with experience navigating the unique and complex needs of UHNW families
- Potential cost efficiencies compared with managing a team of disparate advisors
- Custom wealth and legacy protection strategies
- A team focused on understanding your family, vision, values, goals, challenges and complexities
Key Family Office Services
Now that we’ve established what a family office-style approach is, let’s consider the specific services typically supported by a family office.
Goal-driven planning and investment management
One of the main benefits of a family office-style approach is that it provides you with the support of a dedicated team with the time and resources to focus on developing strategies specifically designed to navigate the complex challenges you face as an affluent family.
Multigenerational wealth planning strategies
A family office team develops comprehensive wealth planning strategies to help support a smooth transfer of wealth from one generation to the next. These strategies often include optimizing inheritances and lifetime gifting strategies in an effort to mitigate tax liabilities and support your broader estate planning goals.
Family governance and education
It’s essential that UHNW families implement a robust family governance and education structure to help ensure future generations are prepared to manage the family’s financial and business affairs. By incorporating your family’s values, charitable giving goals and broader philanthropic endeavors into the wealth management process, you can establish a legacy that’s sustainable across multiple generations.
Accounting and bill pay
Another service enhancement offered in a family office context is accounting and bill pay support. At Creative Planning, our experienced advisors and CPAs work together to help ensure your cash flow and other financial management needs are optimized and running smoothly, in coordination with your other trusted advisors.
Business liquidity and exit planning
If you’re like many business owners, you’ve spent a majority of your life working to build your company. As you near retirement, or consider a merger or acquisition, it’s important to develop a thoughtful exit plan. A family office advisory team can help assess your options, work to maximize the value of your company, and develop a custom business exit strategy that supports your long-term financial goals and personal legacy.
A Family Office-Style Approach to Wealth and Investment Management
A family office-style approach to wealth management and investments incorporates the various aspects of a family’s financial life into a comprehensive strategy that combines professional expertise with a deep understanding of the family’s goals, values, long-term vision and unique dynamics. The focus is on long-term wealth preservation as well as growth so that your family’s strategy can evolve as your needs change.
Multigenerational wealth-building potential
Family office-style structures prioritize preserving and growing family wealth across multiple generations. With a focus on maintaining the family’s wealth in perpetuity, this approach takes a long-term view of compounding growth and positioning the family’s investments to weather short-term market volatility.
Values alignment
A core objective of family office-style wealth management is to align a family’s values with its investments. The focus and expertise of a family office-style team help ensure your family’s specific needs, risk tolerance and values drive each investment decision.
Flexibility
The focus of a dedicated team provides the flexibility to quickly capitalize on investment opportunities and dynamically adjust your strategies as market changes arise.
Risk management
A family office-style approach integrates risk management strategies tailored for high-net-worth individuals (HNWIs) to address specific risks your family may face, such as concentration risk, currency risk, geographic risk, inflation risk and operating-business risk.
Key Elements of a Family Office-Style Investment Approach
A family office-style approach to investment management typically includes the following key elements.
Private investments
Private investment opportunities exist across private equity, private credit, real estate, infrastructure and more, giving your family access to opportunities beyond traditional public markets. These investments have the potential to offer enhanced returns, greater flexibility and added diversification. They can also help buffer portfolio volatility, as they’re typically less correlated to overall market movement than public investments.
Alternative investments
Your family’s portfolio may benefit from an allocation to alternative investments, such as commodities or real estate, which can provide diversification beyond traditional stocks and bonds.
Direct and co-investments
Many families using a family office-style approach seek opportunities to invest directly in private businesses, either on their own or by joining with other investors in private deals.
Liquidity management
Family office-style teams carefully manage the investment portfolio’s liquidity to help ensure adequate capital is available for capital calls, charitable giving opportunities and unexpected expenses, reducing the need to sell assets at inopportune times.
Governance, Family Dynamics and Preparing Future Generations
Strong family governance is critical for supporting the long-term viability of a family’s wealth, as it establishes a structured framework within which to work, guides decision-making and helps support smooth leadership and wealth transitions across multiple generations. Strong governance practices help foster transparency, establish expectations and prepare future generations for leadership roles.
Key components of a family governance structure can include:
- Family assembly – A formal gathering of multiple generations of family members to share information and family values
- Family council – A smaller group of family members who have been elected to serve in leadership roles
- Family education committee – A group of family members tasked with educating future generations
The importance of succession planning for families
Succession planning is essential for supporting the long-term continuity of family wealth, as it can help mitigate risks, improve family dynamics and prepare the next generation of family and business leaders. Effective succession planning and family governance also help preserve family wealth and values as assets move to future generations.
Key objectives include:
- Supporting the smooth transition of leadership and operational functions
- Identifying, educating and preparing future generations of family and business leaders
- Establishing contingency plans to help navigate unexpected disruptions and unforeseen circumstances
- Formalizing clear roles, distinct responsibilities and a transparent decision-making process to address potential disagreements among family members
- Implementing formal wealth management, tax planning and estate planning strategies that can help preserve the family’s wealth for future generations
The Role of Technology and Data in Modern Family Office-Style Approaches
Having the right technology solutions and data management processes in place can enhance your family’s operational efficiencies, risk management, reporting and investment decision-making. Integrating tools such as automation, data aggregation and artificial intelligence (AI) allows your family to simplify complex financial information and view more timely data, which can empower you with relevant insights to drive your decision-making.
Key roles of data in a family office-style approach to wealth management include the following.
Operational efficiencies
Technology can automate tasks such as reconciliation, which reduces the potential for errors and frees teams to focus on higher-level tasks.
Investment data aggregation
Data aggregation tools pull together information from diverse investment holdings to provide a more complete view into performance analytics. This information can be used to stress test various investment scenarios and identify opportunities and risks across the entire investment portfolio.
Enhanced risk management
Technology can be used to identify risk exposure, allowing your team to address potential risks before they become an issue.
Improved reporting
Reporting tools can deliver consolidated, audit-ready reports and modeling capabilities, providing a clearer view into your family’s financial progress.
Cybersecurity protection
A thoughtful technology stack is a core best practice vital to helping protect your family’s sensitive financial information.
Is a Family Office-Style Approach Right for Your Family?
A family office-style approach is most beneficial for families with significant wealth and complex financial challenges, as this approach supports the family with a coordinated team of professionals to help navigate financial, tax planning, investment and legacy strategies.
Your family may benefit from family office services in the following circumstances:
- You have significant assets and complex investments
- Your family has multigenerational wealth transfer goals
- You face complex family dynamics that would benefit from a formalized approach to governance
- You require coordinated oversight across multiple domains
- You face operational challenges, such as business ownership or multiple real estate holdings
- You anticipate a large liquidity event (such as a business sale or an inheritance)
Next Steps: Exploring Family Office Services With Creative Planning
At Creative Planning, we understand that building a lasting family legacy is about more than growing your wealth — it’s about protecting what you’ve worked so hard to create.
Our family office-style advisory approach addresses complex tax situations, multi-jurisdictional holdings and sophisticated risk management needs that ultra-affluent individuals and families face. We work with more than 2,200 UHNW households, providing clients with custom investment and portfolio management alongside comprehensive legacy planning, tax planning, insurance planning and estate planning strategies. Our experienced advisors and in-house specialists deliver institutional-quality service to help relieve your financial burden and position your wealth to support future generations of family and business leaders.
