The number of single family offices continues to climb as the years go on. What once was an estimated 3,000 – 5,000 in 2011 has now grown to over 7,000 active offices throughout the United States. The popularity of single family offices isn’t a coincidence.
In fact, family offices provide an abundance of benefits with the overall goal of maximizing wealth and creating a legacy. Understanding what is a family office, the benefits, and strategies to increase efficiency are vital components of generating centralized financial support and promoting multi-generational continuity.
What is a Single Family Office?
A single family office looks to manage wealth for high-net-worth individuals through various financial management services. Family offices offer a total solution strategy to handle every investment and management need for an individual. For example, single family office reporting might also include individual tax planning services in conjunction with investment management, budgeting, and charitable donations. The services you receive will vary depending on your situation and includes professionals from different industries, such as lawyers, accountants, financial advisors, and insurance agents.
The goal of a single family office is to protect the wealth through strategic business decisions and long-term planning for continuity. Multi-family offices include various families while a single family office focuses efforts on only one family. The complexity of investment strategies and goals can help determine if a single family office is right for your situation.
What are the Benefits of a Single Family Office?
One of the top benefits of establishing a single family office is having a team dedicated to growing and managing your wealth. Investing money at traditional brokerages can be a good option until your wealth reaches a certain point and it makes more sense to dedicate a team to asset management. Specialized solutions tailored to your wealth goals can help grow your portfolio value past what traditional investments offer.
Single family offices may lead to benefits for generations to come. For example, effective management of your wealth now promotes multi-generational wealth and continuity. Furthermore, single family offices can save money on professional fees and taxes with in-house experts and innovative technology.
How to Increase Efficiency in Single Family Office Reporting
Once you decide that a single family office is the best decision for your wealth, maximizing efficiency should be a top priority. Instead of spending hours completing mundane tasks, your team can focus on what really matters: effectively managing your portfolio. One way to promote efficiency is by using a unified general ledger system that houses every aspect of your portfolio. This can lead to increased transparency, which aids in the decision-making process.
Another strategy to increase efficiency in single family office reporting is to have the capabilities to grow in your current accounting system. This means having the ability to track and report on multiple currencies and asset classes, such as non-marketable and marketable securities. Report features that enable these options can help manage sophisticated ownership structures and properly track capital movements to operate in line with both short-term and long-term goals.
Creating a single family office might be the right solution for your wealth management. Preserving wealth through strategic approaches, cutting-edge technology, and a dedicated team are just a few of the viable strategies that you can implement. With economic uncertainty and changing markets, now might be the right time to take the initiative to manage and protect your wealth.