Creating a Family Office

Creating a Family Office: I’ve been thinking a lot lately about the single family office launch process as I work with a couple of wealthy families that are forming their single family offices and advisory boards, and recently was given the mandate to run a single family office for a family that recently sold their business (https://TheMiamiFamilyOffice.com).  I wanted to share a few important items from our family office startup checklist.

• A Family Compass document has been created to ensure that from the beginning, the vision, objectives, goals, values, mission, and history of the family has been documented and incorporated into the investing and operating plans of the single family office.
• An operating plan on how day-to-day activities are carried out within the single family office has been established.  A binder has been created which documents each of the Key Performance Indicators and critical processes to ensure the family office is operating as it should.
• Financial controls are in place to prevent embezzlement, unauthorized investments, and style drift within an investment portfolio.
• A core team has been identified and one individual has been appointed as the single family office CEO and/or CIO to act as the key executive making operational and/or investment decisions.
• Ethics and governance policies have been established to set out expectations for how personnel decisions are made, who can use family assets for personal benefit, how conflicts of interest should be managed, and what ethical obligations each family member is under.
• Legal structures set up properly for real estate holdings, operating businesses, investments, etc.  Legal counsel has reviewed the entities to ensure that if one goes bankrupt or gets sued that it would not take down the entire family empire.
• Independent insurance professionals have been consulted who are not on commission to sell you more insurance to ensure proper coverage.
• Contingency plans for death, disasters, divorces, etc. how adaptations to breaking up the larger family office or changing family goals/values will be dealt with, etc.
• A diverse advisory board and investment committee have been established with policies on how they operate and help oversee governance issues within the single family office.

Family Office Startup Checklist: