Forms of the family office
There are two main forms of Family offices - dedicated/single Family office for one family and multifamily office — structure that is working with several families.
Dedicated/single Family office.
Dedicated family office is working with one family. The number of personnel in rare cases can reach tens of people; often it also happens that family office consists of a single employee, the so-called trusted advisor. Dedicated family office is created and paid by thefamily. The difference between such organization and, let's say, a simple financial adviser or notary is that the family office is executing orders of the family on a timely basis (real property purchase abroad, observation of the legal consequences of divorce of one family member ...), while an external consultant is also involved in other issues that are not connected with the family.
Besides, the tasks of the Family office involve prediction of all sorts of problems within the family - the mutual trust between the family and the office plays a critical part here. Dedicated Family offices are typically used by the most wealthy families, whose assets exceed $ 50-100 million.
«Multifamily office».
As the name suggests, the structure of «multifamily office» provides the services for asset management for several families. The advantages of multifamily office are the following - they may afford to employ diversified experts (lawyers, financiers, specialists in business law, legal advisors ...), so there is no need to use third-party advisors. On the other hand, taking into consideration the fact that there several families among the clients (perhaps a few dozen!), it is much more difficult to create a strong partnership, based on absolute trust that is necessary for efficient operation. Typical clients of the multifamily offices — families, who have assets of $ 5-50 million.
Multi-Clients Family Office - MCFO .
Is not created by a single family, but by the external financial advisers for the purpose of providing services for families. Such office belongs to the partners, who created it without share participation of the families, whom these services are provided. Multi-clients office often acts as the manager of the suppliers of financial products and services. To provide other services the third party suppliers of the appropriate services are involved. MCFO can be established by several families without dominance of one family in order to unite efforts and assets, to hire a team of professionals, who can ensure the level of the services of the specialized office (SFO).
Dedicated/single Family office.
Dedicated family office is working with one family. The number of personnel in rare cases can reach tens of people; often it also happens that family office consists of a single employee, the so-called trusted advisor. Dedicated family office is created and paid by thefamily. The difference between such organization and, let's say, a simple financial adviser or notary is that the family office is executing orders of the family on a timely basis (real property purchase abroad, observation of the legal consequences of divorce of one family member ...), while an external consultant is also involved in other issues that are not connected with the family.
Besides, the tasks of the Family office involve prediction of all sorts of problems within the family - the mutual trust between the family and the office plays a critical part here. Dedicated Family offices are typically used by the most wealthy families, whose assets exceed $ 50-100 million.
«Multifamily office».
As the name suggests, the structure of «multifamily office» provides the services for asset management for several families. The advantages of multifamily office are the following - they may afford to employ diversified experts (lawyers, financiers, specialists in business law, legal advisors ...), so there is no need to use third-party advisors. On the other hand, taking into consideration the fact that there several families among the clients (perhaps a few dozen!), it is much more difficult to create a strong partnership, based on absolute trust that is necessary for efficient operation. Typical clients of the multifamily offices — families, who have assets of $ 5-50 million.
Multi-Clients Family Office - MCFO .
Is not created by a single family, but by the external financial advisers for the purpose of providing services for families. Such office belongs to the partners, who created it without share participation of the families, whom these services are provided. Multi-clients office often acts as the manager of the suppliers of financial products and services. To provide other services the third party suppliers of the appropriate services are involved. MCFO can be established by several families without dominance of one family in order to unite efforts and assets, to hire a team of professionals, who can ensure the level of the services of the specialized office (SFO).