Defining which family branches the new office will serve
Built on Chapter 1 of How to Start a Family Office by Richard C. Wilson.
A new family office needs to say which households it serves and what each household can request. A billionaire family may share ownership while maintaining separate finances. If service access remains implied, staff can accept work that the office has neither the resources nor the authority to perform.
The book describes a family office as a full-balance-sheet solution. I would apply that idea by defining the people and assets within the service assignment before expanding the team's obligations. Serving the whole family needs a practical meaning.
Describe service access separately from ownership
Start with the proposed recipients of office services. Identify the households that need routine administrative support and those that only need information about shared investments. Those are different assignments, even when the recipients own interests in the same company.
Keep service access distinct from entitlement to money. An office service policy should not be used to determine ownership rights or benefits under a trust. Have counsel identify the governing obligations and the decisions the family can actually make.
A relative may receive shared investment reports without authorizing the office to manage personal accounts. State that limit so an employee can answer an ordinary request consistently.
Ask each household what it expects
Speak with the relevant household contact about current arrangements. Ask which services already work and which requests regularly fall between advisors. A separate branch may have an accountant it intends to retain.
Do not assume that every household wants the same level of involvement. Some may want document coordination, while others want only the information necessary to work with their own professionals. Record those preferences alongside any mandatory office responsibilities.
Confirm who can instruct the office for each service. A spouse coordinating household paperwork may have a different role from an authorized signer on an investment account. Staff need a verified instruction route for the task at hand.
Put a limit around the first assignment
Define what the office will begin doing at launch. Include the expected frequency and the information the household must provide. If the office agrees to coordinate tax records, explain where its work ends and the outside accountant's work begins.
Identify services that require separate approval. A household cannot expand the office's scope merely by sending more requests to a helpful employee. Provide a route for considering the additional work and its effect on capacity.
The answer may be a separate engagement with an appropriate provider. The office can help coordinate that relationship if authorized, without promising to perform work outside its own competence.
Establish the information boundary
A shared service does not require unrestricted sharing among branches. State which household information is available to office staff and what appears in reports to other relatives.
Use access arrangements suited to the work. The employee assembling a shared investment report may need ownership information without needing a household's personal spending records. Give each person enough information to complete the accepted assignment.
When information is needed from a separate advisor, confirm the household's authorization before requesting it. A family relationship alone does not establish permission to obtain private records.
Different service demands can consume very different amounts of staff time. Make the resource implications visible when the family approves scope. A service described as available to everyone can become difficult to deliver when many households use it simultaneously.
Agree how the office will bring a capacity problem back to the appropriate decision maker. It should be possible to adjust the assignment without turning an employee into the referee of a family disagreement.
Ask the accountants and counsel to address payment and allocation questions. Staff should work from the approved arrangement instead of inventing a charge whenever a request becomes inconvenient.
Confirm the arrangement with the people using it
Provide each household with a plain description of the services it can request and the contact responsible. Include the route for urgent issues and changes in circumstances. Give staff the same operative instructions.
Check actual requests against that description after the office begins. Where requests repeatedly exceed the assignment, bring a scope decision to the family. Repeated exceptions are evidence that the service agreement needs attention.
Questions and answers
Does shared ownership mean identical office services? The office should follow the relevant obligations and approved service arrangements. Household needs can differ substantially.
Who decides whether a new branch can use the office? The authorized decision makers should approve the scope after assessing obligations, confidentiality, and delivery capacity.
Related
This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.