Why Investors Choose a Family Office
Richard C. Wilson answers audience questions while explaining family office structures and choices.
In this video: Richard C. Wilson (Presenter)
What they said
- Virtual, single, and multifamily office models. Richard describes a virtual family office as a lean operation that outsources almost everything. He says a single family office can have a couple of employees or 100 plus, while a multi-family office serves multiple families. (at 0:34)
- Single family office investment focus. Richard says a single family office can dedicate its team to one acquisition focus, such as dry cleaners. Public market wealth management can be outsourced separately. (at 2:01)
- Fee negotiations after an exit. Richard says investors can ask to reset fees when an exit changes their account size. In his example, he suggests asking for 25 basis points after being charged 85 basis points, with three quotes from other providers. (at 5:10)
- Staffing levels and operating needs. Richard says many single family offices hire one full-time professional for every 30 to 50 million in AUM. He says the need can vary greatly depending on the family's business and outsourced assets. (at 6:04)
- Family priorities in office design. Richard says a family can use what it stands for and wants to accomplish to shape its office. He gives examples that include health, travel, and time with extended family. (at 2:27)
In their words
"If you figure out what your family stands for and what you're trying to do and what you're trying to get done"
Why it matters if you are building or preserving great wealth
Richard frames the choice through a $200 million customer at Bank of America. The bank designs within its own structure, while a family office can start with the family's strengths and aims.
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Anu Aga: Focus on one main cause. Her family found its giving more satisfying and impactful once it chose primary education for the underprivileged in India.
- Binod K. Chaudhary: Never chase a deal out of desperation. Stay cool and look at every part of the deal. Have your advisers and your finance team review it critically. Your counsel should review it too.
- Larry Connor: Learn from every mistake. Larry's team owns its failures and makes no excuses. They learn, change quickly, and keep getting better.
See the data
Frequently asked questions
Do multi-family offices usually begin as single family offices?
Richard estimates that 15 to 20% started as single family offices, often after friends or colleagues asked them to manage money. He says most began in wealth management or were formed by CPAs, trust and estate advisers, or tax attorneys.
What might a family still use banks for?
Richard says families may use banks for use debt, currency exchange, hedging deals, and international transactions. He says even very wealthy families use banks and multi-family offices for some parts of their work.
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.