Top 5 Mistakes in Starting a Family Office
Richard C. Wilson is in Berlin, Germany, to meet with a family office and speak at a local investment event.
Richard C. Wilson discusses five startup mistakes, drawing on his experience with Family Offices Group and a recent conversation with a family office. He covers setup timing, investment readiness, office models, outside help, and advisory boards.
In this video: Richard C. Wilson (Family Offices Group)
What they said
- Richard on setup timing. Richard says families may try to set everything up within two or three months. He recommends starting research early and handling time sensitive tax issues promptly, while taking more time to build the formal structure. (at 0:29)
- Richard on direct investments. Richard says an office should be ready to assess real estate and direct investments in private companies. Some opportunities are available for only a week or two, so he recommends having someone to consult when they arise. (at 1:25)
- Richard on office models. Richard describes a family planning to hire a full time CIO, CEO, and board without having considered a virtual family office, an outsourced CIO, or regional multifamily offices. He recommends interviewing experts and comparing costs with access to talent. (at 2:44)
- Richard on setup help. Richard says families can hire someone for a quarter or for the office's first year to help with setup. He describes these people as experienced in the process and connected in the industry. (at 3:40)
- Richard on advisory boards. Richard says some offices rely on a loose network of service providers without an official advisory board. He says two or three experienced members can bring outside expertise into investment decisions without full time salaries. (at 4:36)
In their words
"there's no extra prize by spending the extra time and doing that extra hard work"
Why it matters if you are building or preserving great wealth
Richard's example of a family considering a full time CIO, CEO, and board points to a concrete tradeoff: compare the cost of those roles with the talent an outsourced CIO or virtual office could provide.
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
What meeting schedules does Richard mention?
He says an advisory board might meet once in person and quarterly by phone, or quarterly in person and monthly by phone. An investment committee might meet every two weeks, monthly, or quarterly.
Which areas of experience does Richard list for advisers?
He names taxation, insurance, real estate, direct investments in private corporations, and alternative investments.
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.