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A Checklist for Setting Up a Family Office

By Richard Wilson | Tuesday, March 29th, 2016

This article is contributed by Richard Wilson of Hedge Fund Blogger and provides unique advice for setting up a family office entity. 

The topic of how to setup a family office is deep and could cover a full week-long intensive workshop, but for those looking for some of the basics, we have come up with a checklist that will get families pointed in the right direction.  This checklist is based on our work meeting face-to-face with 1,000 family offices now, and currently acting as CEO of a single family office with $500M that we helped a family start earlier this year.

Family Office Startup Checklist.

As you start your family office, ensure the following:

  • 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 are 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 are created for death, disasters, divorces, etc. and 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. 

More Information on Family Offices:

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