By Jennifer Hanson, SVP, Head of Trust and Family Office
The wealthiest families often reach a point at which new successes bring additional complexity to their lives. Their assets are growing in value and type, potentially encompassing securities, real estate, art, yachts, collectibles and more. These assets may be spread across multiple countries, currencies and tax regimes. Such families typically have expanded estate planning needs involving multiple trusts and sophisticated multigenerational asset transfer considerations. Likewise, they may face a substantial array of tax considerations.
Taken together, these complexities require wealthy families to work with multiple specialists, including accountants, tax advisors, investment advisors, trustees and attorneys, to manage their affairs. However, families often outgrow the wealth management systems that have helped them reach this level of success. They may need to make strategic shifts, reorganizing the team of professionals who support their wealth to operate more like a traditional business. For many wealthy families, this shift involves establishing a family office.As head of Clarien Bank’s Trust and Family Office offering, I’ve seen how each wealthy family’s financial circumstances, as well as the range of services they require, are unique. For this reason, there is no one-size-fits-all approach to establishing and operating a family office. Instead, a family office must be structured to meet each family’s precise needs. In addition, it must be managed by someone who can ensure smart, strategic coordination across every part of the family office team. This model allows families to make the most of the opportunities their wealth provides.
What to look for in a family office relationship
A family office must meet each family on their own terms. To do so, a family office provider must understand key elements of your financial needs, including:
- Your entire financial landscape. The family office can benefit from a complete view of your family’s finances, including your assets and investment focus, as well as your priorities for the management of your wealth.
- Your global footprint. With this information, a family office can monitor residency, investment and tax issues to ensure compliance with local regulations, while also taking advantage of each jurisdiction’s efficiencies.
- Your philanthropic goals. Families often have very specific perspectives on their charitable giving, ranging from the specific causes they support to the level of involvement they prefer with the organizations they fund. Some families also have specific goals for engaging younger generations in their philanthropy.
- The service providers you work with now. By taking a comprehensive view of the professional relationships you have now, a family office can help you decide which to continue working with, while also making recommendations for trusted service providers in virtually every specialty a wealthy family might require.
- Intrafamily dynamics. While nearly every affluent family is concerned with the transfer of wealth from one generation to the next, the specific dynamics of each family are as unique as their fingerprints. Sensitive in-law relationships, children with special needs, sibling harmony (or disharmony) and other issues can have a substantial impact on the best course of action in a particular area.
At Clarien Bank, we understand the importance of investing the time to gain a thorough understanding of a family’s circumstances and to develop trusted relationships. We approach this process by asking thoughtful questions, listening carefully and applying individualized advice and solutions that address the family’s precise needs. Ultimately, we aim to acquire an overall view of the family’s complex wealth structure, so we can use our expertise to ensure that all activities are aligned with their values and goals. We can serve as the family’s primary contact for all wealth-related matters, simplifying the chain of communication and streamlining the management of their wealth.
Our support can include:
- Reviewing investments to ensure they are appropriately diversified, while also aligned with the family’s objectives. Where there are gaps or overlaps, we can make recommendations for strategic changes.
- Collaborating with your tax advisor and implementing their recommendations. When families have complex tax issues related to asset location, jurisdiction, charitable giving or other factors, we can partner with tax advisors on customized solutions.
- Overseeing trust planning to support families in reaching their legacy goals. Working in collaboration with a family’s estate attorneys, we can ensure that their estate plan is properly structured to meet their objectives. If desired, we can also engage Clarien’s banking services to support trust distributions.
- Managing complex transitions adeptly. Whether the founder is stepping back from the family business, a key advisor is no longer available or any number of other meaningful changes are taking place, we can ensure stability, risk management and professional oversight, as well as a single point of contact for all relevant parties.
- Continually assessing the depth and breadth of services needed from Clarien Bank’s Trust and Family Office offering. The needs of wealthy families evolve over time; a family that may not be quite ready for a full family office now may benefit from that support at a later date. We stand ready to adjust our service offering in accordance with families’ needs.
Building on this foundation of trust and understanding, family offices can become an integral resource that supports a family’s goals for generations to come.