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Life Cycle of the Family Office: Unmanageability

December 12th, 2022 by admin

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Starting a Family Office is still an area unknown to most. In this Blog series, we will break down our Life Cycle of the Family Office with case studies covering real-life examples of each stage of the life cycle.

Families in the Unmanageability stage spend evenings managing personal staff; schedules, assignments, feedback. These families have trouble responding to or paying vendors due to the volume of communications they have to handle. Their information is scattered across multiple platforms and mediums causing them to lose time as they constantly search for documents and plans. The family's attorneys, investment managers, accountants, and staff are looking to the Principals as the first point of contact, which begins to feel like a job in and of itself.

Case Study

We will be taking a look at a San Francisco Family valued at $7 Billion+ with an established Family Office serving G-1 thru G-4. The family's trusts are individualized and their shared services are provided through an LP and LLC’s. All three generations of the family actively participate in the Family Office services that include estate and tax planning, investment management, property management, staff employment (payroll/HR), aviation, and concierge services.

What Seems to be the Issue?

This family Initially contacted EFO to recruit a Director of HR and determined EFO could support in other capacities. They had an extremely limited structure at the property level. Their staff often “pitched in” on items outside their purview (i.e. Accountants calling landscapers, CEO’s EA checking property for pests.) The family wanted to transition the current property manager overseeing a shared family ranch into a managerial focused role

How Were These Problems Solved?

EFO performed an audit and assessment of the current property staff and the employees within the Single Family Office LLC who manage accounting, insurance, purchases, sales, and construction contracts. EFO suggested formalizing and building a culture for the Employment LLC by hiring a VP of Property Management to head up this entity. EFO created a sustainable staffing structure with current job descriptions and redundancies as needed with a Director of Residences for each family head. In addition to staffing needs, they were deficient in IT and security. EFO provided them with a plan and the resources to perform both a network security audit and a physical security audit. This audit provided the information necessary to build out a network for these employees to work within and provide them with company-owned hardware and phones. EFO helped this family successfully complete their Family Office goals while allowing time for them to focus on other important aspects of their lives.

Can you relate to this story? We’d love to hear your experience and how you managed the process. Do you believe there was an aspect we missed in our assessment or solution? If so, please share your comments or observations. We welcome your insights.

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Posted in: Lifecycle of the Family Office

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