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Life Cycle of the Family Office: Wealth

November 18th, 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.

The wealth stage refers to families who have had one or more shareholder events that lead to a significant increase of cash. Families in the Wealth stage still have a large stake in the business or restricted stock options. These families are typically actively involved in the business ensuring success and driving up the value of shares. Wealth-stage families often hire personal staff in their homes to assist with cooking, cleaning, and travel. Often these family's management systems like structure, systems/processes, third-party team members, and staffing placement have not been thought through at this stage.

Case Study

Our case study focuses on a career couple in their mid-50’s with multiple young adult children. The first Principal is the owner and founder of a highly successful company. The second Principal is an award-winning creator. The couple is looking to build a world-class Single Family Office (SFO) in advance of a multi-billion-dollar liquidity event.

What Seems to be the Issue?

This family has an insatiable appetite for impact and philanthropic ventures with no support. Their small team of personal employees and outsourced vendors/advisors has been put together with minimal infrastructure and no physical office space. Additionally, the brunt of the family management falls to the second Principal who also oversees the employees, vendors, and advisors.

How Were These Problems Solved?

Through our assessment process, EFO met with family members, employees, and advisors to make recommendations. EFO was first contacted to run a CEO search through a word-of-mouth recommendation. After learning about EFO’s additional services, the client contracted EFO as their interim Family Office CEO solution. Using the EFO assessment, our team laid out a 9 month timeline of the families priorities and needs to establish a fully functioning family office while simultaneously hiring their permanent team. A regular cadence of family meetings were held based on EFO’s timeline. Working hand in hand with the Principals and getting real-time feedback as changes were implemented, we were able to determine needs, advise, procure resources and referrals, and recruit for identified roles. These meetings also allowed EFO to effectively transition the work (and management) from the Principals to other resources. EFO provided ongoing resources, created manuals, policies and procedures, and built out a fully functioning family office in under 12 months. Through our search process, EFO helped the couple hire a Director of Investments, Director of Philanthropy, Chief of Staff, CFO, Executive Assistant, Property Manager, and new Accounting, IT, Security, and Law Firms. With the help of EFO, the Principals successfully completed their short-term goals while still having the time and energy to focus on their businesses.

Are you in the Wealth stage and facing similar roadblocks? 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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Life Cycle of the Family Office: Pre-Wealth »