Family Office ServicesMany people think of a family office as something only for the ultra-wealthy. While that was once the case, today individuals and families of more moderate means are discovering the benefits of a family office to help them manage cash flow, minimize stress, and wisely steward their resources. Could this strategy help your family? The answer might surprise you.

The needs of work and family create competing demands for both time and financial resources. It’s hard to keep track of bills, giving, and personal needs while juggling jobs and family time. That balancing act is especially difficult when families are caring for members who are elderly, disabled, or unable to wisely manage resources. Many households don’t even know what their cash flow situation actually is, or where income is going. In addition, family relationships can suffer as a result of conflict and resentment surrounding financial behavior.

Family office services can provide an ideal solution. In the past, a family office generally served a single family and therefore represented a prohibitive cost for all but the most well-to-do. But with the emergence of firms that serve multiple families in this capacity, the cost of having a family office is within reach of a large number of relatively high earners. The price a family pays will reflect the number and extent of services they decide to use.

For families and individuals with moderate to high income, family office services offer myriad benefits:

  • Flexibility. A family office can include a wide range of services, from limited assistance with bill paying to comprehensive financial management. Depending on the family’s specific needs, a family office might provide or coordinate services that include:
    • Account reconciliation.
    • Bill payment.
    • Record-keeping.
    • Monthly budgeting.
    • Household staff payroll.
    • Rental property accounting services.
    • Philanthropic giving planning.
    • Tax strategy.
    • Estate and trust planning.
    • Wealth transfer planning.
    • Financial education planning.
  • Accountability. A family office makes it easy to track income and expenses, establish a realistic budget, ensure bills are paid on time, record transactions, reconcile bank and credit card statements, and create financial statements — relieving busy family members of the ongoing burden and time investment required to handle these tasks personally.
  • Visibility. With a family office, clients can see monthly cash flow reports and view historical income and spending analysis. Caring for elderly parents or loved ones with limited financial capability becomes more manageable, especially when family members live in multiple households or distant locations. The increased visibility into spending also allows for more accurate budgeting to meet future needs.
  • Security. A family office reduces the risk of financial mismanagement by making it easier to identify unusual or potentially fraudulent activity, whether from external threats or unwise behavior by a family member. Criminal acts, emerging dementia, addiction issues, and other concerns that could have financial ramifications for the entire family tend to show up quickly in the well-organized and monitored environment of a family office.
  • Peace. Tricky issues like excessive spending or loans to family members are less prone to conflict when they go through a family office. Eliminating the face-to-face interaction around financial situations helps to limit the emotional component of potentially difficult discussions. Handling financial matters through a family office can even reduce the chances of one family member taking advantage of another’s kindness or vulnerability.
  • Financial ability. In addition to helping arrange and execute wealth transfer to the next generation, a family office can be valuable in teaching heirs how to wisely manage their newly acquired inheritance.

Every family is different, but if yours has even moderate means, there’s a good chance a family office can help you stay on top of your financial concerns. To learn more about family office services and find out if they’re right for your family, please contact the financial professionals at CRI.