What exactly is (and isn’t) a family office? We accepted the challenge

The history of family offices has traditionally been a quiet one, but now these wealth management firms have moved to the forefront of the financial world as wealthy families multiply and seek more control over their investments.

As the concept of family offices becomes more widely known, the debate over their exact definition has grown louder. As the adage goes, if you’ve seen one family office, you’ve seen one family office.

Does the term apply just to firms that serve only the most wealthy of the wealthy, offering all the services and wisdom they need? Or should the term evolve to include wealth management firms that accept and embrace clients with smaller asset amounts and offer them, one way or another, an array of solutions?

Canadian Family Offices has dipped its toe into the debate multiple times. In these articles, we have spoken to Canadian family office founders and interviewed other advisors and consultants in an effort to shed some light on various schools of thought.

What is a family office, anyway? We inadvertently stirred the pot

Last year, we at Canadian Family Offices published The List, our roster of 79 firms that identify themselves as multi-family offices in Canada. As we expected, it provoked some interesting debate as to what, exactly, the definition of a family office is in this country.

Indeed, there is no definition that’s widely accepted, so we asked experts to parse the essential components of a multi-family office.

“Where I think the confusion comes from is that firms in the multi-family-office space are frequently structured around the investment or management function,” says Mindy Mayman with Richter Family Office in Montreal. “Few multi-family offices in Canada provide the breadth of services that many single offices provide.” What we have instead is a proliferation of models. Read the story here.

What’s a family office, anyway? Ten Domains to guide them all

What services define a complete multi-family office? Professionals in this growing sector tend to draw the borders differently, but the desire for rigour and clarity is gaining consensus.

In particular, the U.S.-based Ultra High Net Worth Institute has defined the areas that a full family office might be expected to advise on with a formal model called the Ten Domains of Family Wealth. It shows how important it is for family-office professionals to break down the silos that separate disciplines.

The institute presents them in chart form, with each service area ranged around a central point like the petals of a flower or spokes on a wheel. Read the story here.

What’s a family office, anyway? They’re for the very rich only, right?

Is a family office still a family office if it serves clients who are not extremely wealthy? And what should we call a firm that resembles a classic family office but serves families of more modest means?

Elke Rubach is president of Rubach Wealth Holistic Family Advisors. Her company offers a range of services that would typically be offered by a family office to families with net worths of $5 million to $20 million.

“The people we work with have enough complexity that they need a hand,” Rubach says. “Sometimes they need estate planning, tax planning, a bit of both. Sometimes it’s growing the business, sometimes it’s selling the business. Sometimes it’s training the next generation.”

Although she agrees there is a qualitative difference between managing $10 million and managing $100 million, she holds that her clients need professional advice to negotiate the degree of complexity they live with. Read the story here.

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