Single Family Office
A single family office is a private company which manages the wealth of a single family through investments, trusts, property management, philanthropy and other forms of financial management. A family office usually costs about $1 million to operate and has about $100 million in assets. The family office can provide a wide variety of other services as well. Normally the wealth managed by this type of business has been generated over several generations so part of their responsibility is succession planning.
Traditionally the family office was run by the family itself with help from support staff. In modern times there are three different types. The Class A type is run by an independent company overseen by a trustee or an administrator acting on the family’s behalf. The independent company provides oversight of all assets without oversight and provides reports on all estate activity. The Class B type is usually run by a law firm, accounting firm or a bank. They provide investment advice for a fee and offers them products and services but does not manage or administer the estates illiquid assets. The Class C office is run by the family themselves with help from a few staff members who monitor the estate and report irregularities to a family trustee and provide bookkeeping and mail sorting services. The office is often located in the home of a family member.
The family office is does not have to register under the Investment Advisers Act of 1940 if they met certain criteria.