{"id":15292,"date":"2024-03-13T14:30:00","date_gmt":"2024-03-13T14:30:00","guid":{"rendered":"https:\/\/iqeq.com\/?p=15292"},"modified":"2024-03-27T08:55:18","modified_gmt":"2024-03-27T08:55:18","slug":"understanding-multi-family-offices-and-their-role-in-wealth-management","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/understanding-multi-family-offices-and-their-role-in-wealth-management\/","title":{"rendered":"Understanding multi-family offices and their role in wealth management"},"content":{"rendered":"
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By Ilias Georgopoulos, Global Head of Private & Institutional Asset Owners, and Alex Dean, Head of Private Wealth<\/em><\/p>\n

Multi-family offices (MFOs) are specialised institutions that provide tailored end to end services to affluent families. They offer the same services as a traditional single family office (SFO), providing a complete outsourced solution for their clients\u2019 financial and investment needs.<\/strong><\/p>\n

As the name suggests, multi-family offices provide wealth-related solutions for multiple families rather than just one, allowing each participating family to benefit from economies of scale. Their ultimate goal is to ensure the efficient and effective management and protection of wealth for the families they serve.<\/p>\n

In this article, we\u2019ll explore the history and evolution of the MFO into its current form as an alternative to private banks. We\u2019ll also unpack the many benefits ultra-high-net-worth (UHNW) families can enjoy from participating in a multi-family office.<\/p>\n

How MFOs have evolved<\/h2>\n

Most family offices begin as SFOs<\/a> but expand over time as families share resources and grow together. The earliest family office, founded by the Rockefellers in 1882, still exists as a global MFO today, providing wealth management services to other families as well.<\/p>\n

Historically, MFOs have transitioned from traditional wealth management practices to more involved experts, providing private asset management and co-investment opportunities. This shift reflects the growing complexity of managing vast wealth in the modern era, particularly as many UHNWIs seek to institutionalise their assets and investment strategies. The shift toward private assets has opened new avenues for co-investment, allowing families to share costs and leverage opportunities they could not access if working alone. Whilst family offices paired back their allocation to private equity (PE) during 2023, the UBS Global Family Report<\/a> found that 41 per cent of family offices planned to increase direct deal allocations over five years.<\/p>\n

The benefits of combined resources don\u2019t end with investment opportunities. According to the 2023 UBS Global Family Office Report<\/a>, smaller family offices are far more likely to fall short of best practices for succession planning and generational wealth transfer, while larger family offices with assets exceeding USD 1 billion are more likely to have a well-established succession plan and governance framework. This explains the increased popularity of MFOs as a way for UHNWs to protect their wealth.<\/p>\n

What services do multi-family offices provide?<\/h2>\n

Unlike traditional wealth management firms, MFOs offer a comprehensive suite of services, ranging from investment advisory, reporting to succession and estate planning.<\/p>\n

These services include:<\/p>\n