A family office is a term used to describe the structure through which a wealthy family manages its financial and legal affairs. A family office can provide many services, including investment management, tax planning, estate planning, and philanthropic advising. While setting up a family office may seem like a daunting task, there are some key steps that can make the process much simpler. In this blog post, Tim Enneking outlines how to set up a family office in just a few easy steps. By following these steps, you can ensure that your family’s finances are well-organized and managed in a way that best suits your needs.
Tim Enneking on How To Set Up A Family Office
Step 1: Determine the Purpose of The Family Office
The primary step in setting up a family office is to determine the purpose for which it will be used. This should be discussed with all parties involved and documented clearly in order to provide direction and guidance for using the office down the road. According to Tim Enneking, determining why you want a family office can help you identify what resources might be needed, such as personnel or technology, and how much money needs to be budgeted.
The purpose of a family office may involve helping run day-to-day family affairs, managing investments, keeping track of taxes and estate planning, or some combination thereof. A family may also have philanthropic goals that they would like to coordinate through their family office.
Step 2: Decide Who Will Manage the Family Office
Once the purpose of a family office has been decided, the next step is to decide who will manage the office. Generally, the heads of the family or those in control of major assets make this decision. If a family has multiple generations involved and trusts have been established for younger members, trustees may also be part of this decision-making process.
The management team should include both professional advisors and trusted family members who are knowledgeable about financial matters, investments, taxes, estate planning, and other topics relevant to running a successful family office. The Professional Team should include an attorney, an accountant, and possibly an investment advisor or financial planner.
Step 3: Create an Investment Strategy
Once the management team is in place, the next step is to create an investment strategy. This should be based on the family’s goals and objectives as well as their risk tolerance. The investment strategy should also include a diversification plan that includes different asset classes and strategies, such as stocks, bonds, mutual funds, real estate, private investments, and more. It is important to review this plan regularly to ensure it still meets the family’s needs.
Step 4: Establish Goals and Reporting
The final step in successfully setting up a family office is to establish goals and reporting procedures. This will help ensure that everyone involved has a clear understanding of what needs to be accomplished, the timeline for accomplishing it, and how progress will be tracked. According to Tim Enneking, setting up formal reporting systems can provide transparency to all stakeholders and ensure that everyone is on the same page.
Tim Enneking’s Concluding Thoughts
These steps should help get a family office off to a great start. But remember, setting up a family office is not something that happens overnight, says Tim Enneking. It requires careful planning, dedication, and continual review in order to be successful over the long term. With consistent effort, however, families can create an effective family office that meets their needs now as well as into the future.