A Guide to Using a Family Wealth Office

In today’s world of economic uncertainty, managing your finances can seem like a daunting task. Shifts in the market and inflation are making it harder to make ends meet for millions of people. Heck, even buying eggs has become financially complicated this year.

Being in charge of a business during this time takes a team of people to be successful. Over the course of every entrepreneur’s lifetime, they hire the following: an accountant, an attorney, insurance agents (both personal and business), a banker, an investment adviser, etc. The list goes on. What’s more, finding the right people that you can trust is a job all its own.

As a result, many entrepreneurs may feel as though they’re stuck in the middle facilitating communication between parties. A family office is an interesting solution to this problem, and it’s no longer reserved for the top 1%. You can read about the different areas that can affect family wealth in a variety of finance publications.

Recently, I spoke with Jim Dew, CEO of Dew Wealth Management, about the benefits of a virtual family office for entrepreneurs. I was extremely impressed by how having the right team and structure can yield great financial results. And, it makes sense; The rich get richer because they use specific strategies to grow and protect their wealth. Here’s what entrepreneurs need to understand about utilizing a family office for wealth management:

What is a Family Office?

Billionaires have had a century-long secret advantage when it comes to building and sustaining wealth. It’s called the family office. Before deciding if a family office is right for you, it’s necessary to fully understand what it is. This structure is what virtually everyone in the “billionaire’s club” creates when they get seriously wealthy.

To build a family office, a billionaire will hire all the necessary professionals as full-time employees. Specifically, these new hires will work for that one billionaire and his or her family. Think along the lines of tax, legal, insurance, and investment experts– along with attorneys and accountants. Needless to say, a traditional family office is expensive to build and run.

However, it’s worth it when you’re managing a financial empire. That’s why Bill Gates, Oprah Winfrey, Jeff Bezos, and Sarah Blakely all have a family office. For everyday entrepreneurs, this structure is still beneficial–but likely unreasonable– from a financial perspective. Despite the cost, a modified virtual structure is likely possible to attain.

Connections Every Family Needs

To better understand how a family office operates, we’ll review a few key things. This includes each position typically hired, how they communicate, and how they benefit each other. It’s worth noting that positions and components can be adapted to your business and lifestyle needs. For instance, you may find that you don’t need a full-time CFO, and instead could have a coordinated effort on financial analysis by using an outsourced part-time CFO in cooperation with an accountant and bookkeeper. You might also find an estate attorney who specializes in asset protection structures.


As a business owner, you likely already engage with at least one trusted accountant. If not, it would be wise to consider doing so. This trusted accountant is a tax expert who keeps track of your bookkeeping–or works with your bookkeeper– to make sure you stay in the black. For example, they might audit your books, prepare payroll tax reports, or simplify all the financial rigmarole and minutia that come with running a business. When establishing a family wealth office, it’s important to have an accountant who can communicate your financial standings and work in your interest to reach financial goals.

Investment Advisers

Investing is a valuable way to grow your wealth. So, it’s a good idea to utilize investment advisers who will be able to work with you and your accountants and ensure that you’ll see positive returns. A family office may be responsible for investment portfolio management, private equity deals, hedge fund investments, and/or venture capital investments. If you’re interested in commercial real estate, they may also handle real estate purchases, sales, and property management. Like everyone else on your team, these professionals are available to help grow and protect your wealth.

Tax Planners

Many accountants are tax historians rather than tax planners. For instance, a tax historian might all the correct forms at the right time, but is looking in the rear view mirror. What you need in your family office is a tax planner. A tax planner proactively looks forward and presents you with ideas on how you can legally save the most possible money in taxes.

This tax expert could potentially be your accountant–or they could be an expert that works with your accountant– that can ideate strategies to help you pay the least amount of taxes legally possible. No matter the case, they are able to help when it comes to tax matters. For example, they might even find tax savings that you can receive by amending past returns. It’s like finding that $20 bill in your pants pocket that you didn’t know you had! Above all, professional tax consultants should prioritize knowing the tricks of the trade and staying current with changing state and federal tax laws.

Insurance Experts

Everyone needs insurance to protect their belongings. But, as you grow your wealth, this becomes even more important. Insurance transfers risk, therefore it is the key to a defensive financial strategy. Additionally, there are tricks of the trade that insurance experts know, which can benefit you and your family in the long run.

Insurance is your first line of defense when it comes to asset protection. Making sure that you have the right coverage and that trusts or entities are listed as additional insureds are some of the details that entrepreneurs often miss. Moreover, entrepreneurs need business insurance like EPLI (employee practices liability insurance) and cybersecurity (for things like ransom attacks). Having good experts for personal and business coverage are absolutely essential in a family office structure.


Another aspect of protecting your wealth is to avoid lawsuits that could take it away. Having an attorney on your side means having someone to advise and represent you or your family. Whether it be in court, before government agencies, or in private legal matters, they’re able to act on your–or your family’s– behalf. They can interpret laws, rulings, and regulations for individuals and businesses, which becomes more important as your wealth grows.

It’s also crucial to have a trusted attorney who’s able to help with estate planning. Every business owner needs to have an estate plan, because death is inevitable. If you don’t have an estate plan already, it is highly recommended to prioritize having one. While many people understand that an estate plan allows you to name the people or organizations you want to receive your belongings after you die, it’s much more than that.

You should also factor in things like instructions for your care and financial affairs if you become incapacitated. Essentially, this means designating a power of attorney and funding assets into a living trust. You’ll want to update beneficiary designations and name a guardian for your minor children’s care and inheritance. While it’s important to think of your family and your own well being during estate planning, a major asset that needs consideration is your business.

Considerations you would need to make for your business would include deciding whether you’ll want to transfer or sell. Regardless, both of those options include paperwork. The articles of incorporation and operating agreement of your business can work collaboratively with your estate documents to help smoothen out this process.

It’s important to note that estate planning is an ongoing strategy, not a one-time event. You should review and update your plan as your family, financial circumstances, and laws change throughout your lifetime. That’s just one of many reasons why having an attorney on your team will help you, your loved ones, and your business.

The Benefits of a Family Office

If you are the type of person who believes you can do it all — let’s be honest, most entrepreneurs are — it may be difficult to relinquish control and let someone else take the reins. It might even be hard to let other people give you advice. But, in the long run it benefits you in so many ways. You’re able to save time, which you can then reprioritize in order to work on your business or spend time with your family.

A family wealth office allows you to spend time on the things that matter most to you. It’s a centralized resource that you don’t have to manage. Consequently, since you don’t need to juggle everything, nothing slips through the cracks. Experts, because of their passions and industry knowledge, are able to spot the things you don’t see.

How to Create Your Own Virtual Family Office

One of the most difficult issues with having multiple advisers and consultants is navigating the collective team management. Typically, they aren’t communicating or collaborating with each other on a regular basis to achieve the best outcome for the entrepreneur.

This means you’re responsible for the whole infrastructure, which takes precious time away from your other responsibilities. To make matters worse, you likely don’t speak the languages of tax, law, insurance, or investments. With a virtual family office, that responsibility is offloaded onto a wealth planning firm.

The first step in building a family office is to evaluate your current team of advisers. You might have to manage this by yourself until you are in a stable and successful financial state to hand this off to the right wealth planning firm. Typically, your current advisers are not all “A” players. You’ll want to keep your top performers and replace the advisers who are not achieving the necessary results. The appropriate wealth planning firm will have the required expertise to oversee and communicate with your advisers and start managing the moving pieces.

The Bottom Line

As Jim Dew said, “Billionaires want a team that only works for their best interest and so should you.” When it comes to a family office, you want a team of people that can protect, manage, and grow your wealth. In the long run, family offices can save you time and help you live the life you want. By combining asset, cash, risk, and lifestyle management with financial planning, family offices help clients navigate the complex world of wealth management. As an entrepreneur, using a family wealth office is a smart strategy to prepare for the future and your legacy.

The post A Guide to Using a Family Wealth Office appeared first on Due.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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