Introduction
The family office provides a centralised resource for the provision of wealth management. The key objectives of which are;
To preserve and develop family wealth for future generations and to ensure that the wealth is managed and developed in such away as to minimise taxes on investment and inheritance, whilst having regard to the complexities which arise as a result of the international mobility of individuals and families.
The family office provides an opportunity for a planned transfer of wealth between successive generations and assists with the ability to implement the personal wishes and desires of succeeding generations.
The organised central facility provides an increased degree of privacy for family affairs and a control on the dedicated personal professional services required to handle the family’s general financial affairs and to provide expertise particular to the family’s ongoing business affairs.
The family office also helps to preserve the special family identity and centralised philanthropic work. The Family Office team is headed up by Aidan, please contact him by email at aidan@mph-limited.com
Why create a Family Office
There are many reasons for the creation of a family office, each family member will have their own views as to the services, protections and help which they would expect to be provided from individuals handling their affairs from with in the a family office. Some considerations are provided below;
Sale of a business which generates substantial liquid assets.
Family’s financial assets grow to a level that requires full time professional management.
Time required by family members to manage family personal assets is detracting from the effective running of the family business.
Family members want to separate management of their personal financial assets from those of the business for the purposes of confidentiality.
Family has become multi-generational, expertise involvement of the patriarch/matriarch is no longer available, whilst the next generation is either not willing or capable of taking on the asset management responsibility.
Needs of a growing number of family members, requiring increasingly diverse asset management services, can no longer be effectively met by the family’s existing resources.
Service is key
The way the Family Office service is delivered varies from organisation to organisation. MPH Family Office Limited is involved with delivering bespoke family office services. Very often the services not only involves the management and administration of significant wealth, but also require the management of generational issues. Continuing wealth preservation through the generations needs to centre on family dynamics and not just on investment processes alone.
The key to a successful family office is undivided loyalty. For this reason, MPH offers the additional service of headhunting a suitable employee who, when accepted by the family, will then be taken as a MPH employee. MPH will attend to all personnel issues and at the same time ensure that the employee’s work is subject to the stringent procedures and precedents that safeguard the family’s interest. By having the dedicated family office support manager employed by MPH, the family gains continuity of administration even if the employee is ill or on vacation.
In establishing the family office, the prime issue to address is quality staff, who must be able to cope with the complexities of the role. This requires mature and experienced staff. For this reason MPH centres its operations in the Isle of Man where there is a pool of qualified staff, who have extensive experience of international structures and family office operations.
The final issue of importance for a family is that they need to have an arrangement that avoids any conflict of interest. Particularly conflicts of interest can arise between the ownership structure, of the assets and the various specialist investment managers and advisers. For this purpose MPH are now recommending families to set up a private trust company that is managed for the family by an independent trust company.
Why use MPH
FAMILY OFFICE MANAGEMENT
Trading under the Global Dynamix © trademark, MPH Family Office Ltd provides support and management services to Family Offices worldwide.
Professional advisers with many years of experience generally provide tax and legal advice. However, various service providers, i.e. asset management, real estate and insurance, manage individual segments of the assets. This course of action often carries the danger that many specialists with their own individual professional areas act in isolation on behalf of the client. However, the individual asset managers are not able to make suggestions for the control of the total assets. Our experience has shown that it is quite possible for the effects of actions taken by the individual asset managers can cancel each other out, which only results in costs to the client.
Our experience has also shown that the structure of the client’s assets can change, meanings that they no longer achieve the original goals and targets. How can complex assets be managed while taking into account both professional requirements and the clients best interests.
MPH provide the skills required to manage a Family Office and its assets, typically addressing investment management, asset management, banking, tax and estate planning, insurance, accounting and administrative services for the client. From practical experience of managing family offices, MPH can provide a group of financial professionals, with a range of accounting, banking, administration and manufacturing sectors. We give value to our clients by pulling together all pieces of their financial lives and making it as seamless as possible.
Darren Harris is MPH lead Practitioner in this specialised field, having trained under James Bieneman of Crowe Chizek LLP, Darren will be happy to assist you in getting started. You can contact him directly by email at darren@mph-limited.com