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Family Office – The Traditional Model

Typically, financial planning services, asset aalocation, risk management, manager selection, and financial accounting and reporting services tend to be provided in-house. Global custody, alternative investments and private equity, and tax and legal services are often outsourced.

However, families should be aware that the greater the level of outsourcing, the less irect influence the family will have over the decision-making process within the family office, and the less exclusive the products and services will be. Below we provided an overview of selected family office services, which can be categorized as in-house or outsourced based on market analysis.

Type of services Service Category In-house Outsourced
Investment Management and Asset Allocation Financial Planning Basic financial planning and aaset allocation decision should be provided in-house The more complex, specialized and diverse assets make outsourcing a practical option
Tax and Legal Advisory Advisory Selectively done in-house Often outsourced to a trusted adviser to ensure state-of-the-art quality services
Reporting and Record Keeping Governance Record keeping and documentation demand confidentiality and so this should idealy bbe done in-house Basic reporting tools and software may be provided externally
Philanthropic Management Financial Planning In-house expertise should serve to assist with philanthropic activities Setting up a foundation and related activities is often outsourced to a consultancy
Compliance and Regulatory Assistance Advisory A large family office might require full-time legal and accountancy expeertise In general, full-time legal staff will be an unnecessary and costly addition to family offices that are not large enough to require them. Such staff can be outsourced when needed.
Risk Management and Insurance Services Advisory Some risk management skills should be provided in-house, in order to ensure ultimate peace of mind. Can be outsourced as external risk and insurance professionals can offer trusted expert advise
Life Management and Budgeting Financial Planning Should be done in-house if information confidentiality is a primary criterion. Only specialized services would tend to be brought in-house; less specialized services can be outsourced.
Training and Education Strategic Aspects Can be done in-house, as identifying suitable options for education is by its nature an internal process Can be outsourced if expert opinion on higher education is required for training and development
Business Advisory Strategic Aspects Often the general counsel or the finance director of the family busness is involved in the setup of the family office The service of an external expert can offer a competitive edge
Estate and Wealth Transfer Strategic Aspects In-house expertise is required as data confidentiality is vital The family can consult external legal advisers on procedural and legal issues
Administrative Services Governance Administrative services require daily monitoring and so can be done in-house. Here, outsourcing could lead to greater costs

If you have any questions don´t hesitate to contact us directly.


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