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Family Office -Services offered by Financial Institutions and Criticality

In parallel to the make-or-buy decision, a fundamental choice to be made when setting up a family office is the selection of the financial institution to partner with. Financial institutions offer IT platform solutions and advice of critical importance, even to larger family offices that conduct most activities in-house.

The range of services offered by a financial institution to family offices usually depends on its size, business model and international presence. Smaller institutions often focus on advisory and asset management, while large universal institutions can offer a wider range of services given their international platform and experience with institutional clients.

Most family offices chose one lead institutional partner. In addition to the lead firm, two to three additional institutions may be selected for risk diversification purposes or to meet specific needs. Listed below we provided an assessment of service criticality for fanily offices.

Basic Services
Service Cluster Service Description Criticality
Wealth Planning Comprehensive Financial Advice Comprehensive financial planning and advice on asset management and on current and future liabilities Depends on the setup and needs of the family office
Wealth Management Basic Banking Services Core banking products necessary for day-to-day banking, e.g. current and safekeeping accounts, credit cards, payments Depends on the setup and needs of the family office
Investment and Trading Advisory Proactive advisory to support implementation and investment philosophy, usually covering all asset classes and both strategic as well as opportunistic investment opportunities Advisory services are usually leveraged by the family office to generate investment ideas and obtain second opinions
Discretionary Mandates Asset allocation and portfolio management solutions, from multi-asset class to single class discretionary mandates A critical service provided by financial institutions
Trading and Execution Brokerage/ Trade Execution Access to financial markets and execution of trading orders A critical service provided by investment banking institutions
Lending Real Estate Financing Financing of residential or commercial real estate A critical service provided by institutions with banking capabilities
Securities Based Lending Lending against a diversified portfolio to reinvest or meet external cash needs without selling existing assets A critical service provided by institutions with banking capabilities
Custody and Platforms Online Tools Oline functionalities and platforms that provide access to banking services, e.g. transaction platforms, access to research, and reporting tools A critical service provided by financial institutions

For further information please contact us directly.

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