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Family Office – Finding the Lead Financial Institution

Given the crucial role played by the institutional partner, the selection process must be conducted very carefully on the basis of pre-defined criteria, and with the involvement of the family. The family office typically seeks contact with various providers and sends a “Request For Proposal”  to assess the firm’s services and expertise. Key criteria include:

Services and Solutions

The lead institutional partner should be able to provide all the key services needed by the family office as a single source.


The lead financial institution often serves as a sparring partner and adviser to the family office. Choosing an experienced institutional partner, ideally with dedicated SFO experts, is therefore essential, and can have a considerable impact on the family office’s performance and service to the family.
IT Platform

Most critical services provided by financial institutions to family offices are IT-related. The ability to provide global banking platforms, highly sophisticated execution solutions, and real-time reporting in a cost-efficient way are critical selection criteria when identifying the lead institutional partner. It is particularly important to select a firm offering broad and deep reporting capabilities across all assets, including those held by different custodians.

Capitalization and Reputation

In the aftermath of the subprime financial crisis, clients have become increasingly sensitive to the capitalization and risk profile of financial institutions. Providers with a strong capital base and consistent financial performance are to be preferred when selecting a custodian for the family’s assets. An additional key concern for wealthy families is confidentiality, as any information leakage could lead to undesired press coverage and reputational damage.

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