‘Family office’ is a type of advisory firm that falls under the wealth management section of the finance field. This firm is concerned with serving ‘ultra- high net-worth’ investors who has over US $30 million in financial wealth. Family office devotes to providing its services to a well-to-do individual or family by means of making available various outsourced solutions to financial management and investment advice. Such firms are completely owned and controlled by family members.
Based on the number of family groups the firm provides its services, Family Office is categorised into two types:
Subsections of Family Office, based on the range of services made available to its Ultra- HNWIs, are:
With increasing competition with private banks and other wealth management firms in terms of regulatory, operational and technological upgradations; the Ultra-HNWIs in the U.S. and other developed nations resort to opt for family offices. This is due to the trustworthiness and confidence with regards to management of personal fortune; also less preference is given to private banks in comparison with family offices.
Family Office has a better hold on the accounting aspects of its clients by keeping a track of the expenses that recur frequently. Thus, accounting for a Family Office has more competitive ways of dealing with the client’s account in the sense that it can keep a track of recurring expenses. This facility is further enhanced by designing a financial statement for family office.