Family offices have been around for generations. Historically, they were associated with Rockefeller, Mellon, or Vanderbilt, families that created generational wealth. They generated their wealth from many different industries. Having created massive wealth, they can invest conservatively. Preservation of capital is the first goal. Beyond that, they focus on the transfer of wealth to the next generation.
Brian DeLucia with Arrivato LLC provides a look from the inside of a family office. His family created its wealth in real estate, and continues to develop multifamily real estate holdings for the family.
Birds of a feather flock together, and so do family offices. There is a club of family offices where families socialize and communicate with each other. They have mutual interest, capital preservation and generational wealth. This common interest aligns their interest, which creates mutual trust in each other. From the trust grows unique opportunities to share and learn from each other.
Each family office is different. Some outsource all of the professional needs. Others handle everything inside, using the family business as a training ground for the next generation to learn the family business to continue the family’s mission.
Some look outside for investment options. If they created their wealth in a particular industry, they may possess a unique skill set that takes generations to learn. This can have tremendous value for investing in similar businesses where others are not experienced nor interested.
Other offices create multiple internal operational companies that allow multiple layers of opportunity to grow for generations. For instance, if a family created its wealth through real estate, they may have a management company, development operation, and together they build additional opportunities for the greater good of the family.
Are you writing a check to charity that is greater than your executive assistants annual salary? If so, it might be time to consider setting up the infrastructure to create a family office.
Traditionally an asset base between $100 to $250 million was considered the point of necessitating the need for a family office facilitate the transfer of wealth to the next generation.
The best way to work with a family office is no different than you would another professional. Build your relationship first. Once you have a relationship and trust is built, you will learn about the interest of the family and if your opportunity is a good fit.
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