The importance of building a family office

Listen to Harry Martin, a Family Business Advisor and Family Office Expert describe the scope and roles of a family office. In a family business, the family office should cover a wide range of issues that are affecting the business, including both performance aspects of the business as well as the work environment. Discussing a wide range of issues consistently, can help ensure the success of the business.

The family office should encompass everything the family is doing – key issues. One – inclusion, bring younger generation people on the family office board. Two – have meetings that are often enough so people feel they are participating. Three – discuss a wide-ranging group of subjects, not just how the investments are doing, but things like values. Does the company care about its people, its employees? Does the family company care about the environment? If you are dealing with a wealthy family or a business family that is used to making the decisions and getting its way, and everybody else does what they want, the person running the family office should be independent enough and feel confident enough to be able to give objective advice. My number one quality for a family office person would be character and self-confidence. Number two it is nice to have skills. It is nice to be a skilled lawyer, a skilled investor, but I put the character and the independence of the person in front of the professional skills. Let us say there is a family office and a set of parents who are not qualified or interested in career planning. The family office can help the younger person. I helped somebody get into a great business school, for example, when parents may not have been able to, ok? So use the resources of the family office. In order to do that, you have got to have somebody running the family office with a capacity to understand career planning. And one of the issues you are going to have with smaller families is how can you attract somebody of sufficient experience, and should you have one of the family members be head of the family office? In many of your cases of these smaller families, they do not have the assets sufficient for a family office. They have enough so that they could have family counsel meetings. The smaller family, let us say there are only five adults, you do not need a family counsel and then a family office. You can have just one. Unless you have one hundred to two hundred million in assets and a lot of complexity and different houses and stuff, you cannot justify a family office.