Jose Luis Romanillos, Manager at Sarnia Management Corporation Limited, looks at how wealthy individuals and families can manage and protect their wealth and assets through the Family Office.

How does a successful entrepreneur and businessman manage his affairs when he spends half of his life on an aircraft travelling between meetings in different countries? How does the international family business ensure protection and continuity for the company and its assets? How does the wealthy middle eastern family ensure coherent succession planning and investment management for its extensive family and employee base? How does the high-profile celebrity ensure prudent control and investment of the rapidly-earned income? The answer to all these questions could lie in one single organisation – something that has become widespread around the globe, and which we here at Sarnia also specialise in – "The Family Office".

A Family Office is quite simply an office set up for the centralisation and management of the financial and personal affairs of individuals, families or businesses. There are no formal figures on the subject, but it is estimated that there are well over 9,000 such offices in the USA alone, existing independently or within privately controlled businesses. In Europe, the Family Office is also widespread, with Guernsey and London as financial centres excelling at this service. Not only do Family Offices provide a way of co-ordinating the assets and investment strategy in a coherent manner, they also provide the client with a safety check as he or she knows that the family silver is in the hands of experienced independent professionals. The type of work involved is extremely varied and personal, and can cover a whole array of different activities around the core principles of wealth preservation and enhancement. These areas of activity can include managing household staff, property management, employee payroll, educational investment, family governance, financial investment and philanthropic co-ordination. This incredible diversity of activity ensures that Family Offices are fascinating places to work in, with no two days ever being the same!

Each Family Office is unique and is created as a bespoke structure to suit the individual requirements of the client. Here at Sarnia we are able to offer the right combination of services and advice to enable the creation of a purpose-made Family Office. The following list of benefits that we provide our existing client base are considerable:

  • An integrated oversight of a family's financial matters
  • Pooled purchasing power that provides better servicing and product pricing
  • Dedicated team of professionals who are focused on family objectives in a confidential manner
  • Continuity through the generations on family matters, including Family Trusts and legacy
  • Access to a wide network of intermediaries, advisors, banks and lawyers
  • Education and "supervision" of family members about their roles and responsibilities.

How much do you need to have and how much does it cost? There is no real answer to this question as Family Offices are started for many different reasons, and asset size is not usually a major factor in the decision-making process. In the end, the assets held need to be at least sufficient to service the annual running costs of the office. It should be noted, however, that a family office can save a considerable amount of the time and money which would otherwise have been incurred in purchasing services and investments from external providers. Our clients really appreciate the one-stop shop approach which ensures consistency. Family politics and tensions are also significantly reduced as children are far more likely to accept our reasoned explanation for why certain "essential purchases" are not really so essential, thus avoiding the constant pestering at "The Bank of Mum and Dad."

Having worked in both the big corporate world and in the smaller "boutique" fiduciary operations, I can honestly say that the smaller office lends itself far better to the personal needs of the Family Office. Here at Sarnia we are only ever a phone call away and even our more demanding clients are satisfied with the way we can turn around transactions speedily and efficiently.

As a totally independent company we are not tied to specific banks or institutions and can thus pick and choose among the service providers to tailor the best possible products to service our clients' needs. We also enjoy the benefit of a great team of experienced and highly-regarded directors and administrators – some of whom have been here for many years, providing the continuity of service and knowledge that all clients expect and deserve.

In the final analysis, the Family Office is a personal and human service that clients increasingly want and here at Sarnia we are proud to say that is exactly what we offer. We are a small office, with a very big heart. In the end, it's all about love – yes, it is a family affair!

Originally published in Open House from Lovells, Summer 2012

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.