Jersey: The Life-Cycle Of A Family Office

With over a decade of experience in managing both single family and multi family offices, and having worked with first, second, third and even seventh generation family members, we understand that the particular and specific needs of families and their circumstances tend to dictate the complexity and shape of the family office.

The concept of a product having a life-cycle was theorised in the mid-1960s by Raymond Vernon and has since passed into standard economic theory as one of the bedrocks of modern marketing. Our observation is that the family office also tends to follow a particular life-cycle and this can be developed into a useful tool to assist private wealth practitioners understand how they can relate to, and complement, the services that a family office offers.

The wealthy family life-cycle —the stages

Stage 1 —The entrepreneurial business family

One or more members of the family have created a business which is still majority owned by the founders. The vast majority of the family's wealth is still tied up in the business and there is little liquid wealth. The founders spend most of their time working in the business to increase its value.

Stage 2 —The wealthy business family

There have been one or more shareholder events creating liquid wealth for the family —this could be dividends from profits or a sale of a shareholding. The family still have a large stake in the business and the founders continue to spend a great deal of time working in that business.

Stage 3 —The diversified wealthy family

The family are no longer the majority shareholder and driving force behind the business. The family's assets are in a variety of different assets and the head of the family usually sets the strategic investment plan. Often there will be new privately owned businesses in the portfolio of investments as this type of investment was the original source of the family's wealth. The head of the family may therefore see him or herself as a serial entrepreneur with a diversified wealth base.

Stage 4 —Pre-transition of wealth

The head of the family is less active and seeks to enjoy the fruit of their labours as they become older. Wealth preservation is in the forefront of the mind of the founders and thoughts also turn to how this will be effectively transitioned to the next generation.

Stage 5 —Post-transition of wealth

Generation 2 are now in possession of the wealth. They either decide to continue to invest their wealth together, as a family, or they decide to go their separate ways.

Stage 6 —Multi-generational family

If the family continue to invest their wealth communally they become amulti-generational wealthy family. At any point the different branches of the family can choose to go their separate ways.

These stages of a wealthy family life-cycle are usually not of equal duration —and sometimes may be skipped altogether. An example of this might be a very active family head who continues to actively invest the family's wealth until death, thereby skipping Stage 4 altogether. Alternatively, the founder of the family business may decide to donate most of the family wealth to charity, thereby rendering Stages 5 and 6 irrelevant!

Relationship between family life-cycle and family office life-cycle

The table above summarise the effect that a specific stage of the family life-cycle will have on the related family office life-cycle.

When the family are in stage 1 they are very unlikely to need a family office —they will instead rely heavily on external advisers such as lawyers and accountants and most of the advice will be surrounding active management of the increase in value of the business and business risk management. If they do have some personal financial issues that need to be examined urgently, the business's finance director may sometimes supply these services.

However, as they move through stages 2 and 3 the need for a dedicated team becomes more pressing, especially if the level of wealth created is very substantial and the family's financial circumstances are complex. The annual costs of the external lawyers and accountants can become high. In these stages the family office can interact with the external advisers to co-ordinate and control the many complex issues facing the family, for which the family members themselves o8en have insufficient time or skills to deal with, and reduce the overall cost burden by minimising external fee levels.

If the founder chooses to move to stage 4 then the role of the family office changes to deal with inter-generational wealth transition issues. Once these issues are largely resolved, and if the founder continues to become less active, the family may decide to revert to using third party accountants, lawyers and investment managers. If the family has had a single family office then they may decide to transition to a multi family office, which can also reduce cost. This decision may be heavily influenced by whether the second generation intend to continue investing together. If they do, continuity of a family office may be desirable to ensure smooth wealth transition and continuity of investment strategy. If this family office endures into the third generation and beyond it may even become a business is its own right that happens to be under private family ownership.

Pictorially this can be demonstrated in the chart below, which shows the level of reliance on the family office that the family will have in each stage.

Role of the Family Office

Impact on private wealth professionals

Trustees, accountants, lawyers and investment managers may therefore act as advisers to families who go on to have family offices as their needs become more complex. They may also be successors to family offices in situations where the family has become less active and therefore no longer needs dedicated staff. Most important to recognise are those situations where future generation family members choose to separate their financial interests from other family members and appoint their own advisers. It is therefore very important for private wealth professionals to recognise the life-cycle stage that a particular family is currently in, and also where it is likely to go in future, and shape their advice accordingly.

Originally published by EPrivateClient.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Ian Slack
In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.