Family Office Services

Stonehenge has partnered with Forerunner PLC, which was formed by the direction of a handful of clients that asked Stonehenge's Founder Casey Young to assist with their family's wealth and investments.

One of the biggest dilemmas that people face with family office wealth management is whether to outsource services or handle them in-house. The decision to prioritize certain aspects of family financial planning and choose whether to outsource them is equally important for family offices of any size, in terms of assets being managed.

Factors Affecting the Decision: In-House or Outsourcing

There are a number of benefits that can be enjoyed from outsourcing some family office services, but many key services would allow for better independence and confidentiality if they are kept in-house. The trick is to find the right balance, depending on the setup, goals, priorities and requirements.

There’s no one correct answer, since every family office is unique, but here are some of the factors that you should consider:

• Cost-Effectiveness
  Outsourcing certain services can bring down the overheads and associated costs, especially with economies of scale allowing you to access reduced prices for high-value and high-quality professional services.
  
  In addition, when staffing, technology and infrastructure services are outsourced, they are often cheaper but offer improved efficiency and productivity. This adds up to a subsequent improvement in overall performance and household functioning, which ensures better cost-effectiveness in both the short and long term.
  

• Professional Competency
  When it comes to family office wealth management, it’s essential to hire only the best advisors, especially for high net worth families. By outsourcing specialized family office services, you will receive expert, specialized and objective advice from professionals with extensive experience in their fields.
  
  However, you may find that in-house management of priority services allows you to receive trusted and independent advice, without any conflict of interest with external providers. In-house family office advisors can also create strategies and work on their skills in a manner that is specific to what your family needs.
  

• Complexity
  Family wealth management services require a thorough understanding of (and agreement with) the family’s needs and goals, setup and consolidation of various assets. In-house services are tailored to meet these requirements, with more direct and extensive control of wealth actually lying in the hands of the family.
  
  Sometimes, outsourced investment management services offer better performance and risk protection, through constant monitoring and due diligence by family office directors. Based on the legal structure, external providers with the ability to make investment decisions may also offer better regulatory independence and prevent negative publicity.
  

• Confidentiality
  One of the main reasons for keeping key services in-house is because of the assurance that the family’s privacy and confidentiality will be maintained. This applies to investment knowledge and internal strategies being kept within the family, as well as the security of confidential data.
  
  Outsourcing works best for services, systems, staff and infrastructure that do not deal with data that needs to be kept private. Critical services that are heavily reliant on confidential information and strategies should be kept in-house – it’s all about achieving a balance that works for your family office setup.

The common tasks that a family office may oversee include:

• Comprehensive oversight of family assets.

• Contemporaneous record-keeping of all financial assets.

• Daily management of property and other real asset holdings.

• Preparing monthly financial reports to show cash flow, income, gains and losses and a statement of assets and liabilities.

• Coordinating the advice and services received from all of the client’s other professionals.

• Responsibility for implementation and ongoing management for each matter under oversight.

• Personal concierge services to the family members for personal or business matters.

• Family and entity governance and carrying out the wishes of the family matriarch or patriarch.

• Oversight of philanthropic activities, foundations or gift trust accounts established.