Member News

November 3, 2021

MBMG – Can I Have a Family Office?

Why this Flash?

This Flash is a follow-up to our recent release talking about the international award won by MBMG’s Investment Advisory service in recognition of our firm’s multi-family office service (MBMG Family Office). Since then, we have had a few clients responding by asking simply what Family Office was.

What does Family Office entail?

In short, Family Office provides unique requirements bespoke to each client and therefore there is no single standard definition of what constitutes each family office. Key family offices tend to evolve around issues and services such as tax optimizing and legal advice on the structuring of businesses and investments (domestic and cross border), reviewing all business assets and investments on a risk basis, accounting, (mostly digital transformation these days), international confidentiality and reporting standards (directors or bank accounts, for example, as is the case with OECD’s Common Reporting Standards), succession and overall cost-effectiveness particularly for existing models many of which were setup in days when banking fees were more expensive than now.

What is the minimum asset size for a ‘Family Office?

MBMG Family Office specializes in what might be regarded as smaller family offices, with cash flows, businesses, properties, and investments from upwards of USD 1 – 5million. This is generally somewhat lower than the levels that might typically be the province of the family office, but we take the view that it is best to have a structure and a vision as early in the process as possible and this can help allow for investment diversification and expansion when the opportunity arises.

How does the process start?

This depends on what might be the most urgent for you – it can often range from succession and legacy, a prenuptial agreement, tax efficient distribution of cash from a business, a bank account or entity that might be liable to reporting obligations or a need to restructure business holdings, but otherwise we will normally start by looking at the various risks inherent in the asset portfolio which will include risk related to not only conventional investments related to stocks, ETF’s, bonds, or derivatives but also in businesses, currency and property as well as the current cost structures. In many cases we find that risk is overly high outside of the core business, or that the client is overpaying for advisory or banking services. We take seriously, a client’s acceptable risk parameters and income needs.

How does the process start?

This depends on what might be the most urgent for you – it can often range from succession and legacy, a prenuptial agreement, tax efficient distribution of cash from a business, a bank account or entity that might be liable to reporting obligations or a need to restructure business holdings, but otherwise we will normally start by looking at the various risks inherent in the asset portfolio which will include risk related to not only conventional investments related to stocks, ETF’s, bonds, or derivatives but also in businesses, currency and property as well as the current cost structures. In many cases we find that risk is overly high outside of the core business, or that the client is overpaying for advisory or banking services. We take seriously, a client’s acceptable risk parameters and income needs.

Does MBMG need to outsource any part of a Family Office mandate?

MBMG multi-family office is a multi-disciplinary approach to providing holistic advice. we are equally happy to use the professional services, such as legal, accounting, audit, or tax services of affiliate entities within MBMG Group or our network global partner, the GGI Group or to use our expertise to act as a liaison to external professionals in these fields according to whichever arrangement best suits each family. MBMG has over 20 years of experience in tax, restructuring, succession and offering investment advice.

Should I be worried about confidentiality?

No. MBMG takes confidentiality very seriously and we will always inform the client first if an MBMG or affiliate or partner is required to assist our advisory practice, or if we engage working partners in Singapore, Hong Kong, the Isle of Man, Jersey or the UK to help with entity setup up or restricting or simply corporate or individual bank account openings and we operate strict ‘Chinese Walls’ in relation to information. Relationships are always structured to identify, mitigate and avoid conflicts of interests.

Below is a graphical display of all the elements of a Family Office for a more concise explanation.

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