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Family Office – Growing & Protecting Significant Wealth

In our article and newsletter content here at McKinley Plowman, we often touch on the importance of managing one’s finances effectively. This typically involves getting the basics right – setting a budget, making well-informed financial decisions, engaging with an adviser, and so on. While these are relevant for just about everyone, there are additional layers of complexity and a greater number of considerations to be made where significant, inter-generational wealth is concerned – and this is where a family office structure can come into its own. Let’s look at what a family office is, who can benefit, and why.

What Does a Family Office Structure Involve?

A family office is a structure set up by individuals in high-net-worth families to help manage their wealth. It involves a team of financial professionals to oversee and manage the private affairs of the family, including but not limited to wealth creation and investment management, tax planning and compliance, succession planning, superannuation services, finance, and philanthropy.

A family office takes the burden away from individuals within the family to manage the complex financial affairs that come with substantial wealth. It coordinates investment strategy, business succession, transfer of money between family members and generations, administration, and much more. Importantly, it allows the family to be as involved as they like with the actual administration of their wealth, allowing them the freedom to focus on other things if they prefer (e.g. operating a business or enjoying retirement).

Who Needs a Family Office, and Why?

Family office structures are typically set up by families who have amassed significant wealth, especially if that wealth is inter-generational. While there is not necessarily a “minimum” threshold for wealth required to set up a family office, the complexity and input required to administer a family office structure means that families with $10 million or more in investible assets would benefit the most.

A family office can bring a number of benefits for high-net-worth families. Many such families have complex and unique financial situations and requirements, and a family office allows them to work alongside a team of trusted advisers who are experienced professionals in their relevant fields to manage their wealth effectively. In most cases, families who have put themselves in such an enviable financial position have done so because they are particularly good at whatever it is they do, often because they own an extremely successful business, but they are also aware that they aren’t experts in everything (financial planning, investment management, accounting & tax, and so on) – so they understand the importance of leveraging this work out to the professionals.

Many high-net-worth families also value privacy, and a family office allows their finances to be managed discretely by a trusted team. It can also facilitate the succession and intergenerational transfer of wealth, as well as provide an effective framework for philanthropy. Both of those aspects allow members of high-net-worth families to leave the legacy they desire and look after the next generation.

How MP+ Can Help

McKinley Plowman’s integrated, coordinated service offering includes financial planning & wealth management, accounting, Australian and international and tax advice, superannuation services, finance broking, as well as access to our extensive networks of professionals in a range of industries. Our Family Office Management service puts you in touch with every service required to secure and grow your wealth for many years to come, and assist you in making effective financial decisions where significant wealth is a key factor. To speak to one of our experienced financial advisers today, please call us on 08 9301 2200, or contact us via our website.

written by:

Nick Gahan

Nick has been in the financial services industry since 2008 as a financial adviser, and has completed a Master of Financial Planning (MFinPlan) and Advanced Diploma of Financial Services (Financial Planning) with specialist accreditations including Margin Lending and Self-Managed Super Funds.

Nick is passionate about helping individuals and families to create, grow and protect wealth so that they can focus on enjoying the things in life that are most important to them – and finds nothing more satisfying in his work than seeing clients achieve their goals – whether that’s a particular lifestyle goal, a comfortable retirement or going from financially distress to financial comfort.

Outside of work, Nick is all about family time with his wife and two young boys. Camping, four-wheel driving, Auskick coaching, surfing, swimming, and watching his beloved Manchester United.

Nick is an Authorised Representative of Fortnum Private Wealth Ltd.