Leveraging Time, Attention, and Discipline through a Family Office

Stan Sung

Stan Sung

Stan is the Founder and Managing Director of GENRICH Family Office. He has been in the financial services industry for 15 years and originally founded GENRICH in 2008 as a tax and asset protection consultancy.

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What is the main purpose of a single family office (SFO)? At the core, the main responsibility of an SFO has always been to protect and expand a family’s wealth for multiple generations. A single family office is a private company that manages both the financial and personal affairs of one wealthy family. SFO’s can take care of investments and trusts for the family as well handle more personal items such as making travel arrangements and managing household staff. It’s a very organized structure. The family leaders can organize in whatever way that works best for them. Choosing to delegate oversight, organization, and vigilance to a SFO can help these families better leverage their time, attention, and discipline.

We’ve all heard the quote “with great wealth, comes great responsibility”. Ultra-High Net Worth families have many complex hurdles that, through delegating, they can more easily overcome. Some examples of these complex issues would be:

  • Ongoing oversight and due diligence of investments and investment managers  
  • Overseeing results/impact of philanthropic endeavors 
  • Simplified consolidated reporting of the status and performance of all assets owned
  • Physical and cyber security for safety and privacy
  • Family meeting moderation
  • Grooming the next generation to take over the family business or become strong leaders in their own right 
  • Contingency continuity of managing the family enterprise until heirs are properly prepared to take over the reins 

More and more UHNW families are converting to a family office offering three dimensional services because it allows them to delegate more responsibilities than just the typical core family office functions. The needs of these families are evolving to more than what a one dimensional service has to offer. What would a three dimensional service SFO look like? All of the core, one dimensional services would still be provided, but the reach would expand to cover a broader scope of functions such as tax compliance to proactive tax planning, regulatory compliance to leveraging differences in domestic and international legislation, as well as performance reporting. Another example would be legacy planning and management which would include items such as grooming the next generation to take over the family business or become strong leaders in their own right. There are additional elements to this concept that are equally as important, such as helping you determine the right plan of action and putting that plan into place. Once the specifics are established, the family office also handles the ongoing discipline to ensure the plan is carried out, assesses results, and fine tunes the system by maintaining a constant feedback loop. Succession planning, and ensuring the next generation is ready to take on the reins of the family enterprise can be a highly stressful issue for family leaders. Often times it can keep them up at night because they’re not sure if they’re handling it properly. Or perhaps they just don’t have enough time to dedicate to such an important matter. Not all children have the same mindsets and their approaches to business may be drastically different. Deciphering each child’s individual business mentality to determine their strengths and weaknesses in order to capitalize on opportunities can be a challenging process- a process that if outsourced can assist in minimizing threats to the family dynasty.

By broadening the scope of tasks outsourced, family business leaders will allow themselves more time to focus their attention on the things that matter most to them, When it comes to cost differential between insourcing versus outsourcing, it tends to be more cost effective for family businesses to outsource. That is why outsourcing has become such an important and fundamental component in business strategies for most companies. Outsourcing is when a business entrusts their enterprise with an outside company to deliver valuable results and provide superior quality with an ideal cost benefit. Outsourcing can assist businesses in achieving the following goals:

  • Free up internal resources
  • Focus on core areas like customers and business improvement
  • Increase overall efficiency with faster and better service
  • Reduce and control costs
  • Save on technology and overhead 
  • Accelerate projects
  • Gain access to skilled outside resources
  • More time for company reorganization

So many businesses choose to outsource because it helps control capital costs, reduce labor costs, increase efficiency, reduce risk, and focus on core business. Many of these same reasons are why UHNW choose to outsource as well. Outsourcing allows them to reap the same benefits. UHNW families deciding to outsource more of their “bestowed burdens” makes it easier for them to immerse themselves in their “discretionary desires” thus creating a better life for themselves, while their businesses flourish. They are able to entrust professionals to organize their busy lives. A skilled SFO can handle anything from those mundane day to day tasks, to providing assistance with the more personal and complex aspects of their client’s family life and business, thus steering their next generation in the right direction for success within the future of their family business. It’s important to have a property structured family office to meet each family’s needs and will be there every step of the way to nurture your family business and successes for generations to come.