GlenQ on the purpose and possibilities when it comes to establishing a family office
Pah! What’s the point of a virtual assistant? Why would anybody need one?
It’s a reasonable question. No doubt asked by many upon first encountering Apple’s Siri or Amazon’s Alexa. Having survived until now without requiring an artificial intelligence friend in our everyday lives, why would anybody need one now?
Then there’s a moment of clarity – an understanding that these virtual assistants do have a point after all.
They exist to remove some – not all – of the routine tasks that we’re so used to doing ourselves. They exist to make lives easier and create a little more time for things we want to do. Some will use them a lot, and some just a little.
So, what’s the point of a family office? And why would anybody need one?
Well, like Siri and Alexa, family offices fundamentally exist to make lives easier and create a little more time for things you really want to be doing. And, like virtual assistants, some will use the family office a lot, and some just a little. It’s a question of intentions, requirements and best fit.
‘The concept of a family office is not new,’ explains Paul Glennon, Principal at Jersey-based trust company GlenQ, ‘The famous Rockefeller family established one more than 100 years ago, to centralise control of their vast wealth. But the service has evolved and expanded considerably since. While powerful family offices still exist for super-rich use, the principal has become far more accessible and attractive to modest high net worth families too. It’s a matter of understanding what they are trying to achieve. Then decide the best option to deliver.’
There are several reasons for establishing a family office. Succession planning may be priority, to ensure wealth passes efficiently to the next generation. Asset protection is another driver, making sure wealth is managed without risk according to family wishes. Or permitting families to retain direct control of their wealth management, or providing privacy when moving wealth between vehicles without publicly disclosing family identity.
‘Individual clients have different family wealth management requirements,’ Paul affirms. ‘The role of GlenQ is listening, understanding and proposing a solution best meeting their needs. There are several different options, ranging from establishing an independent family office, through to other investment vehicles that can meet requirements at an often considerably lower cost. The choice usually comes down to a straightforward benefit versus cost analysis.’
An independent family office requires the direct employment of staff in advisory and administration roles. While an attractive option, the costs and complexity involved can make it prohibitively expensive for many high net wealth families. Fortunately, lower cost and less complex alternatives do exist.
‘We can establish a trust and company structure for clients,’ Paul elaborates, ‘which offers many of the family office benefits without the corresponding costs. Or increase the level of control through using a Private Trust Company (PTC), with family board members making decisions while GlenQ provide the necessary infrastructure and undertakes day-to-day administration. Alternatively, there’s a Jersey Foundation, through which day-to-day decisions are taken by a council of family members or trusted advisors appointed by the client.’
‘With all options, Paul concludes, ‘GlenQ can also provide supporting family office services. We can appoint investment managers, for example, or assist in finding suitable schools or universities for our client’s children. It’s all part of the service and included within the fee agreed at the start of our relationship with the family.’
So, what is the point of a family office? Well, if there’s still uncertainty perhaps it’s time to ask Alexa…