FBM unit 3:Wealth management-
family offices and philanthropy
By: ANJITA KHANDELWAL
THE FAMILY OFFICE
• A family office is an investment ,liquidity
mgmt and administrative centre.
• Because it enables family members to invest
as a group. A family office improves the
families buying power and lowers its portfolio
mgmt costs.
Role of family office
• the family office is a separate operation from the
business, although some of the same individuals may
participate in both..
• It should have a formal business structure with a
mgmt board, and it should report to the family on
investment performance, liquidity and other
operating info.
• Professional mangers allocate assets, monitor
investment performance, manage risk, develop
financial planning etc.
Structure of family office
• There are two main family office models-
1. SFO( single family office)- the SFO is a traditional
model, serving single family but SFOs are dying
out. raising costs and the difficulty of retaining top
quality talent are causing fewer families to open
individual offices.
2. MFO(multifamily office)- it offers services to more
than one family, are often formed by the family
deciding to open doors of its SFO to other families.
• 3. MCFO(multi client family office)- where
existing family office consultants take a few of
their best clients and create a more vertical
business model of deeper relationships with
fewer clients rather than a horizontal with
large no of clients with smaller assets.
Family business philanthropy
• Organising philanthropy can be one of the role
played by the family office.
• Family business social and philanthropic activities
are often a product of family business values.
• Corporate responsibility becomes a global trend
and has developed in into many mainstream family
businesses.
• Many family business see philanthropy as a unique
opportunity for them to stand out from the crowd.
• Family fund
• Family business fund
• Individual income fund
