InvestmentsJul 8 2013

Safeguarding family values

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Finally, philanthropy can be an important role for a family office. The trend is for philanthropic families to seek more control over their giving rather than rely on gifts to third-party charities. Again, this trend concerns disintermediation and a desire to exercise more control over charitable work.

But how do less wealthy families operate in this way? For some, generally with liquid assets in the tens of millions, they could consider using a private investment office or a multi-family office, which are set up to operate in the same way as single family offices but for a range of different families. But for most families this is not feasible. Nevertheless, if one thinks through the reasons behind setting up the office, there are some lessons to be learnt for all of us. Firstly, the very rich are interested in knowing what they are paying for from third-party services; all of us could and should be much more enquiring about fees payable to our advisers and managers. They also want to know if the money the advisers make is skewed towards any particular outcome, in case they perhaps make much more money from one asset class over another.

William Drake is co-founder and chief executive of Lord North Street

Key points

■ Having a family office has become something of a fashion statement in recent years among the super rich

■ A main driver is control – the nature of entrepreneurs makes them controlling

■ Another driver is the desire to cut out the middleman