I have been working in the family office business for more than 10 years.  Many people is curious about the family office role.  These are the questions of an interview I recently did.  Even though a family office is not for everyone the idea of looking for the right advisors in all the aspects of our wealth is critical.  Therefore, this article could be interesting for everybody.

What is a family office?

A “family office”, in its more extended version, is the supervisor and coordinator of the services related with the management of the wealth of a family:  Banks, brokers, insurance, accounting, estate, wills, taxes, investments, real estate, art family dynamics, succession, family governance, etc.

Some families decide to establish their own “family office” and hire professionals to coordinate each of these areas.

To create their own “Family Office” a family should have a very large net-worth. If they look for good professionals, the cost is very high.

This is the reason why the “multi-family offices” exist.  They have high qualified professionals, but their cost is covered by several families.

However, “multi-family offices” neither have the “best” professionals for each area.  Once again, for cost reasons.

For example, a very good estate attorney.  Most probably this professional has his own practice.  For him it doesn’t make any economic sense to work just for one family. Therefore, we believe in hiring these services from the best professionals in the market.

Under the supervision and coordination of the multi-family office, the services of top professionals are hired according to a family needs.  Attorneys, CPAs, art consultants, could be hired under this concept. The multi-family office will provide the client with options so he can decide considering expertise and cost.

The only area which we believe should be in house is the investment area.  Investments are the core of the family wealth, therefore is the area where the expertise of the multi-family office should be excellent. A multi-family office should have an investment team of great quality and expertise.  This team will evaluate all the existing investments and submit them to the client according to his profile and objectives. The right network in the investment world is necessary to get an adequate and global tailored idea of the investment process.

A family office, under the above concept, is NOT:  a bank, a bank subsidiary, a broker dealer, a person selling venture capital ideas, a law firm, an accounting firm.

All of them could be providers for a family office of specific services or investments, by they are not a family office.

What is the main objective of a family office?

The main objective of a family office should be the preservation of capital through generations.  When we talk about capital, is not only financial capital but also the family’s human, intellectual, and social capital.

What do you mean by human, intellectual, and social capital?

Following Charles Colliers’ definition, human capital refers to the capital bring by each family member, who they are, what they can do.  Intellectual capital refers to how family members learn and govern themselves; social capital denotes how family members engage with society at large

The financial capital, the assets of the family, in a family office is the base around which the others act.

Do you mean that the financial capital is the most important one?

No, however, without the financial capital, all the other “capitals” lose priority.  If the financial wealth is not invested in the right way and is not sustained through time, the family wealth extinguishes.  Therefore, the impact the other capitals can diminish.

You call yourselves a “Family Investment Office”; Is this related to the above?

Yes. If the wealth is not preserved there is nothing to manage.  Our vision is that wealth should be preserve throughout time and generations.  If this is taken care of, the family can excel in the use of the other capitals.

To achieve this objective our investment philosophy is based in the following


  • Seek out diverse types of investment risks and returns
  • Invest in core strategies across market cycles


  • Invest with a margin of safety by focusing on fundamental value
  • Spend wisely; prudently manage fees and taxes


  • Avoid “the herd”
  • “Buy from the fearful, and sell to the greedy”
  • Do not get distracted by short term “noise”
You have mentioned “professional investor” several times, what do you mean?

Professional investors are very different than investment professionals. The difference boils down to putting your own money on the line. When investing your own money as a professional investor does, you approach investments with a very different headset. Whereas investment professionals judge themselves by the relative performance of their clients’ accounts to various indices, professional investors just want to make money as close to “all the time” as possible. They are most interested in the dollars in their pockets. Consequently, professional investors spend as much time trying to figure out how an investment might lose them money as they do on how it might make them money; they look for a “margin of safety.” In fact, developing a full understanding of how and when they might lose money is the primary means through which the best professional investors have been able to make money, consistently, over a long period of time.

The term “family office” is frequently heard, however by your answers we can say you have some differences?

We want to believe we are different in our offer, however, there are some basic things a family office should do.  This is related to the first question.  There are firms who do certain tasks a family office does but that doesn’t make them a family office.

For example, the consolidation of financial statements.  Of course, we need to do it to have the whole picture of the family wealth.  But this could not be the only service provided by a Family Office.  An accountant or a trusted person can do it with help of an Excel sheet.

There are others who offer proprietary products.  The only income of a family office is the advisory fee paid by the client.  The family office should not have products with which they are making extra fees.  A conflict of interest arises, they are charging for the advice and the product.

Some family offices offer venture capital services.  This is great, but they are  “venture capital specialists” or managers.

Some family offices hire the services of third parties for the investment advice. This goes against the ethos of a family office. A family office should have its own Investment Team and investment strategy and should be responsible for the investment advice.

And then you have the “kickbacks” offered by other institutions.  The family office receives a commission when invests in a product or opens an account with an institution on behalf of the client.  This is completely against the ethos of a family office.  Once again, the only income of the family office should come for the advisory fee paid by the client.

At the end the fundamental issue here is that the client should be able to sleep at night.  He should know his wealth is preserved.  At the end the client is giving is putting in the hands of the family office his financial future.

How do you manage the non-financial capital?

It is done through Family Governance. It covers the Governance of the Business (rules that the business will follow) and Governance of the Family (rules the family will follow).  The governance of the business includes the formation of a board of advisors, board of directors, professional management, etc.  The governance of the family is a more difficult subject as it touches topics that affect family members. For example, estate plans, leadership, if family members will participate in the day to day operations of the business, etc.  The way to establish these rules is through a Family Constitution.

Any additional comments?

I believe the client’s goal is “to sleep well at night”.  And this is related to the relationship of trust the client establishes with the advisors. The client should trust the advisors in every sense.   At the end, he is placing the future of his financial wealth in the hands of the family office and the people who represent it.



Interested in knowing more about personal finances, what

about financial life coaching?  Write to pia@myfinancebliss.com

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