Wealth Management for Family Office in India: Your complete guide

family office in india

Wealth Management for Family Office in India: Your complete guide

Is it about a single family working together? Or is it about a family operating a small business? Or a family trying to set up an office for this and several generations to come? For those who don’t use this term often, all the above guesses could well fit the definition of the family office. But for those who are accustomed with the finance world, they know the definition has a broader meaning. A family office is an office or a private wealth management firm that offers range of personalized services that go way beyond investment and wealth management or financial planning for ultra-high-net-worth (UHNW) families.

What Is Family Office All About?

To elaborate one who is running a family business or (and) part of an affluent family – effective wealth management for them doesn’t come as a choice but a necessity. Wealth management that encompasses a range of issues related to not only business aims, but also personal and family goals. Be it managing investments, tax planning, estate planning, guiding through philanthropic planning, all sort of money management that one’s family may need, the family office helps addressing and meeting these goals.

What Is The Need Of A Family Office?

There are many good reasons to open a family office in India that go beyond the level of assets or wealth management.

  • Asset Control – Each family comes with stated goals for financial security, wealth preservation, and family legacy. These factors drive the work of the family office. With a family office, the family is able to directly oversee decisions about family financial matters.
  • Continuity of the Family – Many families rely on the family office to foster a sense of community and family unity over time. The family office serves as a partner in the work of sustaining the family’s assets.
  • Valued Partnership – For ultra-high-net worth families, financial management can be extremely complicated. A family office provides enormous value because it provides an integrated service model that accounts for everything financial at one place.
  • Informed decision – Family office provides family members with the information they need to make informed and effective financial and philanthropic decisions.
  • Objectivity in Decision-making – Family leader will have access to a dedicated team of trained professionals whose sole purpose is the coordination of the family’s key assets. There is no scope of conflict as the interests of the family are aligned with the interests of the advisors because the advisors work directly for the owners.
  • Complete Customization – Each family is unique and so is their need. Right from the service menu, educational offerings, and financial reporting of a family office are developed with customization as key.
  • Confidentiality of Information – This dedicated business entity provides the best protection for the family’s privacy and security of financial information.
  • Less Stressful Management – For family leaders who personally handle most aspects of a complicated and time-consuming financial structure, the family office makes life a lot less stressful for them.
  • An all-time assistance – Whether you are travelling for business or leisure, the family office ensures that the family’s financial life continues to run smoothly —bills are paid, investment portfolios are managed, taxes are filed.

Is Your Current Advisor Really A Family Office?

This is an important factor to consider. Many wealth advisory firms provide some family office services, their pitch may be more inspirational than factual but that doesn’t mean they are the dedicated family office service provider. Although there is no strict definition of what separates a family office from the more common financial advisory relationship, but there is a great deal of subjectivity both as to a family’s needs and the service offering.  A dedicated family office in India should have an in-depth, holistic approach that provides clients with services that addresses many aspects of their daily financial life from high-level financial planning, investment management and family governance issues on down to more mundane services such as bill paying, staff payroll and concierge services. Know the services offered by family offices to distinguish one from a wealth advisory firm.

Services offered by family offices

While management of the family finances is at the heart of family offices’ services, the offices can provide a range of other services as well. The following are the typical services, a family office in India should consider providing to its clients:

Financial / wealth management

The different aspects of financial planning include:

  • Investment management services – This is the most crucial task of family offices which mainly aims at preserving, maintaining and increasing the family’s wealth. The different aspects of investing are taken care – from determining investment goals and allocating assets to actual execution and goal tracking.
  • Reporting and record keeping – Family office reports and consolidates all family assets and their performance. The offices typically also provide tax preparations and reporting.
  • Managing wealth transfers (from generation to generation) – Family office can help manage wealth transfers within a family, for example from parents to children.
  • Life management and budgeting – Family offices can also take care of membership payments, budget servicing and budget objectives.

Strategic planning

Another important aspect of wealth management is strategic planning. Family offices typically offer strategic services as well which include:

  • Business and finance advice – From debt management to structured financing – Family offices provide assistance in overall strategic planning of finances. And not just that, family offices offer guidance on business management including issues such as buyouts or business development.
  • Strategic estate planning – If the family has a number of properties, family offices can provide assistance on the best use of the estate. For example, information on when to sell a property or strategic tax planning.
  • Succession planning – Family offices can provide advice on succession planning and help with the administrative part of ensuring a smooth transition.
  • Educational planning – Now as a business leader, you may want your next generation to take over your business and run it successfully like you have. Family offices help in educating the next generation on wealth management.

Administrative support

Family offices tend to also provide a range of administrative support for wealthy families which include:

  • Philanthropic management – Philanthropic management involves guiding the family regarding donations and administering charitable work.
  • Other administrative work – Family offices can help with other administrative tasks, such as dealing with public relations firms, banks and lawyers.

Advisory role

Besides, administrative support and strategic planning, family offices aspire to provide families impartial and unbiased advice on finances and in other areas that are important for the family. The advisory roles include:

  • Tax and legal advice – helping construct a tax plan and ensuring the family is operating tax compliant.
  • Compliance and regulatory advice – Helping with corporate governance, staff management and board role, etc.
  • Risk management – Family offices aim to provide risk assessments to their clients, together with continuous monitoring of risks. The risk management assistance includes insurance advice as well.

The above is a comprehensive list of the core services family offices provide. One should look at all these parameters before bringing onboard a family office in India. Creating a successful family office requires strategic planning and design. With decades of experience, we can prepare you for each step of the way – from assessment and visioning to work plans and implementation. Contact us and together, we can help you design a strategy to successfully manage wealth and your family finance.

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