Having a team of experts overseeing your financial affairs every day is a relief for most business owners because it frees up valuable time for running your business more effectively, enjoying your family, or pursuing other endeavors of interest.

This document will help you and your family understand the value a Family Office may create, and what to expect over the next twelve months as a member.

Step 1 – Intake, Diagnose and Assess Assets and Ownership Structures

When a patient walks into a doctor’s office for the first time, the doctor’s goal is to aggregate pertinent information and form a diagnosis. Much like a patient walking into a doctor’s office, a Family Office must assess the family’s current financial condition before offering any intelligent and thoughtful advice.

Most often, families are not even aware of the symptoms they are presenting, and therefore are unable to effectively communicate the areas in which they need help. For this reason we begin the process of advising our families from square one. By aggregating all of your legal, financial, and accounting statements, we will build your family a comprehensive Balance Sheet describing your families’ total net worth. We will also address current and future expectations for sources of income, expenses, and begin to discuss your family’s short and long-term goals.

Step 2 – Build a Family Financial Website

After your family has submitted your account statements, we will build a secure Family Website, which will aggregate all of your financial accounts, regardless of the institution in which they reside, and update each account’s balance every day. This will enable family members to monitor their investments, and most importantly track your performance against your goals. We also create and electronic vault for each family, so you can keep important legal, financial and personal documents all in one place. In the case of an emergency, this vault will enable family members or your heirs, to easily access important information quickly, ensuring proper steps are taken if decisions need to be made.

Step 3 – Determine Family and Individual Goals and Objectives

Simply asking a patient to describe what they believe is wrong is often insufficient to properly diagnose their condition. Often, a series of direct questions must be asked in order to uncover dormant problems or issues that are likely to plague them in the future. Similarly, the Physician Family Office must truly understand a Family’s goals and objectives in order to help them build an appropriate long-term investment and estate strategy. Your short and long-term strategy will include legal asset protection, educational funding needs, asset allocations based on your family’s specific risk tolerances, gifting strategies, and retirement needs, among many other aspects, which are unique to your family.

Step 4 – Project Current Cash Flows and Future Net Worth

The next step in constructing a strategy to manage a Family’s total net worth is to understand what the current expected cash flows will mean to the family’s total net worth over a lifetime. This base case scenario helps us uncover shortfalls, and helps us understand what level of risk and return the family will need to take in order to achieve its goals. At times, simple solutions such as reducing spending, prolonging retirement or increasing contributions to tax deferred accounts will solve challenges. Yet more often, the family might adopt a more effective asset allocation strategy, and utilize different categories of investments or prioritize goals. The point is that you need to know the full spectrum of reasonable outcomes before you make decisions about planning your future.  While the decision is wholly yours to make, we make it easy for you by building a spectrum of alternative scenarios to help you make an intelligent, well-informed decision about your future. 

Step 5 – Review Estate Plan, Trusts and other Legal Structures

Before a comprehensive investment strategy is established, we must first understand the current legal structure of assets, and the flow of those assets through the estate to future generations. It makes little sense to spend valuable time and energy protecting a portfolio from market risk and growing the assets, if those assets will be depleted through unnecessary estate taxes or will be subjected to creditors, litigators, and government entitlements. We therefore analyze the current asset protection and estate documents, and outline the challenges specific to each Family.  This is intended to save you time and simplify your estate without compromising the integrity of your estate structure.

Step 6 – Identify Education, Retirement, and Insurance Challenges

Depending on a family’s lifecycle, there may be obligations the family would like to support before or during retirement. These may include children’s weddings, education, home purchases, and religious events, amongst others. We will help families run a series of positive and negative scenarios (such as early death, disability, long-term care, bull market, bear market, inflation) in order to understand the impact of future events on the family’s net worth, and uncover areas where we can further protect the family from possible negative outcomes. The goal is to reduce negative surprises, and ensure you are in control of your future.

Step 7 – Develop Investment, Estate, and Asset Protection Strategies

Once we understand the projections of your Family’s net worth, we will understand your ability to meet your goals and objectives. The next step is to research and recommend a series of strategies to legally protect your family’s assets today, and in the future. By coordinating the advice of estate planning attorneys, tax attorneys, accountants, investment managers, and elder law attorneys, then cost effectively implementing intelligent strategies into this process, we strive to structure a series of recommendations that solve the challenges your family faces. Of course, these are only recommendations, and ultimately you are the decision-maker. Your input and final decision will determine the solutions your family implements.

Step 8 – Implement Strategies and Allocate Assets Cost Effectively

After we have all agreed on the appropriate structures for protecting and managing your family’s assets across multiple generations, we will begin implementing these strategies in tandem with you or on your behalf. This can be as simple as reallocating your assets more effectively, or as complex as creating new legal entities and transferring assets. Whatever the direction, you will remain in control.

Step 9 –Monitor Performance, Rebalance Portfolios, and Review Investment Strategies

Of course multi-generation asset management is not as simple as creating a strategy, and letting it become stagnant. In fact, nothing could be more wasteful. All sorts of events will transpire which affect actual income, expenses, and investment performance. For this reason, we continuously monitor the portfolio and meet with you to understand any changes which may be needed. Additionally, we will conduct meetings with your family as often as needed, yet in no case, less frequently than semi-annual meetings to address any current and outstanding issues the family would like to address.