Once almost exclusively associated with long-standing wealthy dynasties, family offices have emerged as an increasingly popular wealth-management structure among entrepreneurs and business leaders.
According to research from Deloitte, by 2030, family offices could surpass hedge funds globally and manage assets in excess of $5.4 trillion. This trend underscores a significant shift in how wealth is managed, structured, and protected, particularly among entrepreneurial individuals with substantial financial assets and complex, multi-generational ambitions.
Understanding the role and advantages of family offices is becoming increasingly important for entrepreneurs who have accumulated significant wealth. In this article, we will explore what family offices are, why they are rising in prominence, and, crucially, the essential role that professional accountants play in establishing, structuring, and safeguarding multi-generational wealth.
What are Family Offices?
In essence, a family office is a privately held organisation established to manage the comprehensive financial, investment, and personal affairs of a wealthy individual or family. Unlike traditional financial institutions, family offices provide tailored advisory and wealth management services specifically aligned with the unique values, objectives, and long-term ambitions of a family.
Family offices primarily fall into two categories. A single-family office (SFO) and a multi-family office (MFO):
- An SFO is dedicated exclusively to managing the wealth and affairs of one affluent family. It offers highly personalised, confidential services but typically requires considerable financial resources to establish and operate efficiently.
- Alternatively, an MFO provides shared advisory and financial management services for several unrelated families. This arrangement allows for shared costs and access to extensive expertise, making it a popular choice among entrepreneurial families whose wealth, although significant, might not justify a single-family office structure on their own.
Why Are Family Offices Gaining Popularity Among Entrepreneurs?
To understand more about the recent surge in family offices, it’s important to first look at the data behind this meteoric rise. In 2024, Deloitte reported that there were approximately 8,030 single-family offices in existence. However, by 2030, that number is set to grow to 10,720 — making for an impressive 75% increase. The professional services firm highlights that the rapid growth of family offices has been driven by a “combination of factors” such as increased wealth concentration, successful transfers of generational wealth, as well as more robust private equity and Mergers & Acquisitions markets.
Overall, the emphasis placed by family offices on long-term investment horizons and strategic wealth preservation resonates with entrepreneurial values. Family offices often specialise in patient capital investments such as private equity, real estate, and alternative investments, enabling entrepreneurs to align their financial strategies with broader personal and business goals.
The Crucial Role of Accountants in Establishing Family Offices
Professional accountants hold a pivotal role in the setup, structuring, and operation of family offices. Far beyond basic accounting duties, these specialists provide comprehensive advice and strategic guidance integral to long-term wealth management and protection.
Initially, accountants assist entrepreneurs in choosing the appropriate structure for their family office, advising on legal entities, jurisdictions, and tax-efficient arrangements. This decision is crucial, as a well-structured family office must remain compliant across multiple jurisdictions while effectively minimising unnecessary tax exposure.
Once established, accountants ensure ongoing compliance and effective governance. They produce transparent and timely financial reporting that enables informed decision-making and robust oversight, essential in preserving the trust and interests of family members across multiple generations.
Additionally, accountants play an integral role in estate and succession planning, working closely with legal and financial advisors to ensure wealth smoothly transfers between generations without disruption. Their expertise in tax strategy and regulatory environments helps navigate potential pitfalls that could jeopardise long-term financial security or stability.
Secure Your Multi-generational Wealth with INAA
Navigating the complexities inherent in family office structures requires access to specialised, trusted professional advisors who understand the intricacies of wealth management and succession planning. At INAA, our international alliance of independent accounting professionals offers entrepreneurs precisely this depth of expertise, enabling confident strategic decisions and effective multi-generational wealth preservation.
By collaborating with INAA-affiliated advisors, entrepreneurs gain tailored, confidential support in establishing and operating successful family office arrangements, ensuring that wealth is not only protected but strategically aligned with long-term familial and business objectives.
Learn how INAA can support your ambitions in establishing a robust, future-proof family office. Get in touch today.