Thought PiecesAugust 7 2020

The Evolution of Family Offices

3 mins read

Written by Wigmore Firms

The Wigmore Association was founded in 2011, and is comprised of eight independent, non-competing family offices, with one goal to work together globally to help our families thrive.

The association is made up of:

  • HQ Trust, one of Germany’s largest multi-family offices, setting standards for over two decades and founded by the Harald Quandt family
  • Mutual Trust, Australia’s premier multi-family office, founded in the early 1900s, evolving from two single family offices
  • Northwood Family Office, Canada’s leading family office, founded in 2003 to meet a need for wealth and family management in Canada’s ultra-high net worth community
  • Pitcairn, the preeminent US multi-family office, founded in 1923, Pitcairn operated as a single family office for over 60 years. In 1987, recognizing the scalability of the resources that were in place, Pitcairn became a multi-family office, serving multi-generational families and family offices
  • Progeny 3, a single family office, serving three generations of the Smith-Hemingway family, comprising 12 households
  • Promecap, Mexico’s leading multi-family office, founded in 1997 as a private equity fund, it subsequently converted into a family office to manage the founding members’ assets, and in 2008, it became a multi-family office
  • Sandaire, the UK’s first multi-family office, built by the Scott family to serve their wealth and the wealth of families nearly 25 years ago
  • Turim MFO, the pioneer of the family office industry in Brazil, founded in 2001, serving multigenerational families with offices in Rio de Janeiro, São Paulo and London

Within these eight family offices there is a wide range of diversity, but a common commitment to serving the integrated wealth needs of families, with professionalism, trust and objectivity. ‘Working together to help our families thrive.’

The definition and actual number of single family offices is unknown, but seems to be about 7,500- 10,000 globally (a ten-fold increase since 2008) with assets under management of $6 trillion (EY, Campden).

There are many fewer multi-family offices. If you constrain the list to North American firms that have $1B AUM, serve a substantial group of clients with $30+ million, and offer an integrated suite of services, the total is under 150 (J.E. McLaughlin).

However, there is a trend which we can see evolving in the market place, with far more single family offices broadening their offering to become a multi-family office, merging with other family offices or partnering with a multi-family office to outsource specific requirements that they are unable to cater to internally.  

In a single family office, a lot of responsibility may fall on just one individual who may or may not have the skills, resources or experience required to deliver everything the family needs. If the family does not require the full-time dedicated resources of an SFO, they might consider a multi-family office. MFOs can leverage larger teams of experts, access a wider network (for specialist advice, expertise and opportunities), share operational infrastructure and spread costs. In addition to this, multi-family offices can also offer additional services such as supporting a families’ focus on sustainability, through to succession planning, avoiding over-reliance on one individual and bringing in expertise in specific fields where necessary.

As family offices broaden their services, having professional teams is becoming more crucial. Interest in services other than traditional wealth management is growing, including impact investment, environmental social and governance (ESG) investing, or next generational wealth transfer.

Multi-family offices can connect families with a similar experience when it comes to topics such as philanthropy, or preparing the next generation to be purposeful and responsible stewards of wealth.

Over the coming months, Wigmore will share a series where we will explore the origins, purpose and evolution of family offices, focusing on answering the following questions:

  • What is a family office?              
  • What is the history of family offices? 
  • Why does a family or entrepreneur typically set up a family office?   
  • What are the benefits of a family office?          
  • What are the different benefits of a single or multi-family office?
  • Why may you need a family office?