Once a single family or a family with multiple branches has enough cumulative wealth, the lure of a single-family office SFO is strong. These recommendations may be helpful:

(1) Don’t attempt too much at once: Avoid the euphoria of the founding phase, initially focus on a few core services and then add services over time.

(2) Define core services: This includes clear and consistent reporting for all types of investments – such as stocks, bonds, real estate, private equity, and all portfolios. An essential part of this service is the efficient handling of documents, including bills, receipts, and especially contracts. 

(3) Select between two and maximally four types of investments that matter most to your family. Although SFO should eventually handle these internally, your new SFO can initially coordinate services related to them, i.e. control and supervise the work of external consultants. 

(4) Hire loyal and experienced employees: The selection of the finest employees is the key for any successful SFO. Such employees should work exclusively in the interest of the family members, be experienced in selecting partners and negotiating mandates. They should be able to work individually, but also together as a team.

(5) Ensure freedom from conflicts of interest in the team: Trust-centered family office relies critically on the idea that employees are focused solely on the interests of the family members. Thus, the employees need to be valued as poorly conceived bonuses (such as bonuses that encourage “daring” investment strategies or apply only for certain asset classes) can threaten this trust. 

(6) Formulate Vision and Core Values

Work together with your family to formulate a set of vision and core values for your SFO. Record them in writing as they can help you to concentrate on what is truly essential. This helps you to avoid losing sight of the large, long-term goals.