Family office servicesPlanning for tomorrow today

A ssess the big pictureThere are three key stakeholders of a family office: owners, families and the businesses or investments they own. These stakeholder groups may interrelate and overlap. That’s part of what makes family businesses unique. Any successful long-term plan should consider each of these stakeholder groups with a focus on four dimensions of succession: leadership, ownership, legacy and values, and wealth transition.

onsider the evolution of family officesA family office can take many forms. As family wealth increases and business needs get more complex, the family office may evolve from a simple founder’s office into a complex, full-service company. And the office could revert over time.

Familyvision and

governance

Business and investmentsOwners

Families

o nde s o ficeOften an assistant or a few staff members who pay bills, make travel plans and handle the financial needs of the founder

Em edded amil o fice

A shareholder services group, which may handle the family’s personal financial affairs as well as corporate duties

Compliance o tax o ficeA CPA-led office that oversees investments and takes care of record-keeping, insurance and tax returns

nvestment management o ficeIn addition to accounting services, manages private equity investments, hedge funds and more; may seek to manage money for outside families as well

ll se vice o fice o p ivate t st company1

For the most complex scenarios, full-service office that manages all aspects of service: family education, tax, investment, governance and accounting, usually across multiple generations.

1 Private trust companies help a family govern, manage and administer the trusts of the family.

It’s a j ourney … where are you?Family offices face challenges that distinguish them from other entities — challenges that, if not addressed, can reduce wealth, jeopardize family unity or derail the family’s legacy. Here are a few of the common challenges:

• In a low-interest-rate environment, it is difficult to preserve and grow family wealth over generations. Professional management is needed.

• The tax and regulatory environment varies throughout the world and is constantly shifting.

• Cyberattacks, phishing schemes and other personal attacks can create financial losses or jeopardize secrecy and privacy.

• General transitions and fractures in family cohesion threaten sustainability and continuity.

• While 62% of family business owners have not chosen a successor, choosing a discrete successor is less important than having a succession plan.

Whether you are creating a new family office, separating the family office from the family business, or shepherding an existing office, it is important to ask how are you helping your family secure their financial future and legacy for the next and future generations.

2 | Planning for tomorrow today: family office services

O ur approachEvery family office is unique. While the services they provide are similar, the method of delivery varies greatly by family. It is our understanding of the success factors for delivering and designing these services that underpins our approach to assist you.

Whether you are evaluating the setup of a family office or evaluating the effectiveness of your existing family office, our approach is rooted in a review of key areas that, if addressed effectively, determine long-term success.

The major advantage of this approach is the way we scrutinize all subject areas with a holistic view to operational, regulatory, tax, strategic and family-related aspects. This enables us to uncover hidden opportunities and risks, which might have been missed if we were to examine each area individually.

Familyoffice

services

Estate planningand trust

administration

Accounting,reporting and

record-keeping

Investmentadvisory

Income taxplanning andcompliance

Conciergeservices

Governance and succession

Compliance and risk

management

Trac

k/monitor Evaluate/assess

Design/in

nova

teExecute/implement

Legacy and values

Strategy

Internalinfluence

External influence

Governance

Regulatory

Economic

Industry/investments

Planning for tomorrow today: family office services | 3

EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

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Where are you on the path to securing your financial future?

For more information contact:

Robert (“Bobby”) A. Stover, Jr.Partner, Ernst & Young LLPEY Americas Family Office Leader +1 214 969 8321bobby.stover@ey.com

Charlie J. CarrExecutive Director, Ernst & Young LLP EY Americas Family Office Advisory +1 214 754 3280charles.carr@ey.com

Steven L. ShultzEY Americas Director, Private Client Services Partner, Ernst & Young LLP, Tax Services +1 312 879 3183steve.shultz@ey.com

Steps towardeffectiveness

Confidence level

Low Med HighConsiderations

How effective is the tax planning and compliance function of the family office? Are there appropriate plans for preserving and optimizing tax benefits?

Tax compliance

Is there a need for tax-effective techniques to transfer wealth to subsequent generations? What are the long-term implications of the wealth transfer techniques currently in place? Is the family thinking about creating a foundation or charitable institution? Which strategies for charitable endeavors will have the most impact?

Estate planning

How can family wealth best be preserved and increased? Does the family’s investment strategy reflect its basic values? How does the family oversee and monitor its investments?

Investmentadvisory

Is there a clear definition of the reporting the family wants? Do systems require manual manipulation through spreadsheets or other means? Do the systems (e.g., accounting, investment, aggregation) talk to each other?

Accounting,reporting andrecord-keeping

Is there a clear understanding of what services are provided? What services will be outsourced? Which vendors best protect the family’s privacy while helping them achieve their needs and goals? How are costs being charged to the family?

Conciergeservices

What controls are in place for managing cash and processing transactions? How does the office protect the family’s privacy and assets from technology risks? How well does the family self-assess threats and mitigate them? Is the family’s security strategy aligned with business objectives?

Risk management

Is a family charter or family mission statement in place? Is the family struggling to prioritize long-term planning? How is the family balancing and defining the priorities of various generations? What is the family doing to educate the next generation of leaders? How will the growing number of family members impact decision-making?

Governanceand succession