Constructing a Strategic Plan | Generational - Multi Family Office

Constructing a Strategic Plan

Constructing a strategic plan

After GENERATIONAL and the family determines their vision of the family office, the next phase can be described as the design phase, in which a detailed strategic plan will be developed, including the services provided, family office representation, frequency of meetings, the anticipated capital, the breakdown of operating costs, the measurable benchmarks, and the funding to be used.

Other important factors to take into consideration when creating the strategic plan of a family office include:

Family skills

An important question is: do some family members have the right skills and qualifications to participate on the family office? When this decision has been made, the right level of family governance will need to be implemented to deal with the potential tension between family members. The need for family representation is part of the governance structure.

Family business

Families that still own their family business, and may be active managers in that business, face distinctly different issues to those that have sold the business and are managing their private family wealth. In some cases, the company’s chief finance officer, legal counsel or controller, advises the family on estate and investment issues and in others there may be an internal department in the family business that functions similarly to a family office.

The entrepreneur and the family business

Entrepreneurial risk-taking in the family business should generally not be confused or combined with the approach to risk regarding the separated private assets and the private matters of the family. While a complete approach to wealth management across the private and business assets is required, personal affairs should best be dealt with in a discrete entity separate from the business (family office), in order to meet the distinct ownership needs of individual family members. The investment and risk profiles of the family and individual family members should not be overwhelmed by larger corporate priorities, although clearly a total approach to the risk levels on both the business and private sides needs to be ensured.

Operational model

The strategic plan should define the operating model of the family office, its functional setup and infrastructure, reporting and control systems, and the governance structure — including the establishment of the family office members.


The optimal tax regime to operate the family office need to be chosen and planned in detail, based principally on the home jurisdiction of the family and the majority of its assets.

The choice of regulatory and tax issues is addressed in Appendix 1. The most important make-or-buy decisions need to be made by looking at the potential savings if certain services are outsourced and the opportunity costs of outsourcing as against sourcing in-house.

The result of the design phase, in which the strategic plan is prepared, should be a concrete action plan to build and finally set up the family office. All the relevant family members should be asked to commit to the setup of the family office.

The strategic plan should also outline qualitative goals such as:

  • Details on current wealth structure and intended asset allocation
  • Review process evaluating the achievement of the family office’s goals
  • Investment guidelines, expectations for investment returns and benchmarks to be included

The process for setting up and maintenance of a family office

The establishment of a family office includes creation of Your Family Compass – a set of guiding documents, policies and rules dictating how your Family Office will operate:

    • Names of family members | entities
    • Appointment of management team and functions
    • Meetings_venues, frequency and style (virtual &/or face-to-face)
    • Charter
    • Strategic plan
    • Functions (in-house versus outsource)
    • Appointment of professionals
    • Holistic accounting and tax advisory for all assets | entities of the family office
    • Investment Mandate
      • Timeframe for investment decisions:
        • Short term = 20 years
        • Medium term = 50 years
        • Long term = 100 years
    • Consider dividend levels and payout ratios
    • Acquisition and management of private assets

The ongoing maintenance of a family office involves:

    • Family governance and succession
    • GENERATIONAL ‘management mechanism’
      • Manage each function
      • Manage each professional
      • Coordinate professionals
      • Lead the enterprise
    • Mail house (electronic and post)
    • Payment of bills
    • Reporting
    • Protection of reputation | legacy
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