Richard Wilson creates and manages single family offices for ultra-wealthy families. He also is the founder of the Family Office Club with membership of over 1,500 families of similar net worth totaling over $1 Trillion in Assets. He started off doing risk consulting out of college and joined the angel investing and capital raising world before positioning himself as the thought leader on family offices.
If you listen, you will learn:
- What is a family office
- The different types of family offices
- How to create a family office to manage your wealth and business
- Benefits of a holistic wealth management solution
- Importance of building a platform business expanding on your niche
- How a family office can reduce chaos and stress
Family Office Defined
There wasn’t a ton of knowledge being shared on family offices and Richard saw an opportunity to fill that gap. He saw the extreme benefits of creating a family office for wealthy families. For these individuals, even a 1% mistake on their finances or taxes can be very costly.
Family offices are private wealth management firms that provide a more complete, holistic wealth management solution. They manage everything that affects a family’s balance sheet. They don’t just look at stocks, bonds, market exposure, etc. – They essentially manage everything in your life that has anything to do with finances and investments.
Richard talks about three different types of family offices – single family offices, virtual family offices, and multi-family offices. He works with single family offices for the ultra-wealthy individuals working with families worth $50 million up to a couple billion! Single family offices are set up for just the wealth creator and their family. A single-family office has a staff that only serves that family all day long unlike the other two options.
Family Office Deal Flow
As previously stated, a family office manages to a family’s balance sheet. A family that has this high of net-worth usually has a portfolio including real estate investments, different businesses, and other assets. The office manages all of the family’s deals, income, and cash flow. They help mitigate risk and losses rather than just chasing returns.
The family office staff has to understand the goals of the family. Usually the wealth creator of the family is passionate in a certain industry where they have built-up industry experience and connections. It is important that the family office has excellent deal flow within their niche industry. Richard explains the staff should continuously be looking at deals and making decisions that will “sweat for you (the family) day in and day out” without too much oversight.
“People need a family office if they want to reduce chaos and stress, have a more holistic mindset and oversight on their assets and their service providers that are serving them, define their strike zone and their goals more, organize and prioritize their deal flow, and then as a result do all that so they have less taxes, less fees paid hopefully, as well as better returns because you are more focused and organized in what you’re doing. A little formalization can save a lot of time and grief,” explains Richard.
Selling to a Family Office
When selling a business, people sometimes do not think about selling to a family office. The reality is family offices buy companies all the time. There is a lack of knowledge of where to find a potential family office buyer and the benefits this kind of sale may provide.
There are many benefits to selling to a family office. The long-term view is not just about the numbers like a financial firm. These families have deep resources and industry connections. They usually have knowledge and experience in the industry you are in if they are considering acquiring your company. Family offices usually stick with investments in a niche or that make sense in their portfolio. They could help expedite the growth of your company with their relationships and connections in the industry. Richard asks, “Do you want family office strategic money or dumb money.”
Should you have a family office or possibly sell to one? Check out the podcast to find out how and hear more tips from Richard Wilson.
Contact Information and Bio for Richard:
Company Website: www.familyoffices.com
Company Facebook: https://www.facebook.com/familyofficeclub/
Family Office Podcast: http://familyoffices.com/podcast/
Richard C. Wilson helps $100M+ net worth families create and manage their single family offices and currently manages 14 clients including mandates with three billionaire families with a total of $5B of buy-side advisory mandates in place. Richard is also the founder of the Family Office Club, the largest membership-based family office association (FamilyOffices.com) with over 1,500 registered family office members.
Richard has spoken at over 150 conferences in 17 countries, has the #1 bestselling book in the family office industry, The Single Family Office: Creating, Operating, and Managing the Investments of a Single Family Office and a recently released book called How to Start a Family Office: Blueprints for Setting Up Your Single Family Office. Richard has his undergraduate degree from Oregon State University, his M.B.A. from the University of Portland, and has studied master’s level psychology through Harvard’s ALM program while previously residing in Boston. Richard currently resides 10 minutes from downtown Miami on the island of Key Biscayne, Florida with his wife and three daughters.