How to Assemble a World-Class Family Office Team

How to Assemble a World-Class Family Office Team

At the level of wealth many business owners play at, it’s crucial to build a family office style team of professionals. You need a comprehensive team for each area of finance, which we call departments, rather than relying on a single professional. Would a good baseball manager rely solely on their starting pitching for all their pitching needs? The same is true for your wealth team. This article will dive into how you can begin to build your very own family office.

View Your Family Office Team in Two Phases

Macro Team

The Macro Team consists of team leaders who collaborate 3-4 times a year together in the same room, to strategize and plan for your optimal outcome. The key teams include:

• Taxes
• Wealth Management
• Protection
• Business

These leaders work together to align their strategies with your financial, business, and personal goals, ensuring a cohesive approach. Who should be the team leaders are found later in the article.

Micro Team

Each team is seen as a department within your overall wealth management structure. The departments or micro teams are filled with specialized professionals who are assembled by the department team lead. Selecting the right team lead for each department is crucial because they are the ones who bring the team together. The Micro Team members communicate regularly to support ongoing needs and execute the strategies devised by the Macro Team.

General Questions for Finding Macro Team Leads

• On a scale of 1-7, how willing are you to collaborate with other professionals?
• How often do you collaborate with your team?
• If they don’t have a team, are you willing to add the missing members?

Specific Philosophical Questions for All Advisors

• What is your philosophy on tax law and how do you apply it to benefit clients?
• What is your investment philosophy?
• What is your philosophy about insurance?
• How do you view my business as a part of my portfolio?

Key Considerations

• Alignment with Values: Ensure they live by the motto: “We are looking to solve something, not selling something.”
• Value Alignment: Their values should align with yours.
• Proven Success: They should have specific examples of client success.
• Team Dynamics: They should have a team.
• Collaboration: They should actively communicate with team members.
• Challenge and Growth: They should challenge you to think bigger.

Role-Specific Questions

Questions for Choosing a Tax Advisor:

• Provide 2-3 examples of how you’ve maximized tax advantages for clients like me.
• How do you mitigate audit risk?
• What strategies do you use for protecting my assets?

Questions for Choosing a Wealth Manager:

• How do you integrate tax planning into your services?
• Who else will be working on my planning?
• What is your approach to balancing risk and return?
• Do you have access to alternative investments?
• Do you have a due diligence team?

Questions for Choosing a Protection Team Lead:

• How do you assess my business risk?
• How do you assess my personal risk?
• How do you minimize insurance costs while maximizing coverage?
• How do you ensure my wealth will continue to grow when I stop working?
• How do you ensure my wealth lasts generations?

Questions for Choosing a Business Asset Team Lead:

• What are the intangible capitals?
• What is your experience with mergers and acquisitions?
• When should a business prepare for an exit?
• Have you ever operated on a board of advisors for a business?
• Do you understand capital markets?

List of Each Team Member and Their Roles

Tax Department:

• Accountant: Compliance officer, files your taxes, co-team lead with the tax strategist.
• Tax Strategist: Co-team lead with the accountant, brings different tax strategies, constructs the tax department.
• Tax Attorneys: Specialists in specific tax strategies, could serve as team lead.
• Research and Development Specialist: Provides tax credits for projects in various fields.
• Cost Segregation Specialist: Accelerates depreciation on real estate properties.
• Empowerment Zone Specialist: Specializes in tax savings for employees in designated zones.
• Employee Benefit Tax Specialist: Saves payroll taxes through employee benefits.
• Captive Insurance or Reinsurance Specialist: Shifts premiums from commercial to private insurance, creating tax savings.
• Registered Investment Advisor (RIA): Expert in tax-smart private market investments.
• Private Placement Life Insurance (PPLI) Advisor: Offers tax-efficient structures and advanced life insurance opportunities.

Wealth Management Department:

• Public Market Investment Specialist: Specializes in stock market investing.
• Private Market Investment Specialist: Offers private market investment opportunities.
• Cash Flow Specialist: Manages business and personal cash flow.
• Retirement Income Specialist: Designs inflation-adjusted income streams for retirement.
• Structured Notes Specialist: Helps you access structured note strategies.

Protection Department:

• Estate Attorney: Specializes in setting up and funding trusts.
• Life Insurance Specialist: Understands various life insurance policies.
• Disability Insurance Specialist: Provides group and individual policies for comprehensive coverage.
• Long-Term Care Insurance Specialist: Offers long-term care options.
• Property and Casualty Specialist: Focuses on coverage over cost.
• Business Insurance Specialist: Collaborates with captive insurance specialists.
• Private Family Foundations Expert: Helps set up private family foundations.
• Trademark/Intellectual Property Attorney: Protects business intellectual property.
• Legacy Advisor: Focuses on building family culture and preserving wealth.
• 6 D’s Mitigator: Monitors and tracks the 6 D’s risk exposure.

Business Asset Department:

• Scale and Exit Coach: Helps transform the business into a valuable asset.
• CFO: Manages business finances, intangible capitals, and projections.
• Mergers and Acquisition Attorney: Handles legal complexities of mergers and acquisitions.
• Search Fund Team: Identifies and vets acquisition opportunities.
• Investment Banker: Manages capital markets.
• SBA Broker Specialist: Guides SBA debt opportunities.
• Business Broker: Facilitates the sale of the business and brings businesses to buy.
• COO: Oversees business operations.

Action Steps

1. Team Assessment: Evaluate your current team and identify gaps.
2. Expand Your Team: Empower your team lead to bring in additional professionals to fill gaps.
3. Regular Meetings: Schedule regular meetings with your macro team to keep everyone aligned with your financial goals.

By assembling a world-class family office team, you ensure that every aspect of your wealth journey is handled by experts working cohesively towards YOUR goals not theirs. This approach maximizes your wealth potential and gives you the permission to leave the generational impact you desire.