The Multi-Family Office

A Vehicle of Choice for HNI and UHNI Families and their Businesses

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Family businesses are made up of complex webs of personal and professional relationships that are precariously entangled. And there comes a time in the life of every family-owned enterprise when the financial needs of individual family members become as important as matters of succession, wealth preservation, business control, and asset division. To manage all these macro and micro issues surrounding HNI & UHNI family businesses, there is the need for a single entity with a comprehensive strategy towards wealth management. This is where the role of a multi-family office (MFO) comes to the fore.

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Traditionally, Indian family-owned businesses are tight-knit groups that rarely allow external entities to be privy to internal financial decisions. However, things are slowly changing because the younger generation now has increased exposure to the wealth management practices of family offices abroad.

How does a multi-family office help preserve a family-owned business?

On the face of it, a typical multi-family office only takes care of the personal financial affairs of the family/business heads and other members. However, it is this individual management that leads to collective harmony and allows for a family business to thrive. A large number of family-owned businesses meet an early demise due to improper wealth management, lack of succession planning, or generational dispute over property and money. A multi-family office can avert the risk of such a scenario by ensuring that the financial affairs of each family member are kept in order, thereby preserving the family unit as a whole.

Multi-family offices services that can help businesses to thrive in challenging times

  • Integrated wealth management platform: HNI and UHNI families usually work with multiple advisors such as CAs, wealth managers, tax planners, investment advisors, and many more. However, there is a lack of coordination and communication between all of these individual entities. Thus very often, it falls onto an HNI to coordinate and peer through endless reports from various advisors. A multi-family office takes responsibility for this; they take over the coordination and streamlining of the process, and ensure that all information is consolidated for reporting to the family.
  • Full suite of services under one roof: Most family offices are founded by former entrepreneurs who have extensive experience in the financial sector. Hence, they create large teams of diverse professionals who are the best in their field. From tax planners and wealth managers to succession planning and legal experts, family offices have them all under one roof. The sharing of best practises across different verticals and clients makes sure that FOs are always on top of their game when it comes to helping HNIs and UHNIs manage their financial affairs.
  • Individual VS family: This is a salient yet often underrated service that a family office provides. A business family consists of individuals with a diverse set of financial and non-financial needs that may often be at odds with the family. A multi-family office expertly understands these needs and works with the individual family members in a holistic manner to ensure that these needs are being catered to in a harmonious way.
  • Mentoring the next generation: Preparing the next generation of leaders in a family is tricky territory. From motivating them to take on the family business to helping them manage their wealth wisely, there is a lot that goes into their grooming. Family offices specialize in mentoring the next generation and can help them to learn about their role in the family business.
In the years to come, India’s expanding pool of HNIs and UHNIs will fuel the need for comprehensive wealth management entities such as family offices. In a recent joint report released by Praxis Global Alliance India and 256 Network, it is estimated that by 2024, we will have a community of close to 10K UHNIs, this includes business leaders, celebrities, NRIs, and tech entrepreneurs with a cumulative wealth that could reach $700 Bn. This in itself tells us volumes about the growth of the family office landscape in India.
Rajmohan Krishnan

Written By

Mr. Rajmohan Krishnan is the Principal Founder and Managing Director of Entrust Family Office Investment Advisors. As the Executive Vice President until 2012, Raj led the team of Kotak Wealth Management across North and South India Regions.