The title may puzzle some readers. Why would a “mindset” shift” be required of a wealthy family to form an effective, sustainable, single-family office? Here is why!

Newly formed single-family offices begin in a variety of ways. One is from the staff of the primary business owned by the family. The accounting team at the business is often called upon to work on family matters in addition to doing the accounting for the business. Other professionals, often in the operations of the family business, are similarly called upon to help in the early stages of the family office. The “mindset” of the family remains that the so-called “family office” is merely an adjunct of the primary business, rather than a distinct entity requiring a separate vision, governance structure and staffing decisions. So what changes that perspective?

At some point, it becomes clear that the accounting staff of the business cannot effectively serve both the needs of the family’s growing wealth and a thriving business as well. Thus, the idea emerges of forming a separate single-family office apart from the primary business of the family and the new entity is implemented. Setting up the family office in a separate office space, not in the building of the family business, often precipitates the process of the “mindset” shift.

The separation of the family office from the family business gives rise to some perplexing questions.

  1. Who will lead the newly formed separate family office? Will one or more of the existing leaders of the family business also lead the family office?
  2. If family business leaders decide to delegate family office leadership, to whom will they delegate the responsibilty?
  3. What qualifications, skills, and experience will be required of the family office leader? Is there a different family member who can take on the leadership role either as the leader themselves or as primary family liaison to the family office leader?
  4. What kind of governance structure and processes are required in the family office in order to make it an effective presence in the family?
  5. What are the qualifications, skills, and experience required of the individuals who staff positions in the family office? Will all family members be considered for employment in the family office, or will certain family members be excluded from employment consideration due to a lack of credentials and experience?

These are all compelling questions that must be resolved in order to make the separate family office viable as the primary vehicle for the propagation and sustainability across generations of family wealth.

The “mindset” shift occurs when prominent family members begin to think of the management of the family office entity first. It is a subtle shift, but one that is critical to the viability of the family office due to the fact that the family office broadens one’s thinking about family wealth from a focus on a single business to a wider set of considerations. Philanthropy often leads the way. Other matters contributing to a broader perspective include:

  1. Desire on the part of other family members (often younger ones) to start businesses in other industries beyond the primary family enterprise;
  2. A family foundation to promote some social contribution initiative;
  3. Generational attitudes and values that differ from one generation to another which are best resolved within the family office setting as opposed to the family business venue;
  4. Managing multiple and sometimes unique real estate assets;
  5. Managing private aircraft, vehicle fleets and other wealthy assets;
  6. Managing estate and trust planning initiatives for the family to perpetuate family interests.
    If an entity chooses to not address these issues, it often leads to the failure of the family office as a viable presence.

If you are a family business leader thinking of forming a separate single-family office, please contact Douglas Kennedy at or 415-770-3840.

Douglas Kennedy, CFO, Family Office Practice Lead

Doug has years of experience working with ultra-high net worth families and the issues that confront them. He designs and leads the implementation of solutions for single-family offices. From the foundation of accounting and reporting processes to the broader needs of organization, staffing and governance, he has experience in formulating workable solutions built around the objectives and values of a family and its vision for multi-generational contributions to society, Doug shepherds clients through a comprehensive process geared toward achieving and sustaining success of the family office.