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The current state of play with family offices and structured investments

Family offices are a popular way for high-net-worth individuals to manage their assets and preserve wealth for current and future generations.

Estimates suggest assets under management totalled $1.2 trillion for single-family offices in 2011, while multi-family funds are believed to have reached $777 billion in December 2012. Recent research by Deloitte showed family offices are beginning to invest in a growing number of different product types in an effort to expand their reach.

Elise Elliott, Deloitte private partner, said: "The advantages of the [family office] structure, including direct oversight, customisation of services and privacy, cannot be matched by any other entity." 

However, here at Affinity Capital, we believe that many family offices are missing out on significant opportunities in the structured investments space. While it's difficult to obtain specific data, our estimates put the amount of wealth going into customised and packaged pre-defined investments at less than 3 per cent of total assets.

A large part of the problem is there is simply not enough time for family offices to explore this asset class. They are often responsible for all tax advisory, reporting and record keeping, budgeting, insurance, fleet management, and compliance and regulatory assistance to individuals and families, among other duties.

And this is before family offices have a chance to focus on their core offering – providing portfolio management and investment services. Furthermore, many family offices lack the expertise in-house to effectively handle structured investments. Those that do tend to deal directly with investment banks.

Unfortunately, this means they are not benefiting from independent advice and a choice of products best suited to their needs.

Affinity Capital offers expert guidance on structured investments, underpinned by full transparency on fees, accurate and independent pricing, and access to genuine best execution.

To learn more about our family office services, please read our whitepaper 'Using financial WMDs to your family's advantage' or contact us via email.

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