“The family office is a dedicated solution for the complex management of the family wealth. It is a vehicle that supports the family in the day-to-day administration and management of the family’s affairs and long-term strategy.”
- Definition of a Family Office extracted from an Article issued in 2020 by Deloitte Private.
The concept of a “Family Office” is not new – wealthy families have employed experienced professionals to help manage their wealth and day-to-day affairs for many centuries.
However, in Europe over the last 20+ years an exciting shift has occurred – family offices have become an entirely new class of investor, neatly filling the gap between private clients and institutional investors. Indeed, many hedge funds and private equity managers have a strong preference for this “quasi-institutional” type of investor as they are sophisticated enough to expertly screen and select investments, but sleek enough to act swiftly and make effective, prompt decisions.
As family offices have grown in popularity, size and profile, so have the types of ways in which they can be organised. There are, in essence, three different types of family office model:
• The full service single family office (SFO) – where all essential services are performed in-house, with only peripheral services outsourced to external parties. Individuals are employed directly by the family or their controlled entities.
• The financial services multi-family office (MFO) – where client assets under management are aggregated and invested according to the MFO strategic view of investment markets. Services other than investment management are typically handled by external parties.
• The outsourced family office solution – this is an optimal solution for families who do not wish to operate their own single family office with the responsibilities that this entails (employment of staff, management of premises and IT etc), but would like some level of investment autonomy.
HIGHVERN excels in providing platform solutions for Outsourced Family Office Services. Having provided wealth planning and governance services to wealthy families for over 50 years, taking on the role of outsourced family office provider is a natural extension and a consolidation of the essential client / trusted adviser relationship.
The major advantages of outsourcing your family office services to HIGHVERN are:
• Operational efficiencies – you and your family will save valuable time and effort delegating routine tasks to a firm who understands how to execute them and that is built to do so.
• Cost efficiencies – having all family administrative tasks with one outsourced provider will prevent duplication of effort, the costs associated with rectifying a missed or delayed task, and create cost efficiencies year on year as the core team become more familiar with the regular activities. We operate a structure which allows the simplest tasks to be assigned to the most junior members of staff, managing the cost profile of the service delivery.
• An institutional approach – a properly and thoughtfully designed family office solution will bring organisation and order to your family’s financial affairs and provide a professional platform from which you can launch new investment ideas, control costs and plan ahead.
• Discretion – your affairs will be handled with utmost discretion by a small number of dedicated family office professionals within HIGHVERN who will ensure very high levels of confidentiality.
HIGHVERN adopts a “top down” approach to family office services. This ensures that the objectives of the family remain core to the design of the service design, ensuring a bespoke, tailored solution which allows the family to ensure they are paying for services that they truly value.
We work with you and your advisers to understand what the family vision is, what values the family strongly identify with, and what you feel is the purpose of your wealth. Who will it support, what will it be used for and where do you envisage the family and its wealth will be in the future? This will allow you to decide how the wealth will be invested, what governance mechanisms you will put in place and what benefits the family will intend or expect to derive from the family office activities.
This then translates into the blueprint concerning what you will need from your Outsourced Family Office – what type of assets you intend to invest in for financial gain (public & private markets, crypto currencies, hedge funds etc) and what kind of assets the family will own for pleasure or convenience (real estate, aircraft, motor vessels, vehicles etc) and how the returns from the former will support the costs of the latter and other living expenses of the family members.
At its simplest, the wealth can be held by the family in personal names – however your advisers will often recommend that a proportion of the wealth be held in vehicles which promote smooth succession planning for wealth transfers (such as trusts) or vehicles which protect your financial position by providing limited liability to external parties (such as companies). This structuring is usually based on your family’s individual circumstances and will take account of the jurisdictions that you reside in now, intend to move to in future, and the locations in the world in which you intend to invest.
The first step in implementing the family office solution that you have designed is for you to give permission for HIGHVERN to act as your family’s agent. This ranges from being appointed as signatories on your personal bank accounts, being nominated as your tax compliance agents, first point of contact for bankers, lawyers and investment advisers, and being appointed to manage your wealth structure as discussed above.
We will work with you to establish the expected activities and deadlines that we are expected to manage across the year. This can be tax return deadlines, dates that private equity draw downs need to be made, key dates for payments to family members, investment performance reporting dates and many other such matters. We will agree a format of reporting for the completion of these activities so that you have full visibility on our activities and the successful completion of the agreed milestones.
The blueprint that you set during the planning process will give a high level indication as to what income expectation you have and what expected costs you expect the asset base to cover. If required, we can translate this into a profit and loss forecast to show what asset returns are likely, what costs are expected, and what the impact on the core capital is likely to be. We can report back to you periodically on the income or costs profile and focus on particular areas of concern (e.g. household spending, investment costs, family travel expenses etc) to give you the visibility that you would like and the ability to control the income and costs more effectively.
Most of our outsourced family office clients require actual financial reporting on a real-time basis – net asset statements showing the entire wealth base of the family and how it is deployed, and cash reporting showing inflows, outflows and the liquidity position at a given date.
Once mandated, we can take care of the administrative actions that would otherwise come to you for action, some examples are:
• Employment and payment of household and office staff members.
• Maintenance costs for family assets such as real estate, aircraft and motor vessels.
• Tax payments.
• Responding to capital calls on committed investments.
• Payment of living expenses.
• Stage payments for construction of capital assets such as real estate under construction.
• Engaging with philanthropic activities that the family supports and reporting on impact of donations made.
• Liaising with family businesses & making agreed financial support payments / tracking incoming dividends or capital receipts.
• Acting as directors and officers of entities which engage in any of the above activities.
Families who use a range of service providers, and who do not maintain a family office, often find that their key documents are spread across a number of different locations (lawyers, family members, personal safes) and it can be frustrating finding such documents at short notice when a key transaction requires them. HIGHVERN often maintains a central register of key documents, including the location of the hard copy original, with soft copies available to you via a secure portal.
The orderly and transparent Outsourced Family Office design and implementation process allows HIGHVERN to create a transparent and reliable fee profile. Most clients ask for a fixed fee for the fixed expected annual activities, with an agreement that additional “out of scope” services will be billed on top, based on pre-agreed rates per hour.
We do not take any commissions or retrocessions from any of the family office activities that we undertake for our families –the only fees that we earn are those paid by you. In this way we align our objectives and aims with that of your family – as you thrive in delivering the results of your ambitions, we earn fees as your trusted business partner.
HIGHVERN is an award-winning fiduciary and fund services provider; a fully independent, owner-managed business with over 50 years heritage, renowned for our integrity, discretion, and responsibility. By working towards a shared vision of delivering value without adding to complexity, HIGHVERN has obtained a first-class reputation for providing wealth structuring, administration, governance and advisory services to an international client base comprising fund managers, financial institutions, corporates, high net worth individuals and family offices.
Incorporated in 1969, Highvern was one of the earliest firms to begin building the Jersey financial services industry into what it is today. After a long history under the ownership of one of Britain’s most prestigious international private banks, Highvern was acquired by its management team in 2016. In 2017 it launched a boutique-style fund services, focused on setting a higher level of standards in the industry. Today Highvern now has offices in Jersey, Guernsey, Switzerland, Dublin, Cayman Islands and London as it continues to offer a wider proposition to meet the complex wealth solutions of HNW individuals and corporate clients.
Naomi was called to the English Bar in 1999 and re-qualified as a Jersey Advocate in 2003. As a former Partner at law firm, Appleby, Naomi provided wealth-structuring advice to high and ultra-high net worth individuals, international private banks and trust companies. At HIGHVERN, Naomi works closely with clients and their advisers to establish and implement robust and sustainable wealth planning structure. Naomi is a member of the board of HIGHVERN Trustees Limited and former Chair of the Society of Trust and Estate Practitioners (STEP) in Jersey.
Kerrie was admitted as a Solicitor of England and Wales in 2008 and called to the Guernsey Bar in 2009. She has practised as a senior lawyer in several leading offshore law firms, most recently as a Partner at Bedell Cristin. Following this she ran her own boutique private wealth legal practice for two years, specialising in legal services for fiduciaries and private clients. Kerrie has extensive experience of advising on complex, high-value structures, including trusts, foundations and corporate entities, set up by HNWIs and entrepreneurs.
Richard qualified as a Chartered Accountant in 1997 and holds an MBA from Warwick University. As well as having expertise in financial accounting and strategic financial planning, Richard has devoted the last 20 years of his career to the Family Office sector. He was the Director of a prominent Single Family Office from 2002-2012 and led the Multi-Family Office division of a prominent international fiduciary services firm from 2013 to 2021, dealing with Ultra High Net Worth individuals and their families. He has specific expertise in private equity, luxury assets, cryptocurrencies and philanthropy.
Roger joined HIGHVERN as part of the acquisition of Genesis Trust & Corporate Services Ltd. in 2022. He qualified as a solicitor at Linklaters in 1998, working in Hong Kong from 2001 to 2003, where he became appointed Managing Associate. Roger has worked with a number of blue-chip financial clients on both contentious and non-contentious matters, including transactional and corporate governance work, in both London and Hong Kong. In 2003, he moved to the Cayman Islands where he was admitted as an attorney, advising on fiduciary matters, including both fund and trust structures, and representing clients before the Grand Court of the Cayman Islands. In 2010, Roger joined Genesis Trust & Corporate Services Ltd.
