Hello, it’s Richard Wilson. I’m here in Berlin, Germany in front of the Reichstag, and I’m here to meet some Family Offices and speak at a local event on Family Office investments and say I want to talk to you real quick about the trend of Virtual Family Offices. This is something really important to me because it’s not only something that’s not talked about in the industry very much, but it’s something that I have been asked to provide to a couple of families and have them help get set up.
Basically a Virtual Family Office is a Family Office solution that is unique to one family, typically, and really allows different experts to provide a holistic Family Office service, yet not be under the same physical roof. So you might have a a state attorney in LA, another legal attorney for contracts in Chicago. You might have a CIO, chief investment officer in Denver, and somebody that helps with real estate purchases in Portland, Oregon.
And so with all those different mix of an experts, you don’t have to employ them full time. Through a Virtual Family Office you have a platform and technology that allows them to communicate, talk to each other on a weekly, maybe by-monthly or monthly basis and make sure that all the ducks are in a row and that everybody is having an open line to communications much more than if you didn’t have a Virtual Family Office set up. If you just have a CPA with a wealth management firm and someone that are and not used to talking to each other regularly, then a lot of things can be dropped and lots of tax consequences can be missed. And a lot of long-term planning for different generations could be not completed.
So, through this model, the advantages are, you get more holistic service, you get more people talking to each other more often, and you usually can invest in a more wide variety of assets and have more assistance in doing so. The disadvantages is, not everybody’s in the same office. Typically the people are not working only for you full time, so you only get a percentage of their time. And the other disadvantage is that there’s not many people offering a Virtual Family Office service. You really have to put it together yourself or, if you need help, contact me and I can help you get in touch with some people that can be helpful.
And the last piece I wanted to leave you with is just that the whole reason why a Virtual Family Office exists is that lots of times if you have 20 million dollars, 50, 100, 150 million dollars, it’s not really worth it to set up your own single family office in some cases. So this is a in-between solution for people who don’t want to join a multi-family office, but they also don’t want to start their own full-fledged single family office because of the cost. Through a Virtual Family Office you can get access to great talent at a relatively low price, and that’s really what’s driving demand for these Virtual Family Office services.
I’ll follow up this video later on this week while I’m here in Germany with a video on outsource chief investment officers and that trend, because it is related but different, and I hope you find that video helpful as well as this one. So it’s I, Richard Wilson, coming to you from Berlin, Germany, and the Family Offices Group, and I’ll talk to you again soon.