Family Office and Wealth Advisory Service by KU. Kevin Underwood considers itself a modern boutique agency for Ultra High Net Worth Individuals, High Net Worth Individuals, High Net Worth families, famliy offices, wealth management firms and the luxury goods industry. We have been working for these target groups for about 7 years. We have evolved from a pure information, PR and marketing platform to a global consulting and service provider for these target groups.
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Family Office and Wealth Management Service – What you should know
Through an excellent worldwide network of specialists in various fields, we are able to offer our services professionally via local teams on a global scale. Based on years of experience with these target groups, we have been able to develop services that cover all relevant private and business areas of High Net Worth Individuals, the luxury industry and service companies working for this clientele. We perform all services with the utmost care, professionalism, reliability, and complete discretion.
We work hand in hand with our trusted specialists and partners, offering professional project management and an experienced project manager who is available as a contact person around the clock and takes care of all matters. As an independent specialist agency, we also take on sensitive matters and handle them professionally and discreetly.
Family Offices
Initially, the Family Office was known only to a small circle of financial experts and very wealthy individuals and wealthy families. Until 2007, for example, wealthy individuals entrusted their financial affairs almost exclusively to their bank advisor. However, from 2007 to 2009 came the financial crisis and banks suffered a significant loss of trust as a result.
This was about the time when the age of family offices started. But it was not only the loss of confidence of the banks that contributed to this. It was also the concentration of wealth, the desire of wealthy people and wealthy families to tie their finances more closely together in the form of a company to have a better overview and more control. Finally, it also made sense for the whole thing to be managed by an experienced and professional independent bank advisor. In addition, it is also possible to handle family disputes more easily.
How is a family office defined?
Per set there is no definition. A general definition describes Family Offices as an institution whose mission is the individual and long-term management and protection of the assets of wealthy families, high net worth individuals, and seriously wealthy organizations. There are 2 types of family offices known, single family offices and multifamily offices. Due to the above points, the organizational forms and structure of family offices are also different.
The main purpose of a family office is to manage assets and increase wealth. In order to fulfill this task, there are different areas in which they can operate. Family offices are usually individually tailored to the wishes and ideas of their clients. In addition to the core of their task, the following tasks can also be added.
Intergenerational wealth and succession planning, mediation between family members, accounting, tax and legal advice, and investment risk management. To meet clients’ individual needs and individual agendas, family offices hire differently qualified staff and or network with experts to provide other personalized services as well. These include, for example, travel planning for family members, individual assistance with formalities such as health care proxy, household and real estate management, or family foundation tasks.
Single Family Office
Single Family Offices (SFO) exist in 2 variants.
– as an embedded SFO integrated into the family business
– as a company, e.g. a GmbH (limited liability company), managed separately from the family business.
Due to high personnel costs, the establishment of a Single Family Office is only worthwhile from very large family assets of around € 250 million.
Multi Family Office
Multi Family Offices are usually created or developed from Single Family Offices. MFO manage the assets of several wealthy people or organizations. Going to a Multi Family Office makes sense if the individual assets are not so gigantic. You can usually become a client from about 15 million euros. With an MFO manager it is usually the case that the individual support is not the same as with an SFO. Since the MFO manager simultaneously looks after and manages several assets.
Advantages of Family Offices over Banks
The advantages of family offices are obvious. The control of the assets can usually be better controlled. Family offices do not have hidden costs like most banks and when it comes to hidden costs, banks can get very creative. Family offices charge a fee, clearly and transparently. At least that’s what you should do. In principle, there are no competing interests when it comes to investing the assets, if the client has his assets invested by a bank, there may be some overlap of interests.
A family office can also contribute to the promotion of family cohesion and in principle tax the assets more efficiently and individually. This can also result in a better long-term focus on the chapter of the client or clients. But one of the biggest advantages is certainly that a good family office is independent and does not have to obey any corporate directives. The group’s directives can sometimes be unfathomable at least.
Banks do not sleep – banks also offer family offices
Of course, banks realized early on that family offices are attractive to wealthy people and organizations. Therefore, banks started to use the definition “family offices” for their own purposes, since there is no legal definition for family offices. Organizational units quickly sprang up that created family offices for banks as well. Mostly, however, under the term “wealth management”, a unit that looks after wealthy clients, the so-called high net worth individuals and the Ultra High Net Worth Individuals. Both of these terms originated in the banking industry.
High Net Worth Individuals are individuals who have $1 million in investable assets.
Ultra High Net Worth Individuals are individuals who have investable assets of $30 million or more.
Sometimes you will also find the term VHNWI. This term means Very High Net Worth Individuals. These are individuals with investable assets of $5 million.
Assets that cannot be invested (for example, residential real estate) are not counted as investable assets.
Background information on family offices and independent asset managers.
In 2014, the Association of Independent Family Offices (Vufo) was founded in Germany. Since banks, business and tax consultants under the term “family office”, quite like to offer their own products, as I have heard. And this cannot be in the sense of classical Family Offices, which are usually independent asset managers and also corresponds quite certainly not to the origin of this idea.
The most popular investments of family offices as of 2020
According to a study of the Global Family Office Report 2020 by UBS, these are the investments in which they prefer to invest.
| Shares | 29% |
| Bonds | 17% |
| Private Equity | 16% |
| Property | 14% |
| Cash | 13% |
| Other assets | 11% |
Source: Global Family Office Report 2020 UBS
Family offices invest almost one-third in equities from developed and emerging markets. This is followed by investments in fixed-income bonds. Private equity is also a major investment theme. Globally, private equity accounts for 16% of family offices’ investments, of which 7% are private equity funds.
Capital from family offices is also increasingly received by young founders, for their startups, as venture capital. Families with an entrepreneurial background can be at an advantage here, because they can assess the developments, products and services of the founders well from their own experience. Of course, the management performance of a startup is always important and has to be taken into account when investing.
However, it is always in the interest to be involved in technological innovations in one’s own industry at an early stage.
Of course, real estate is one of the most important asset classes for family offices. At the moment, however, we are seeing a decline in investments in office real estate, with more being invested in residential real estate. This certainly has something to do with the inflation trend.
The new challenges of independent family offices and asset managers
The demands of the wealthy clientele have increased. Technology and diversity are the big issues for family offices and asset managers, if they want to stay up to date and attract new well-heeled clients and retain existing ones.
In order to do justice to the ever-growing diversity of the generations that exist today, such as Millennials, Generation Z, women, LGBTQ+ generations and families, which are also changing as a result, it is not only necessary to rely increasingly on digital solutions in asset management, but diversity must also set in among the employees of asset management companies. The big issue for asset managers in the future will be technology and the retraining of employees!
Kevin Underwood Services
With wealthy families, usually, different generations have built the wealth they have today. Of course, there are also many examples of the current generation making a large fortune. But how to deal with assets in today’s world properly, where to invest the assets profitably? Is it invested in a cost-effective way? How do you arrange succession when you want to change or retire? How can I use part of my assets for philanthropic purposes, for example?
Many questions that need to be addressed and this should be done together with experts and specialists, as investments are also becoming more complex.
– Kevin Underwood knows these experts and can make recommendations
– Kevin Underwood works hand in hand with experts and specialists in this field globally
– Kevin Underwood brings investors to interesting investments
– Kevin Underwood connects suitable business partners with each other
– Kevin Underwood provides services for family offices and asset managers as a serious, trustworthy and discreet partner.
If you would like more information, please contact Kevin Underwood. Feel free to use the contact form or send a PM on LinkedIn.
If you would like more information, please contact Kevin Underwood. Feel free to use the contact form or send a PM on LinkedIn.
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