After many years of advising Malaysia’s richest entrepreneurs and business owners, I have noticed that many people excel at creating wealth, but most fail to maximise and preserve this wealth for the benefit of their descendants and heirs.
In an effort to solve this incongruity, I figured that it would be wise to learn from good examples, and decided to study the secrets of wealthy dynasties, such as the Rockefellers, as well as the nouveau riche like Bill Gates and Michael Dell.
What I found is that the super rich have a common formula for successful wealth management: the Family Office. Typically, they rely on family offices, which are essentially companies dedicated to providing integrated wealth maximisation services for high net worth families. By using either dedicated single-family offices or multi-family offices that serve several families, they inculcate the business approach, infrastructure, systems and personnel used in their bread-and-butter companies in their wealth management.
In other words, they have “business-ised” their wealth management, which is the central pillar of effective wealth maximisation. This makes sense because every family has the essentials of a business – income, expenses, assets and liabilities. When you manage your wealth like a business, you will connect your wealth management to the underlying principles of successful business management and transform your dysfunctional wealth maximisation into functional wealth maximisation.
In The Family Office – How the super rich maximise their personal wealth by managing it like a business and how you can too, my aim is to show Malaysia’s high net worth families that the family office is an ideal vehicle for maximising and preserving wealth, whether for their children, their grandchildren or their great-grandchildren and beyond.
Chances are that if you are a member of the ultra high net worth club, you probably own a company or run your own business. Since this would take up a large chunk of time, it would be virtually impossible for you to deal personally with all the different dimensions of wealth management, such as money management, risk control, taxes, charitable concerns, business planning, next generation issues and retirement planning, to name just a few issues.
This is where the family office comes in handy. In essence, the family office works with clients to create a tailor-made multi-dimensional strategic plan that addresses all the different aspects of wealth management, which becomes more complex and time-consuming as your wealth and tax brackets rise. The family office also coordinates numerous experts in key areas like investment management, insurance, banking, charitable giving, tax and estate planning, removing the headache of administration while leaving the reins of control and important decision-making in your hands. In other words, the family office allows you to business-ise your wealth maximisation in order to achieve the vision and mission that you have determined.
The family office is a tried-and-tested solution, as attested by its dynamic history as well as the real-life case studies in The Family Office which show how long-lasting super-affluent dynasties in the United States have used different versions of the family office to improve and simplify their wealth management in the last century.
By applying the principles in The Family Office, you will be able to get started on using a family office in order to manage wealth with minimal personal involvement on your part, while enjoying maximum professionalism and control. In order to help you out further, I have provided several checklists and questions that you should ask your family office service provider in order to guide you in selecting the one that fits you best.
Ultimately, using a family office simplifies all the pieces of the wealth management puzzle so that you can focus on what is really important in your life – your family, your hobbies, your work and your philanthropic interests. After all, wealth is supposed to ease your life, not complicate it further. By making a paradigm shift in wealth management and embracing the family office concept, you could bring greater fulfillment and enjoyment to your busy life.