When is a Family Office Right for You?

During the recent EisnerAmper National Virtual Summit Breaking the Rules -- Innovation in Action, Our Partner and Co-Leader of the firm’s Family Office practice, spoke with veterans from different aspects of the Family Office industry.

Ken Drummond, CFO of the Johnson Company, shared his experiences from notable family offices throughout his career including Calvin Klein and Estée Lauder. For Ken, his career began with controlling Calvin Klein’s licensing division and managing the personal finances of Calvin Klein as well as his business partner, Barry Schwartz. This role then morphed into managing the Calvin Klein family office.

Also on the panel was technology expert and Leader of Business Transformation at EisnerAmper. She began her career in tax compliance with the Big Four before moving on to Connecticut to one of the world’s top family offices as their chief of staff.  Within that role She was challenged with strategic operational initiatives, ERP implementations, tax transformation, and implementing new technology related to bill pay, household employees and philanthropic initiatives.

The conversation began with Ken agreeing that the family office, in their experience, is not a one-size-fits-all model. Ken advised “There is a saying in the industry that if you've seen one family office, you've seen one family office.”  Most are created with bill paying services or investments in mind and then build on those services depending on the needs for the particular family. 

Two themes the conversation kept returning to were privacy and efficiency. When asked about the circumstances that lead a family to decide that a structure makes sense for them, Ken advised that most of the time these entities are formed when a company is growing so large that the founders don’t have the time to handle their own personal finances so they look to someone else. This person or team needs to be someone the family can trust and have access to at all times. Having in house-staff who understand the family’s particular goals, financial position, general preferences and values is immeasurable, as it allows the family to feel comfortable and in control of their future even if they are not the ones handling the particulars.

Between the panelists, a variety of matters came up that many might not realize fall under the family office umbrella including:

• Finance organization
• Bill pay services
• Estate planning
• Tax planning
• Household management
• Personal CIO
• Succession planning

When contemplating if a family office is right for you and your family or business, the key take away from this presentation is that there is no rule book. To watch the full presentation on demand, click here.