Locating Family Offices: The Benefits of the Bahamas and Switzerland

The location of a family office can play a key role in how effective that office is at managing family wealth. International legislation such as permanent establishment regulations and controlled foreign company rules determine the opportunities for the office to be able to structure the wealth of a client in the most beneficial way, accounting for numerous factors including tax liability, immigration, and residency. The PDF attachment contains an overview of the services provided by a typical family office.

Any high-net-worth individual or family should consider employing the services of a family office to help manage their wealth. Family offices and the solicitors who work there have the specific expertise required to manage their requirements, providing a complete solution for wealth management that includes investment advice but can also handle a range of non-financial issues for the household.

Attorney-at-law Dr Edgar Paltzer provides a second opinion service for family offices on legal matters and is experienced in succession planning for family establishments. The Bahamas is one of the world’s most popular locations for the modern family office, offering numerous advantages for long-term strategic financial planning.

Wealth Management: The Family Office 

A Growing Business in the Bahamas and Switzerland

The Bahamas and Switzerland offer several advantageous opportunities for family offices to be able to assist their clients in wealth management in the most beneficial way. These jurisdictions have direct proximity to several of the world’s leading financial hubs with direct flights to major cities including London, New York, Toronto, and Miami.

The region also provides opportunities for families and wealth advisers to be able to purchase property or take up residence in the area if it proves financially advantageous. The regulatory and legislative regime in the Bahamas and Switzerland allow for full compliance with financial regulations while creating the most efficient and effective family office structures. There are multiple skilled professionals working and living in the Bahamas and Switzerland, creating a pool of readily available experts in financial planning and all legal aspects of wealth management.

The infographic attachment details the world’s largest family offices currently operating, ranked by total assets under management.

The World’sLargest Family Offices by Assets Under Management

The Cost of a Family Office

The structure of the family office required depends mainly on the value of the assets to be managed, the volume of work required, and the attendant cost. As a general rule of thumb, effective wealth management services should cost around 1% of the total value of the assets being managed.

A family requiring somewhere in the region of £20 million in assets to be administered may find it more financially beneficial to have a small in-house team employed to manage the day-to-day administration and bring in third-party advisers or specialists as and when required.

A family with £20 billion may find it more financially viable to have everything done in-house. Bringing in third-party advisers can also expand the breadth of knowledge available to the team – a single in-house lawyer may only specialise in certain areas, while having a team of external legal representatives that can be called upon increases the scope of the work that can be done.

Having a single comprehensive structure dedicated to the wealth management of one family (or several individual families) helps ensure affairs are kept stable, obligations are met, and evolving opportunities are spotted and taken.

A broad definition of wealth management services can be found in the short video attachment to this post.