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A business run by and for a single family whose sole function is to centralize the management of a significant family fortune. Typically, these organizations house family governance, tax, philanthropic, trust and estate professionals as well as integrated investment and financial planning expertise. A core function of the family office is to effectively transfer established wealth across generations while acting as an inter-generational touchstone for the family's collective values and heritage. The first noteworthy family offices in the United States were formed during the late 19th and early 20th century as a result of the tremendous wealth created during the Industrial Revolution. Four of the most well known of these are the Pitcairn, Rockefeller, Phipps and Carnegie families who made their fortunes in glass, oil and steel, respectively.

The entity is designed to act as a 'for profit' enterprise, with the capital for the enterprise coming from the family's own wealth. This type of operation is in place for most high net worth families.

The family office will invest - either directly or through an open architecture platform - the family's money, manage all of the family's assets, and disburse payments to family members as required. The office itself operates just like a corporation, with a president, CFO, CIO, etc. and a support staff. The officers are compensated as per an arrangement with the family, usually with overrides based on the profits or capital gains generated by the office.

Often, family offices are built around direct real estate or equity investment, professionally managing a large portfolio of real estate or stocks, often both. In addition, a more aggressive and well-capitalized office may be engaged in private equity placement, venture capital opportunities, and real estate development.

If a family doesn't have the time or resources to setup its own family office, many consultancy firms have a family office practice, whereby they run family offices for many firms, providing some economies of scale.This is often referred to as a Multi Family Office.

Other services typically handled by the family office include property management, day-to-day accountingand payroll activities, and management of legal affairs for the family.

• Howard M. Weiss. "The 100-Year Wealth Management Plan" Aspatore, Inc., 2004 ISBN 1596220899
• How to Bank Like a Billionaire Wall Street Journal , June 10, 2004]

Florence W. Kaslow, PhD., "Family Business and Family Business Consultation" The Haworth Press, Inc., (c) 2006

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