Family Office Navigator

The first wave

The fourth wave

Family Office Navigator | 41

In ancient Rome, influential families employed a senior staff member to manage the family’s affairs. The “major domus” – supervisor of the household – was the highest ranked servant and acted on behalf of the owner of the residence, taking charge of the administration of the estate. This is one of first traces of a formalized governance and administrative role in the context of affluent families with the actual mandate to “keep the family’s house in order.” It wasn’t called a family office at that time, but some of the core principles of modern family offices can be traced back to those early days. The second wave When English noblemen joined the Crusades during the Middle Ages, they left behind estates and family wealth for unpredictable periods of time. To manage these responsibilities in accordance with the wishes of the absent head of the household, trusts were developed as an important tool for inter-generational wealth transfer. This led to a split between the roles of the legal owner and the beneficial owner, with the legal owner being the “trustee” and the beneficial owner being the “beneficiary.” Modern versions of these original trust structures are used frequently around the globe today. The third wave The first formal family offices emerged in the 19 th century during the Industrial Revolution as newly wealthy entrepreneurial families such as the Rockefellers and Morgans sought effective ways to manage their wealth and business empires. This led to the creation of structured offices, such as the House of Morgan in 1838 and the Rockefeller Family Office in 1882. Some of these family offices still exist today and have evolved into financial powerhouses – both for the founding family and other unrelated families.

The fourth wave gave rise to a number of variations in the family office model. For over a century, the original formal offices remained in place, following the same principles of setup and governance: one family with a private family office to cater to its needs. In the second half of the 20 th century, some of these “single family” offices opened their doors to other unrelated families and became “multi family” offices, in part to defray the costs associated with increasingly sophisticated financial services. of a wide array of vehicles that cater to the varied needs of modern-day family enterprise ecosystems. Modern family offices are more professional and specialized organizations that have been shaped by the digital revolution, globalization, and the rise of the Asian economy, among other trends. In fact, we refer to the “uberization” of the family office, with the emergence of hybrid family offices, sometimes also called “virtual family offices” or “family-office-as-a-service.” The hybrid approach serves the holistic needs of the family by a network of providers, possibly combining in-house and external services. Since then, the concept of a family office has evolved further. The first decades of the 21 st century have led to the evolution