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Morgan Stanley Launches Single Family Office Best Practices Report in Response to 10-Fold Increase in Family Offices Since 2008

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Morgan Stanley

Morgan Stanley Family Office Resources announced the launch of a new Single Family Office Best Practices report. In response to the ten-fold increase in the number of family offices since 2008, the report provides a broad discussion of best practices that address the key questions Morgan Stanley single family office clients raise most often. The report was conducted by the Firm’s Single Family Office Advisory team in collaboration with Morgan Stanley Wealth Management professionals, including the Family Office Resources team, single family office executives, and the network of preferred providers in the Morgan Stanley Signature Access program.

Even in the best of times, the single family offices that Morgan Stanley serves are eager to discuss new ideas to enhance their performance and efficiency. The global pandemic has presented family offices with complex new challenges and their need for clear and actionable information is exceptionally high. Now more than ever, the firm is receiving questions about the best ways for ultra high net worth families and their family offices to drive mission and impact.

“There is no simple formula to follow when creating or maintaining a single family office. In fact, some family offices are formed explicitly because the existing service models don’t sufficiently address the family’s unique needs,” said Valerie Wong Fountain, Head of Signature Access and Single Family Office Advisory, Morgan Stanley Family Office Resources. “The single family offices we serve are always on the lookout for new ideas to enhance their efficiency and improve their performance, as well as their impact and philanthropic missions, and we are pleased to be able to provide them this report as a resource.”

The guide is divided into six sections, each in alignment with a common area of responsibility for single family offices. For each area, key considerations are raised and best practices are shared.

Mission and Purpose

The report starts with a discussion of the family’s mission statement because the meaningful discussions a family conducts to define its mission often help answer the most critical question: Should you even have a family office? Conversations about a family’s mission can reveal whether family members are best served by conducting their affairs through a shared entity. Once the family unites around its shared purpose, every policy, procedure and practice of the family office can, and should, be evaluated against the family’s mission.

Setup and Operations

Part two discusses the best practices for establishing and operating the family office, including the choice of legal entity, the hiring, compensation and organization of the leadership team and the selection of third-party vendors. Given the realities of dependence on technology, the important topic of cybersecurity is also addressed.

Asset Management

In the third section on Asset Management, the process of creating the family’s investment policy statement is discussed, as a clear definition of goals is critical to long-term success. Other topics addressed are art as an asset class, intergenerational wealth transfer, philanthropic issues and reporting practices and resources.

Financial Administration

Part four of the study focuses on Financial Administration. This section explores issues related to maintaining a healthy accounting, reporting and cash management system that helps protect the family from the risk of mismanagement and even fraud. Other topics addressed include bookkeeping and bill pay services, and evaluating third-party bookkeeping services.

Wealth Advisory

In part five, many wealth management issues that families face beyond investment strategies are discussed. For example, a family’s decision about how to organize its wealth and share it across generations can have huge income, gift and estate tax consequences. Being adequately insured, selecting the most appropriate trustees, and structuring philanthropic endeavors in the most cost-efficient and tax-sensitive manner can dramatically influence the success of a family’s long-term legacy. In families of great wealth, the proper and timely education of next-generation family members can have the greatest long-term impact of all.

Lifestyle Advisory and Concierge

The final section of the report focuses on utilizing Lifestyle Advisory and Concierge services. One of the most powerful benefits of having a single family office is the potential to help family members simplify their personal lives, secure the best health care, help ensure their personal safety and travel in the most convenient and comfortable fashion. A well-organized family office can optimize the many staffing decisions these service choices raise, and leave the family with the freedom to simply enjoy the benefits of their good fortune.

To view a copy of the full report, please click here: https://msreserved.com/article/best_practices_for_single_family_offices

Morgan Stanley’s Single Family Office Advisory, part of the Family Office Resources Signature Access platform, was established to provide unique, customized resources and consulting services to single family offices as well as families who are considering establishing one. The Single Family Office Advisory team leverages Morgan Stanley’s global franchise to help Private Wealth Advisors deliver tailored solutions as well as an expansive a la carte offering which enables single family offices to access everything from a single service to a fully outsourced solution covering asset management, financial administration, wealth advisory, and lifestyle and concierge solutions.

About Morgan Stanley Wealth Management

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, investment management and wealth management services. With offices in more than 41 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

Signature Access Lifestyle Advisory features products and services that are provided by third party service providers, not Morgan Stanley Smith Barney LLC (“Morgan Stanley”). Morgan Stanley may not receive a referral fee or have any input concerning such products or services. There may be additional service providers for comparative purposes. Please perform a thorough due diligence and make your own independent decision. Not all offers are available to nonresident clients.

Morgan Stanley reserves the right to change or terminate the Reserved or Signature Access program or provider offers at any time and without notice. Reserved and Signature Access program participant accounts and activity are reviewed periodically to confirm that they continue to qualify for this program.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning, charitable giving, philanthropic planning and other legal matters.

1 Forbes, The Rise of the Family Office: Where Do They Go Beyond 2019, according to EY estimates https://www.forbes.com/sites/francoisbotha/2018/12/17/the-rise-of-the-family-office-where-do-they-go-beyond-2019/#54108c095795

Source: Morgan Stanley

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