For the super-rich establishing their own family offices, the challenge of delivering every service at the highest levels of expertise cost effectively has led toward strategic outsourcing. This can be seen in many ways, from the use of outside money managers to the heavy reliance on outside counsel for advanced planning services.
Another variation of this move to outsourcing is the outpost family office, an emerging trend where a family office in one geographic region creates a joint venture with a family office in a different geographic region. The outpost family office proves especially attractive when children of the family are staying in foreign countries.
There are a number of guidelines to make an outpost family office especially successful:
- Ensure a matching philosophical approach to serving the financial elite.
- Guarantee appropriate knowledge transfer.
- Specify the level of effort and scope of work.
- Adopt a reasonable compensation model between the family offices.