The flexibility of the Single Family Office arrangement is its greatest strength—and its greatest weakness. Because the definition of a Single Family Office is often unclear, it's easy to make mistakes in the setup process that can jeopardize the long-term success of the arrangement.
Common Mistakes to Avoid
Although every Single Family Office is unique, there are four common mistakes one must avoid:
- Failing to view your Single Family Office as a real business. To be effective, your Single Family Office needs to be treated with the same respect as your other business ventures. Treating it as an afterthought sets it up to fail. A small Single Family Office that is well-run can produce an abundance of benefits relative to its cost, but a large, costly organization can easily fail to meet expectations if it is not given the tools it needs to succeed.
- Selecting a poor management team. Your Single Family Office needs strong leadership. This includes hiring a skilled team of professionals as well as allowing one or more family members to assume a supervisory role. Additionally, you must keep in mind that level of oversight required increases with the complexity of your personal and professional needs.
- Having unrealistic expectations. The services of a Single Family Office can be personalized to fit individual needs, but there will always be cost and time considerations. Making sure everyone is on the same page about what services are the most important helps things run smoothly.
- Letting disagreements fester among family members. It's vital that you gather your family members together to determine the role, scope, and mission of the Single Family Office before it is formed. When one member expects additional control or services, this creates unnecessary conflict. Remember, the goal is to streamline your finances and your life—not to add additional stress or hardship. Once the Single Family Office has been created, continued updates for all involved family members will help foster engagement and understanding.
Get the Advice You Need to Create a Successful Single Family Office
The best way to set your Single Family Office up for success is to work with a skilled attorney who understands your unique needs as a Mexican or Latin American investor. Our international business planning attorneys can help you determine what services you wish to have your Single Family Office provide and guide you through the process of forming this business arrangement. We speak your culture, so contact us today to get started.