6 REASONS YOU NEED A FAMILY OFFICE CFO
Do you own a family business? Here’s why you should consider seeking the advice of an independent family office CFO.
A family business is unique in that it consists of two separate but connected elements: business finances and family wealth. An independent family office Chief Financial Officer (CFO) will be your professional advisor in both, guiding you in the management of your business and the guardianship of your family’s wealth. Here are six ways you’ll benefit from the expertise of a family office CFO on your team.
1. Financial and commercial expertise
When running a family business, it is critical to have an experienced CFO who can provide focus, expert advice and attention to detail over the long term. Whether you are starting a new business or running an established operation, a family office CFO will help your business flourish. They can help you expand (organically or through acquisition), raise debt, secure investors or list on a public exchange. They will also ensure your business and family wealth is safeguarded through best practice governance and compliance, as well as oversee independent audits and reviews. This gives your family the freedom to focus on core business activities in their area of expertise.
2. Bringing your vision to life
Your family office CFO will take the time to understand your short, medium and long-term goals for the business and your family. They will identify risks and opportunities, as well as harmonise the connections and planning between businesses, entities, owners and investments. This provides you with clarity about the future and delivers a roadmap that will get you there. As someone who shares your values and knows your business and family well, your CFO will have your family’s interests in mind first and foremost, guiding you towards decisions that will help you achieve your goals.
3. Strategic planning and reporting
An experienced CFO will provide regular reports and insights on your financial affairs, with a consolidated summary that is easy to understand and gives you all the information you need to make better financial decisions. They will have a deep understanding of your business enterprises, private investments and philanthropic activities. As your business grows and assets increase in value, strategic planning becomes a critical component of your business approach and wealth management. This big picture thinking and attention to detail will not only ensure your business continues to grow, but your family continues to thrive.
4. Coordinating other advisors
While many advisors are experts in a particular area, such as law, tax, banking, estate planning or property, a family office CFO has a holistic knowledge of your financial affairs and can guide and synchronise the advice and activities of other advisors. They will manage information flow between your advisors and family, coordinate the advice provided, review recommendations and help your family make the right decision. Your CFO will also ensure the recommendations of your advisors are implemented correctly, managing any compliance and documentation required. This supports and reduces the burden on your family, so you have one point of contact for all financial advice.
5. Improving financial literacy
As your business and family wealth grows, they become more complicated and difficult to understand. However, it is vital that incoming or maturing family members understand the financial complexities of your business and family wealth, and have access to an expert who can provide coaching or mentoring in commercial and financial arrangements. This is particularly important as technologies and markets change, as what worked well for one generation may not work for another. A family office CFO will enhance the financial literacy of your family, providing them with the skills and knowledge they need to build and protect their wealth for future generations.
6. Keeping the peace in your family
One of the best reasons to hire a family office CFO is to enjoy peace of mind when it comes to managing financial affairs with your family. Your CFO will offer an independent voice to help your family wade through delicate matters, such as legacy planning and wealth management. They will take the time to understand your family and work closely with them to achieve their individual goals, while also considering the needs of the family and business. As your family grows and changes over the years, you will have a consistent source of expertise and support, so you don’t need to worry that your finances will impact the relationships you have with your family.