Empowering the Board to Evaluate Performance

A challenge for many wealth owners is understanding how to assess the costs and value of the family office. This 2012 FOX Fall Forum session provided family members and family office executives a framework to determine and communicate seven critical issues managed through the family officeand featured highlights from the FOX 2012 family office benchmarking study.

Some key takeaways:

• The governing board has a fiduciary responsibility to represent the interests of the ownership group as a whole, including providing oversight of the family office, ensuring management accountability and preparing for succession
• Fewer than half (42%) of all family offices create an annual report
• A little more than a quarter (27%) have a risk management process in place
• Most participants report younger generation family members do not engage beyond attending meetings
• The median asset growth rate (after taxes and fees) year-end 2011 was 3.0%, which matches the 2011 median spending rate
• Respondents listed compensation and benefits as the largest cost of running their family offices, accounting for 60.3 of their budgets
• A majority either have a training and development plan in place for their family office employees or are in the midst of developing one