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In our first article of the family office series, we explore the history of the family office and how the evolution of this unique service offering has changed how families manage wealth.

The First Family Office

The origins of the family office began in America in the 19th century by the nation’s wealthiest industrialists, most notably the Rockefeller family. The magnates of the time were dissatisfied with the restrictions and limited offerings by banks and investment brokers; therefore the first family offices were created to manage and preserve generational wealth by creating their own team of experts to oversee the finances of the family. In addition, families also enjoyed concierge services such as travel planning, travel management, luxury purchase assistance, and other services designed to enhance and elevate the lifestyle of the family.

Growth of the Family Office

In addition to thinking about how to divide your assets among stocks, bonds, and cash — the three basic asset classes — consider how your assets are allocated within an asset class. For example, for the stock portion of your portfolio, you could allocate a certain amount to a mutual fund that invests in large-cap stocks, and a different percentage to one that focuses on stocks of smaller companies. Or you might allocate based on geography, putting some money in U.S. stocks and some in those of companies overseas. Bond funds will vary based on the underlying bonds they hold, and are subject to the same inflation, interest-rate, and credit risks associated with them. Those differences will affect a fund’s yield and volatility. Cash alternatives such as a money market fund can be used to park money until you decide how to invest it. Once you’ve covered the basic three asset classes, there may be others that can be used to diversify further.

Modern Family Offices

The family office model has continued to improve through the evolution of technology, financial services, and the growing complexity of the modern wealthy family. No longer are families needing to amass such a large net worth to qualify for this level of service. Using multi-family offices, resources are pooled and efficiencies are created to have a team of experts serve the needs of multiple wealthy families. This allows successful families to enjoy high-level advice, concierge services, and privacy not easily found in the marketplace today.

The modern family office has continued to evolve as the prototypical client has changed. Families who are still engaged in their entrepreneurial journey, have a proclivity to real estate or other non-market-based assets or have liquid wealth which they desire to align generational goals with the values of their family now can rely on a unified team to deliver advice with one goal in mind — the betterment of the family. The idea of the family office remains the highest standard in true family wealth management across the globe.

Our Family Office Offering

Calvetti Ferguson and CF Financial launched a family office offering to provide coordinated, fully-integrated advice and services under the umbrella of a comprehensive team focused on serving the family. By internally coordinating across multiple disciplines, the Calvetti Ferguson family office simplifies life for families while providing crucial, impactful guidance to address the ongoing family needs and goals.

As the complexity facing the modern successful family continues to increase, the Calvetti Ferguson family office is designed to help simplify your life — which can include personal, business, and financial needs. Our team is focused on serving clients in any one or more areas in your financial life. Contact us to learn more about how we can serve your family.