Tp prepare for that possibility he suggested that family offices take a deep dive into how they conduct business and make decisions. They need to document everything, he said, including who they invest with, what they invest in, their job functions, and their insurance policies.
Internationally, the Middle East and other jurisdictions are ramping up their scrutiny of family offices, observers noted.
“Regulation is only going to go one way and that is going to be an increase,” said Lucia Perchard, head of family office at Bermuda-based Apex Group. “We are seeing greater and greater drive in terms of changes in the law, legislation and regulation around family offices and I don’t think that is going to stop.”
She added that increased restrictions and other requirements can make it more cumbersome for those who are operating in multiple jurisdictions.
“They need to make sure that in every jurisdiction that they are working in, that they understand exactly what those requirements are and what they must do to ensure that they meet them and do not breach them,” she said.
In addition, family offices have been struggling to find qualified people to fill various roles such as chief executive officers, chief financial officers, chief investment officers and lawyers.
John Elmes, head of single-family offices at Los Angeles-based Pathstone, said family offices are looking for people with the right experience for these positions.
Another problem with family offices is that, because of long relationships among staff and family, loyalty can sometimes get in the way of best business practices, Wright said. There have been cases of family office employees taking advantage of loyalties to steal money, he said.
“That’s the downside of relying on loyalty instead of using astute business practices,” he said.