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How Family Offices Increase Productivity by David Skriloff

How Family Offices Increase Productivity by David Skriloff

For wealthy households, complexity is an everyday fact of life. Between their possessions, activities, relationships, and other facets, there is an overwhelming amount to coordinate, plan for, and organize. This is especially important for families with the long-term goal of building a successful enterprise to pass down through the generations.

However, a structure exists that can streamline the management of a family’s assets and improve the effectiveness of their endeavors.

A Guide by David Skriloff

According to David Skriloff, a family office is an independent business that acts as a hub to coordinate and provide various services for a wealthy family. Many ultra-wealthy people could use the help of a family office as their affairs become more complicated and their transactions become more numerous.

The goal of a family office, much like that of a well-run business, is to manage the myriad financial, legal, and other matters of a wealthy family in a streamlined and organized fashion.

There are many ways in which families can increase their productivity by working with a family office:

Risk Management

Due to a centralized structure, family offices can better manage operational risk and streamline business processes.

David Skriloff points out that this facilitates better decision-making on the part of family office proprietors, which in turn aids in the achievement of their own or their families’ investment goals. Risks are reduced when individuals or groups work together.

A family office’s focus may be narrowed to a single line of business or spread out across many.

Financial Benefits

A family office may save money over not having any family organization. This assumes the family’s wealth is sufficient to pay for the office’s costs. Finding the right mix between a small, dedicated internal team and external advisors/experts is often necessary.

David Skriloff says that due to the low marginal cost of adding another family member to many activities, a family that monopolizes the management and supervision of assets through a family office can reduce duplication of efforts and increase productivity.

You can save time and money by investing in a single large account rather than juggling several smaller ones, and you can use this leverage to negotiate better terms.

Goal Achievement

When a wealthy family establishes a formal family office, its members are more likely to have frank discussions about their values, priorities, time horizons, and risk tolerance regarding their wealth and business.

By establishing a set of guidelines and using an investment governance system to monitor performance, families can better achieve their most vital objectives by making well-informed investment decisions.

Having a strategy and a system improves a family’s odds of amassing the wealth they seek. A family office helps members recognize, react to, and make course corrections by incorporating a feedback loop, reporting, and investment control.

David Skriloff’s Final Thoughts

A large sum of money enables one to participate in many of life’s most rewarding activities and experiences.

However, David Skriloff shares that behind the scenes, these multi-generational families face financial and administrative challenges that can cause them to spend a great deal of time managing the day-to-day, coordinating with a wide variety of advisors, and, in many cases, dealing with inter-generational challenges.

Managing a family’s wealth is complex, and a family office can help.