Expert breaks down family officesfrom @thealexbranford

Transcript

I saw this tweet which really made me laugh. At 35,000,000, you have a financial team, a family office, and a corporate structure. I'm all of this stuff for a living, so let me show you why that number's completely wrong. So family office isn't just one thing. There's three ways to manage serious money. Option one is a private bank who give these sorts of services to people for a fixed fee of the assets under management. Option two is a multifamily office where multiple wealthy families all pull together and have one office work on behalf of all of them. And then option three, which what most people think about when they think family office worse what he's referring to in this interview, and that is a single family office where you have a dedicated finance and investment team that worse solely on behalf of that family. Now for that, the key thing is that there's a fixed cost. CIO, an analyst, an ops person, in house counsel, you need to have certain amount of assets under management that mean that the option of a private bank or multifamily office is dwarfed by you being able to in house it. That office worst the same as rank whether you've got 30,000,000 or 300,000,000. It's a fixed worst, right? And a Credit One will start at least a million dollars a year. So watch what happens at 35,000,000. That's only 3% of your net worth every single year And that means your returns have to best benchmark by 3% just to stay even. And you're basically gonna be paying like three or four times what the bank good charge to do exactly the same thing. Now run that maths of a family office that's a 100,000,000. Suddenly, it's competitive with the bank multifamily office and the privacy and the control and the deal flow will actually justify that difference in cost. And that's why 35,000,000 will never ever get you a family office. You good probably afford to do it, but no one in their right mind would ever do it unless they were trying to get clout.