Introduction to outsourcing for family offices

From accessing specialised expertise to improving efficiency and reducing costs, outsourcing offers numerous benefits to family offices. Read our latest insight to learn more about the functions they outsource, the benefits and drawbacks, and key considerations for a successful outsourcing experience.
family office outsourcing

What you need to know

  • Family offices outsource to access specialised expertise, increase efficiency, and reduce costs.
  • Commonly outsourced functions include investment management, advisory services, accounting and financial reporting, software and IT consulting, and compliance and regulatory services.
  • While there are some drawbacks, the benefits of outsourcing include accessing expert talent at cost-effective rates. Thorough due diligence and clear service level agreements are essential for a successful outsourcing experience.
Operations Updated on January 16, 2024

Bernard Arnault’s recent real estate purchases in the United States have been making headlines. Interestingly, his family office uses the services of BFKN, a commercial real estate and business planning legal firm, to handle their real estate dealings in the region. BFKN is the primary North American real estate counsel for Bernard Arnault, Groupe Arnault, LVMH, and the LVMH brands in the Americas.

In this insight, we explore why family offices choose to outsource, what and who they typically outsource to, and how to determine which services are suitable for outsourcing.

Why do family offices turn to outsourcing?

Family offices often outsource to access specialised expertise, increase efficiency, and reduce costs. Although internal staff may handle day-to-day operations, sometimes external skillsets are required to handle special situations.

A recent research report by Ocorian showed that a significant proportion of family offices already rely on third-party support. The report revealed that 63% of family offices use third-party assistance for managing illiquid assets, such as private equity, while 60% seek help with personal financial management for family members. Additionally, nearly half (48%) receive support for liquid investments.

The study also found that outsourcing allows family office professionals to improve overall service levels (71%) and focus on their core strengths (59%).

Who and what functions do family offices outsource?

There is no shortage of service providers available to family offices. In fact, as the industry grows, more and more financial institutions are opening up segments of their businesses to offer customised solutions for wealthy families.

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