AUTHOR: DR ALLAN LE ROUX

In a constantly changing world, it is important to plan for the future and especially for the future of your family and future generations. Wealthy families were faced with the challenging task of how to prepare the succession plan and how to preserve wealth for future generations.

During the 1900’s the focus of banks and insurance companies was to get access to family generational wealth and then a market trend was created to break up family wealth into smaller portions and for smaller families to control their own wealth instead of a large group of families. Then those smaller assets were mostly placed with banks, insurance companies and single asset managers or brokers. The result was that family wealth depleted and families failed to do any future planning of portfolios and family wealth was left in the hands of banks and insurance companies with no future planning or succession planning in place.

The volatility in the banking industry and the failures of business with investment fraud, has motivated many families with significant wealth to rather control their own financial affairs and preserve their family future legacy.

While early single-family offices typically transferred the complete wealth to the oldest son this was clearly a mistake in many families that can clearly be traced back to most wealthy families in Europe. It was only during the early 19th century that wealthy merchants along the east coast of the United States started hiring advisors to protect their family interests. The demand for single-family office services kept growing as the number of ultra-high-net-worth wealthy families increased over the years. In today’s times, wealthy families rely on single-family offices for full-time professional management of their family fortune.

The world is facing some serious challenges and it is now more than ever before necessary to focus on sustainability for the future and also future generations. The financial world has become very challenging, over regulated and banks struggle with liquidity to stay afloat. The implementation of Basel III requirements within the banking sector has brought on a number of challenges for banks. Likewise, Basel III introduced leverage and liquidity requirements aimed at safeguarding against excessive borrowing, while ensuring that banks have sufficient liquidity during periods of financial stress.

Therefore, it is very important to ensure your banking partner providing you with account facilities, has enough liquidity to stay afloat and the bank will not lose your cash. Never forget once your funds are with a bank in a bank account you will only be a creditor of that bank and your funds or assets are at the mercy of the officials of that bank. It is therefore very important to choose the correct banking partner.

Another point to focus on is: always remember your funds and your preferred currency of operation belongs to the Central Bank or Reserve Bank who is the issuer of that currency which is subjected to the strength of the economy of that country. You only share in the privilege to use their currency. It is therefore very important to choose the correct location and currency to hold significant assets.

Focusing on the future of your family and future generations it is important to control your own family wealth. A single-family office is an organization that is created to support the financial needs of one specific family. Some of the billionaires who created single-family offices to manage their wealth are, for example John D. Rockefeller (the first American billionaire) and George Soros.

A multi-family office is an organization like Premier Gold Global Wealth that provides family office services to more than one smaller family group. It provides a similar range of customized services as are provided by a single-family office but without the need to set up a separate family office infrastructure. The service provided by a multi-family office becomes affordable for ultra-high-net-worth-individuals with a wealth exceeding USD50 million. Over time, many single-family offices have grown into multi-family offices as they started to accept outside family portfolios.

Examples of multi-family offices includes families such as Rockefeller & Co. which started in 1882 as a single-family office but converted into a multi-family office in 1980, Le Roux Family which started in the early 1800’s, and with Premier Gold Global that started in the 1920’s, all of which manage the wealth of several affluent families.