Bill Tyne, executive vice president of U.S. multi-client family office Bessemer Trust, says that very wealthy European families are more likely to use a family office rather than go to a large institution. A family office is owned and run by families for their sole benefit and no-one else's. Family offices are nothing new. They came to the fore as moneyed American families such as the Rockefellers, Mellons and Du Ponts drafted in full-time professional advisors to manage their personal fortunes separately from their business interests. But the idea also has a heritage in the highly personalized service of traditional European private banks and businessmen responsible for running the large estates of the landed aristocracy.
Some families have so much wealth to manage, they hire a permanent, in-house money team.
Examples in the U.K. include the Grosvenor Estate, which has managed the Duke of Westminster's interests in property for more than 300 years. During the past century, some family offices have opened their doors to more than one family. Bessemer Trust now manages the affairs of some 1,300 families. Many private banks, and legal and accountancy firms have also started to offer their own institutional versions of the family office. Swiss private banks Pictet, Julius Baer and Union Bank Privee and Germany's Deutsche Bank, for example, all offer their own variations on the family office theme.