A private family office is one in which a family’s wealth is managed and accounted for. Often, this office has a range of services provided to a wealthy family, and assist in managing the accumulated wealth of this family. Having a private office is often more cost effective than hiring a professional firm of Certified Public Accountants as well as separate financial investment advisors.

A private office will provide investment advice for a wealthy family and will enter and select investments that benefit this family only. This is often a better route than using an investment advisor, as the in-house investor can become more familiar with the family’s risk tolerance and can understand the range of investments that the family currently has. This way, the family can have their investments effectively managed, without that investment advisor being distracted by other clients. They will also track the cost basis, any gains or losses, and assist in planning for filing income taxes on behalf of the family members. In addition, the private family back office will track partnership basis and provide insight on what tax benefits can be derived from holding onto a position or selling it prior to the end of the year. Private offices will also pay bills for family members and allow them to concentrate on enjoying both their lives as well as the benefits of being wealthy. They will file tax returns and make strategic investments to lower taxes or to diversify risk.

Wealthy individuals should not have to manage their own finances, and often don’t have the expertise to do so. Hiring a CPA firm can be costly. Generally, depending on the level of wealth accumulated, a private back office will provide the benefits of expertise and value to a wealthy family.