When aspiring accountants envision their future work, they may imagine working in an accounting firm that handles the financial affairs of many different clients. They probably don’t think immediately of another type of accounting career: one spent in a family accounting office. The professionals working in a family accounting office handle the accounting needs of a very small number of exceptionally wealthy clients.
Types of Family Accounting Offices
There are two types of family accounting offices, according to Forbes. Some family accounting offices, called single-family offices, manage the accounting needs of a just one affluent family.
The organization of single-family accounting offices can vary widely, from small investing firms to fully-staffed, full-service firms offering a wide range of accounting and financial services. Forbes reported that as many as ten thousand single-family accounting officers might exist, and their numbers continue to grow.
A second type of family accounting office, called a multi-family office, isn’t dedicated to one single family. Instead, its clients comprise a small group of families – made up, again, of the very wealthy. These firms use their financial expertise to manage the wealth of their affluent clients. Clients of multi-family offices tend to expect more personalized solutions and a swifter response from their accounting professionals than the majority of clients would look for from a traditional accounting firm.
Family accounting offices provide a variety of services to their exclusive group of clients. They assist with investments and wealth planning. They may also handle administrative support tasks like paying bills on behalf of their clients.
Why Family Accounting Offices Are Growing
Across the nation and the world, the number of family accounting offices is on the rise. Despite the turbulent nature of the economy in recent years, the wealthiest families have largely remained successful, some even increasing their wealth. While client demand may certainly play a part in the increase in family accounting offices, the eagerness of accounting professionals and accounting firm owners to open family accounting offices likely plays a role, too.
Focusing on the needs of a small but prosperous group of clients can increase an accounting firm’s profits, helping the firm to grow, Forbes reported – which may explain why many existing accounting firms are now operating dedicated family accounting offices. These firms can take advantage of the family accounting office model to build a more recognizable reputation, charge higher fees for tasks outside the range of typical accounting services and collect even more money in retainers. Family accounting offices do face challenges, however, so they must be run capably. For example, the accountant-client relationship is especially important in a family accounting office, since these organizations have so few clients to begin with.
Though they provide services to only a small number of clients, family accounting offices are highly profitable. Their customized services meet the needs of their elite clientele, and the profits that these offices bring in through retainers and other fees help the accounting firm as a whole to thrive.