Insights
Forging Strong Partnerships: How Family Offices and Trust Firms Can Collaborate Effectively
Victus Search, Multi-jurisdictional Recruitment Partner for Financial Services
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Insights
Read it in 3 minutes
Trusts play an integral role in estate and succession planning for wealthy families, but thoughtfully managing trustee relationships can prove challenging as family offices professionalize. Constructing optimal partnerships between families, their offices, and trust providers requires careful consideration across structural, operational, and interpersonal dimensions.
Many family offices debate whether to handle trusteeship internally or outsource it to dedicated trust firms. Outsourcing provides valuable expertise across jurisdictions, governance, compliance and talent. But some families prefer more oversight and input. This preference has driven a rise in hybrid models like private trust companies with mixed family/professional boards. Legislative changes also enable reserved powers over certain trust functions.
While outsourcing relinquishes some control, benefits include:
When selecting external advisers, reputation, talent quality, expertise breadth, jurisdiction reach, industry recognition, regulatory rigor, and cultural affinity are key criteria. Competitive fees must be balanced with service levels. The difficulty of choosing the right partner shows why outsourcing is often the only viable option.
Yet even with robust structures in place, the human dynamic is pivotal. Family offices can facilitate open communication between beneficiaries and trustees to avoid misunderstandings. Gaining insights into family member personalities also helps select the best-fit trustee. Educating younger generations on trust operations is another key area, minimizing potential rifts and providing succession perspectives.
With the right collaboration, family offices help trustees understand family circumstances and preempt conflicts. Shared learning about trust functions also manages beneficiary expectations and underscores long-term benefits.
For trusts holding specialized assets like operating companies or real estate, family offices can provide commercial insights based on field expertise. They may also handle underlying investment vehicles as general partner, with the trust as limited partner, requiring careful tax planning.
Family offices additionally offer critical guidance on family interactions and dynamics. They can determine the optimal type of trustee for the family’s specific needs and objectives, factoring in technical capabilities, relationship approach, and cultural alignment.
Shared fiduciary obligations provide an underlying alignment for family offices and trustees to act in the family’s best interests. But thoughtfully constructed partnerships take this further through open communication, pragmatic structures, and genuine collaboration. Each party contributes unique advantages that together create an integrated whole exceeding the sum of its parts.
Victus Search helps family offices identify specialized trust and fiduciary experts who understand this delicate relationship. Our networks cut across boutique firms to global leaders with the technical and interpersonal abilities to become lasting trust partners. Contact us to explore your talent needs.
Whether you’re looking to fill a specialist role, or seeking the right position to deploy your unique skills and experience, the first step is to get in touch with one of our expert consultants.
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