Single-Family Offices Feel Effects of Dodd-Frank: Study

Dodd-Frank abolished the private advisor exemption for family offices, and required the SEC to come up with a new family office exemption. This applied to offices with only family clients and only family owners.

Among the SFO study’s findings:

• Only 38.2% of family offices surveyed had a succession plan even though participants considered succession a primary challenge
• 66.7% of participants said they had sufficient expertise to evaluate investment vehicles and strategies
• 35.3% outsourced the chief investment officer function to handle their investments
• 51.5% reviewed investment policy or practices, up from 39.5% last year; and 27.3% actually changed investment policy
• 20.6% said a family member had been a victim of identity theft via the Internet
• 11.8% said a family member had been a victim of burglary or robbery
• 12.1% of family offices employed a security consultant.

Family offices participating in the new survey, the alliance’s fifth, comprised a total of 544 households, with a median of 16 households served. They had been in existence for a median 28 years, and served from one to five generations.

A family member was CEO of 47% of the offices surveyed.