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Structures

At the beginning of its relationship with every one of its asset management clients, including ultra-high net worth investors, the advisors and consultants at Dreyfus Corporation meet with the investor to gain an understanding of the investor’s assets, investment experience, goals for wealth creation and management, and desires for controlling that wealth within a bespoke family office structure.

We review the financial position and management of family-owned businesses that are often a significant component of a high net worth investor’s portfolio. When we are satisfied that we have a comprehensive understanding of the client’s circumstances, we form our recommendations for the most effective family office structure that will best serve the client’s goals and needs.

Many of our investor clients will elect to develop a family office around one of three basic family office types:

The Embedded Family Office (EBO)

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EBOs are less formal structures that are established within the corporate form of an individual’s or family’s business. An EBO is most beneficial for families that include private assets as part of their family business. The EBO structure enables a trusted employee, such as the family business’s chief financial officer or some other employee who has demonstrated reliability and loyalty in the oversight of the finances of a family business, to manage and curate those private assets. The EBO structure needs to clarify how that employee can simultaneously serve the family business CEO and the interests of the owners of those private assets.

The Single Family Office (SFO)

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SFOs are standalone legal entities that are formed to serve the needs of one and only one family. Dreyfus Corporation will frequently recommend an SFO when one generation within a family business is approaching retirement age and is seeking to pass control of the business on to younger family members. The SFO can also serve a family's desire to gain greater asset diversity that extends beyond the family business and to control the family's exposure to breaches of privacy or confidentiality and other legal matters. Ownership and management of the SFO are typically confined among family members. This form of SFO is fully involved and engaged in the management of all of the family's assets, including investments, trusts, and estate plans. Some families incorporate concierge services into SFOs to serve the personal needs of specific family members.

The Multi Family Office (MFO)

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As the name implies, MFOs serve the needs of many high net worth individuals and families at the same time. The families that are under an MFO management structure do not need to be related to each other, although they are frequently characterized by familial relationships. MFOs generally provide the same slate of services that are offered by SFOs. They can be organized as commercial enterprises that sell services on a subscription or a la carte basis to a select group of families or a broader ultra-high net worth investor base. MFOs can establish strong economies of scale for the services that wealthy individuals and families generally require. MFOs are most effective when they serve families that have common characteristics or cultures.
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