A family with substantial assets rarely suffers from a shortage of advisers. By the time anyone draws the organisation chart there is usually a private bank, sometimes two, a corporate lawyer, a notary, a tax adviser in each country where something is held, an accountant for the operating business, an insurance broker and possibly a real estate manager. Each of them is competent. Each is doing what was asked. And nobody, including the family, can say with confidence who is responsible for the questions that sit between them.
The failures that follow are not dramatic. A filing deadline is missed because each party assumed the other was watching it. A property is bought through the wrong entity because the lawyer drafting the purchase was never told what the holding structure was for. A currency exposure runs unhedged for two years because the bank hedges what is on its own platform and half the assets are not. None of these is anybody’s fault in a way that can be pursued, which is exactly the problem.
What each party is actually paid to do
The starting point is to be precise about the mandate each adviser holds, because clients routinely assume a broader one than the engagement letter describes.
A private bank is paid to hold assets and, where there is a mandate, to manage them. Its duty runs to the account, not to the family. It knows what sits on its own platform and it does not know what sits anywhere else unless somebody tells it.
A lawyer is paid to advise on a defined matter. The engagement letter names it, and everything outside that description is outside the retainer. A firm that drafted the shareholders agreement three years ago is not monitoring whether it still fits.
An accountant is paid to prepare and file. Preparation is reactive by design: the work is done on the figures presented, in the entities identified, on the calendar the law imposes.
A tax adviser answers questions. The quality of the answer depends almost entirely on the completeness of the facts supplied, and the adviser has no way of knowing which facts were withheld.
A family office, whether internal or contracted, is the only participant whose mandate is the whole picture. Where there is no family office, that mandate is held by nobody, and the family is performing the function without having decided to.
The bank’s role stops earlier than clients assume
Private banks present themselves as advisers on wealth in general, and much of what they offer has genuine value: credit, market access, execution, custody, reporting on the assets they hold. The boundary is easy to state. The bank sees its own relationship. It does not see the operating company, the property held in another country, the loan from the shareholder, or the second bank.
This matters most for three things. Consolidated risk, since concentration cannot be assessed from a single slice of the portfolio. Currency, since hedging decisions taken against one account may be redundant or contradictory once liabilities elsewhere are included. And credit, since a lending decision taken on incomplete information about the family’s other commitments serves neither side.
There is also a structural point that a client is entitled to keep in mind without any suggestion of bad faith. Part of the bank’s revenue depends on which products the family holds, and the choice between selling an asset and borrowing against it has a revenue consequence for the institution recommending it. That is a reason to obtain the second opinion elsewhere, not a reason to distrust the first.
The lawyer answers the question that was asked
Legal advice is bounded by its instructions, and the failures here almost always follow from an incomplete brief rather than from poor drafting. A lawyer instructed to acquire a building will acquire the building. Whether it should sit in that entity, whether the financing should come from the holding company or from a bank, whether the acquisition triggers a filing obligation in a third country, and whether it disturbs a structure built for succession are questions that arise only if somebody raises them.
There is a coordination point specific to cross border families. Each jurisdiction’s lawyer is right within her own system and cannot be expected to anticipate the interaction with the others. A will drafted correctly in one country can conflict with a shareholders agreement drafted correctly in another. Somebody has to hold both documents at once, and it will not be either of the two firms unless one is explicitly instructed and paid to do so.
The notary and the auditor are not on the family’s side of the table
Two participants are regularly misread, and the misreading causes friction every time.
A civil law notary is not the family’s adviser. In the Netherlands, for example, the notary is appointed by royal decree under article 3 of the Notaries Act (Wet op het notarisambt), and article 17 of that Act requires the office to be exercised independently, looking after the interests of all parties to the legal act impartially and with the greatest possible care. The office is a public one, owed to the transaction and to the integrity of the register, which is why the questions asked before a deed can be executed are exhaustive and why they are not negotiable. Families that experience this as obstruction have misunderstood the role. Families that prepare for it treat the notarial file as a checklist to be assembled in advance, which is also the cheapest way to handle it.
An auditor, where one is required, owes a duty to the users of the accounts rather than to the shareholders individually. Information given to the auditor is given for that purpose, and an auditor who identifies a problem is obliged to pursue it regardless of whose year it complicates.
Both parties are useful precisely because they are independent. The coordinating role includes making sure the family understands that before the first difficult conversation rather than during it.
Where the overlaps are, and what they cost
Overlap is less dangerous than gap, but it is not free. The recurring ones are worth naming.
Tax advice arrives from three directions at once: the accountant on the operating company, the bank on the products it sells, and the tax adviser on the structure. Where these are not reconciled, the family receives three partial answers and chooses between them without a basis for the choice.
Reporting is produced by everyone. The bank issues statements, the accountant issues accounts, the property manager issues its own schedules, and the family receives several documents that do not reconcile because they are drawn to different dates on different bases. The family then either builds a consolidated view itself or stops reading.
Compliance requests are the most visible overlap. Each institution runs its own identification and source of funds procedures, and the same documents are assembled repeatedly for different recipients in slightly different formats. A single maintained file, held centrally and released as needed, converts a recurring irritation into a routine one.
The gaps, which are where the losses happen
The gaps are less visible and considerably more expensive. Five recur.
Nobody owns the calendar. Filing dates, renewal dates, option expiries, loan maturities and the annual formalities of each entity exist in different places, and an entity struck off for a missed administrative filing is a genuine and avoidable event.
Nobody owns residence. Family members move, and a change of residence can alter the treatment of a structure that nobody thought was connected to that person. The move is usually reported after it has happened, if at all.
Nobody owns the consolidated position. Each adviser sees a portion, and questions about total exposure to a sector, a currency or a counterparty simply cannot be answered.
Nobody owns the documents. When a bank or a counterparty asks for the current articles, the shareholders agreement and the ownership chart, the family discovers that the definitive versions are in three different offices.
Nobody owns succession. Every adviser assumes another is dealing with it, and it is the one item on the list with an unpredictable deadline.
Somebody has to hold the whole picture
The conclusion is unavoidable. Coordination is a role, not a by product of hiring good advisers, and it has to be assigned to a named party with a written mandate and a budget.
That party can be an internal family office where scale justifies it, an outsourced office or an independent adviser retained for the purpose, or a designated family member with the time and competence to do it properly. What does not work is leaving it implicit, or assuming that the largest adviser will absorb it because the relationship is important to them.
The mandate should be explicit about four things. Maintaining the complete inventory of entities, assets, liabilities and documents. Owning the calendar. Being the first call before any transaction, move or family event, so that the question of consequences is asked before rather than after. And instructing the specialists, which includes telling each of them what the others are doing.
Setting it up in practice
The mechanics are not complicated, and most of the benefit arrives in the first quarter.
Begin with an inventory: every entity, every account, every property, every loan, every policy, with the adviser responsible for each and the annual cost. Families are frequently surprised by both the number of entities and the total of the fees.
Then write the map. One page, listing each recurring decision and naming who decides, who is consulted and who executes. Circulate it to the advisers rather than keeping it internal, because the value lies in each of them knowing where their boundary is and who sits on the other side of it.
Then fix the reporting cycle. A single consolidated statement on a fixed date, prepared by the coordinating party from the underlying sources, in one currency, on one basis. This is the deliverable that makes the arrangement visible to the family.
Then set the meeting. Once or twice a year, with the principal advisers in the same room and an agenda circulated beforehand. Advisers behave differently when they know their counterparts will be present, and the meeting itself surfaces the assumptions that would otherwise remain unexamined for another year.
None of this requires a large organisation. It requires that the coordinating role be given to somebody by name, in writing, with the authority to ask every other adviser what they are doing and the standing to be answered.
This article is informational. It does not constitute investment advice, an offer, or an invitation to invest, and it is not a financial promotion. Regulated activities are carried out only by appropriately licensed parties.