DS9 Document EFTA00597590

Aff Family office design and setup Our approach to designing and delivering family office services is rooted in a review of eight key areas that, if addressed effectively, determine long-term success. The major advantage of this approach is the way we scrutinize subject areas with a holistic view to operational, regulatory, tax, strategic and family-related aspects. This enables us to uncover hidden opportunities and risks, which might have been missed if we were to examine each area individually. Why set up a family office? 1) Your family and business are growing, and your business staff are distracted by supporting family needs. 2) You have a liquidity event, such as selling the business. There are many reasons why setting up a family office might make sense. Below are the advantages and concerns most frequently identified: Advantages • Maintain family cohesion • Maximize privacy and control over assets • Manage family risks • Support family entities and investments • Service family houses and other holdings Concerns • Cost of family office setup and operations • Complexity of market, legal and tax infrastructures • Difficulties in identifying and managing staff • Obtaining expert advice across a wide range of topics Types of family offices: A family office can take many forms. As family wealth increases and business needs get more complex, the family office may evolve from a simple founder's office into a complex, full-service company. And the office could revert over time. Founders office: Embedded: A Compliance or tax Often an assistant or shareholder services office: A CPA-led a few staff members group, handling the office that oversees who pay bills, make family's personal investments travel plans and financial affairs as and takes care of handle the financial well as corporate record-keeping, needs of the founder duties insurance and tax returns Investment management office: In addition to accounting services, manages private equity investments, hedge funds and more; may seek to manage money for outside families as well Full service office: For the most complex scenarios, this may be a private family trust company providing a variety of services: family education, tax, investment, governance and accounting, usually across multiple generations EFTA00597590 Our approach EY has examined global family offices to understand what makes them successful in the long-term. Our professionals take a holistic view of the family, strategic, operational, regulatory and tax aspects in order to help the family move toward their long term legacy. Evaluate/assess Scope and purpose Design/innovate O r Business plan P OP Source and build Execute/implement Prepare and test 10 1 Launch • Vision and expectations • Define who is part of the family • Identify the family's key values • Define family office services • Describe the family office's purpose and long-term goals • Legal structure • Identify in-source vs. out-source services • Operational and technology requirements • Identify people, technology and facilities • Governance for family and the office • Family office budget • Funding and cost allocation • Job descriptions • Technology platforms and support • Vendor contracts • Facilities • Processes and work flows • Detailed governance framework • Implement governance • Test systems and processes • Consider disaster risks (cyber, theft, controls, etc.) • Begin family office operations (phased) Develop communication and review processes • Ongoing monitoring and review • Policy and procedure • Participate in manuals networking opportunities processes • Periodic risk reviews • Review/refine from outside advisor financial models • Ongoing strategic planning • Final review of Scoping study approach Identify and present strategic and tactical framework options Business and operating model alignment Operating model assessment "Develop" instead of "Build" Present assessment and business case Program management Interested? Please contact EY's Family Office Advisory Services for assistance with strategic planning for your family. Robert (Bobby) A. Stover, Jr., Partner EY Americas Family Office Leader Private Client Services I Family Office Advisory Ernst & Young, LLP I *1 214 969 8321 Jeffrey H. Brodsky, Partner Private Client Services Ernst & Young, LLP 1+1 312 879 3871 EY refers to the global organization. and may refer to one or min, of the member firms of Ernst & Young Global Limited. each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit MI Jon Carroll, Executive Director Private Client Services I Family Office Advisory Ernst & Young. LLP 1+1 561 955 8240 Paul McKibbin, Executive Director Private Client Services I Family Office Advisory Ernst & Young, LLP 1+1 215 448 5420 Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. 6)2016 Ernst & Young LLP. All Rights Reserved. SCORE no. YY3758 BSC No. 1606-1971228 PAW ED None WISISSISI EFTA00597591