Why It Pays to Separate Corporate Finance Teams from Your Personal Family Office by Heath Standorf, CPA
Posted on September 23, 2025
by
Heath Standorf
As family principals continue to grow their businesses and their wealth, they often establish family offices to centralize and streamline the administration and management of their lives, including financial and non-financial assets. Initially, business owners may entrust these duties to their corporate finance teams. However, there comes a point when more time and specialized skills are required to look behind the numbers, act quickly on opportunities and comply with ever-changing financial compliance requirements. This is when families should consider hiring dedicated staff or outsourcing their family-office functions to a team of professionals with a broad range of expertise.
Corporate CFOs understand your business and the way it generates income for you and your family members. Over the years, they have garnered your trust and likely developed a keen appreciation of your values, your tolerance for risk and your plans for creating a legacy for future generations. These characteristics make corporate CFOs ideal candidates for managing family offices in the early stages of wealth accumulation. Yet, as your wealth grows, the complexity of your personal and business structures, investments and assets changes along with your family’s unique needs and goals. What may have begun as financial wealth management may now require a longer list of tax and succession planning, philanthropic giving and personalized concierge services for multiple generations.
The amount of time and expertise required to manage the diverse, yet equally critical, responsibilities of a growing business and an evolving family can escalate rapidly, exposing both to numerous risks. The following are some key issues to consider when determining whether it is prudent for your corporate finance executives to handle the needs of your growing family office.
Tax and Estate Planning
CFOs possess a broad set of skills needed to manage a company’s financial operations on a day-to-day basis and plan strategically for maximum efficiency and profitability in the future. However, for tax purposes, corporate needs and goals do not always align with those of a family office, where tax minimization, wealth preservation and risk management are paramount.
For example, a company is generally focused on tax efficiency from business operations. In contrast, a family office concerns itself with tax-efficient wealth planning and preservation to support the current and future needs of the family. Moreover, while CFOs may be well-suited to engage in succession planning from a corporate perspective, they may not recognize or employ any of the various structures and estate-planning tools required to minimize the family’s estate tax exposure and ensure tax efficiency in the transfer of business assets to future generations.
Investment Portfolio Oversight
Some essential responsibilities of a family office are to develop long-term investment objectives that support liquidity management and holistic goals for the family; oversee and aggregate reporting to track the performance of stocks, bonds, real estate and alternative investments to meet family members’ needs for growing and preserving wealth while minimizing risks; and timely communicate these metrics to family members with accuracy and attention to detail.
Relying on corporate finance executives for these tasks can present several challenges. Your tolerance for risk and the array of investment options available to your family are likely different from those of your company. There may also be issues when the family’s investment needs and goals conflict with those of the company and its operations, including those that involve family members and corporate shareholders or when a business must reduce staff or sell off an operating unit to meet the family’s greater financial goals. Finally, there are not enough hours in the day for a corporate finance team to stay on top of tracking personal and business investments and reporting both to various and distinct categories of stakeholders, including family members, shareholders, employees, bankers and lenders.
Cash Flow and Treasury Management
As previously noted, there are times when corporate finance executives will have conflicts of interest in their roles and responsibilities to the company and to the family office. For example, both the company and the family office require the accurate tracking and management of liquidity through cash management, bill payments, debt servicing and investment oversight. However, corporate decisions are more likely focused on short-term cash flow required to fund ongoing operations, whereas family offices are more concerned with cash needs to support lifestyle spending while maximizing investment returns over the longer term.
Separation of Duties and Privacy
Strong internal controls are a business’s best defense for ensuring the accuracy and integrity of its financial reporting and protecting its assets and information from risks of fraud and conflicts of interest. They act as a series of checks and balances to detect and prevent adverse business outcomes that can arise when one person has too much control.
The same is true for a family office. Systems, policies and practices should be employed to monitor all financial transactions and ensure that no one person has the power to make all financial decisions. Instead, a series of approvals and reviews should occur before anyone accepts or processes payments, thereby protecting personally identifiable family data and minimizing risks of theft and erroneous reporting.
Along the same lines, there are times when you will not want a corporate employee to know the inner details of our personal finances, including your spending patterns, investment strategies and your ultimate exit strategy. Similarly, you should consider the risks and consequences of your CFO becoming intimately involved in your family affairs, especially when the CFO works alongside family members.
Key Person Risk
One of the primary reasons family offices choose to outsource is to tap into the knowledge and experience of external professionals across a broad range of disciplines. It also minimizes key-person risk arising from the reliance on one or two individuals to handle all your family office needs. What would happen if those people left the company for a better position, retired or became ill and unable to continue serving the needs of the family office? How much time and value would you lose searching for a replacement?
Outsourcing protects family offices from these risks by offering a dedicated team of professionals with a broad depth of expertise and experience across a range of disciplines, including investment management, tax planning and reporting, estate and succession planning and even lifestyle management. What’s more, you can pick and choose which functions you want and need to remain in-house, and which are better suited, more cost-efficient and more easily scalable under an outsourced arrangement.
About the Author: Heath Standorf, CPA, is director of Family Office Services with Berkowitz Pollack Brant Advisors + CPAs, where he helps high-net-worth individuals, families and closely held businesses streamline wealth planning, treasury and risk management, data reporting and analysis. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or info@bpbcpa.com.
← Previous
