When I entered this industry some 20+ years ago, I had just left corporate finance and was looking for opportunities. A former co-worker introduced me to a wealthy family that had developed a successful public restaurant concept.
My friend explained to me that they were looking for someone to run a family office. Now I had no idea what a family office was. I envisioned that it was that desk at the end of many upscale kitchens where individuals stacked their bills or important documents that are in need of attention.
However, in meeting with the family it became clear that a family office was much more than a small desk tucked away in some corner, but the life blood of a family whose complexity and assets had risen to the size and scope they could no longer be easily managed by the family alone.
Wikipedia credits the Rockefellers with the first modern day family office, but I found evidence that the concept of a family office goes all the way back to the early Egyptians.
The first documented family office I could find was in the Bible where Joseph oversaw the affairs of Potiphar, one of Pharaoh’s officials. However, in Potiphar’s days the work of the family office was performed by slaves.
In the Genesis 39 (NIV), we read that “Now Joseph had been taken down to Egypt. Potiphar, an Egyptian who was one of Pharaoh’s officials, the captain of the guard, bought him from the Ishmaelites who had taken him there.”
So in other words, Potiphar bought a slave with the intent of having him (Joseph) work at the family estate. This is the ancient version of hiring family office staff or outsourcing to a group like InTrust Advisors.
Verses 2-4 record “2 The Lord was with Joseph so that he prospered, and he lived in the house of his Egyptian master. 3 When his master saw that the Lord was with him and that the Lord gave him success in everything he did,4 Joseph found favor in his eyes and became his attendant. Potiphar put him in charge of his household, and he entrusted to his care everything he owned.”
This in my mind is one of the first recorded (if not the first) family office!
Oh and by the way, verses 5- 6 go on to say “5 From the time he put him in charge of his household and of all that he owned, the Lord blessed the household of the Egyptian because of Joseph. The blessing of the Lord was on everything Potiphar had, both in the house and in the field. 6 So Potiphar left everything he had in Joseph’s care; with Joseph in charge, he did not concern himself with anything except the food he ate.”
So how does the family office today compare with the family office of Potiphar’s time?
The complexity of today is certainly greater than in Joseph’s time. However the general concept of an individual or group of individuals charged with assisting an affluent or wealthy family with the unbiased management of their wealth really hasn’t changed.
Today, it is still about hiring of professional staff in an expensive single-family office that caters to a single family. Alternatively, its about hiring a firm that is an extension of the wealth management industry that works with multiple affluent families.
If you are struggling to stay on top of your family’s growing assets and ever increasing complexity, maybe we could help you find a little peace of mind the same way Potiphar did when he “left everything he had in Joseph’s care?”
Call us today to set a time to meet or use our contact pop-up to schedule a time.
Other articles you may find interesting are:
“What is A Family Office by Russ Alan Prince” or “Financial Advice, Served Rare” by Julie Steinberg and Kelly Greene