It’s always fascinating to know how the rich manage their money. But money is not the solution to all your problems. That’s why the many rich entrepreneurs and business families appoint family offices to manage their wealth. A family office is a highly-specialised advisory firm that gives financial planning advice to entire families that come with a large net worth and needs continuous monitoring.
And it’s not only investment advice; family offices also look into how money is to be bequeathed among second and third generations to avoid any potential family disputes, goals and aspirations of each of these family members are accounted when the joint family finances are looked into.
In this podcast, Moneycontrol’s personal finance editor, Kayezad E. Adajania speaks to Rajmohan Krishnan, Principal Founder and managing director of Entrust Family Office. Krishnan shares his insights and experiences into the role of a family office and how Family Office’s have become able partners for their clients and help nurture and protect their wealth.
He also talks about the mass affluent can learn from the rich is how to manage diversification. This, he says, some family offices manage well, but some also over-diversify. Overdiversification, he says, can kill a portfolio. Another favourite investment avenue these days for the rich is start-ups. But Krishnan cautions that as attractive as investing in start-ups sounds, the rich and the wealthy must do a proper due diligence of the start-up in which they aim to invest in. Most such investments, he adds, do not work out.