How does a multifamily office select and supervise advisers in foreign jurisdictions?
We start by confirming that each adviser is authorised in the country where services are provided. We review ownership, experience, disciplinary history, conflicts, custody arrangements, reporting, and local expertise. After appointment, we use written mandates, regular performance and compliance reviews, independent custody where practical, and a clear process for replacing advisers.
Selection begins with local authority and fit
We first identify what the adviser will do: investment management, banking, lending, insurance, accounting, legal work, or a specialist assignment. The required licence can differ by activity and country. We check the relevant public register and confirm that the firm’s permissions cover the proposed service. ESMA advises investors to check whether an investment firm is authorised by the relevant national regulator. The FCA describes its register as a public record of authorised firms and individuals. ESMA FCA
We then review the people behind the firm. We ask for ownership, senior personnel, relevant experience, references, audited financial information where available, insurance, and a record of regulatory matters. For US brokers, FINRA BrokerCheck provides employment history, licences, examinations, complaints, arbitrations, and disciplinary information. FINRA BrokerCheck
We also test practical fit. Can the adviser communicate in the family’s preferred language? Does the firm understand local markets, reporting rules, privacy requirements, and the family’s decision process? We document fees, referral payments, conflicts, delegated work, and who holds assets. SEC guidance states that investment advisers owe clients fiduciary duties and must address conflicts in the client’s interest. SEC
Supervision uses written controls and recurring reviews
The engagement letter should define authority, permitted investments or services, reporting dates, fees, data access, confidentiality, termination rights, and escalation contacts. We prefer assets to remain with a reputable custodian that is separate from the adviser when the structure allows. Statements should go directly to the family office or be independently accessible.
We review the relationship on a schedule. Reviews cover mandate compliance, portfolio or project results against agreed measures, fees, conflicts, cash movements, service quality, regulatory status, cyber controls, and changes in ownership or staff. We reconcile reports to independent statements and investigate unexplained differences promptly. We refresh due diligence when the adviser expands into a new jurisdiction or delegates material work.
Cross-border reporting deserves coordination with the family’s tax and legal professionals. The OECD Common Reporting Standard provides a framework for automatic exchange of financial account information between participating jurisdictions. OECD
If an adviser misses standards, we record the issue, set a remedy and deadline, and escalate to the family’s governing body. Repeated failures, unresolved conflicts, loss of authorisation, or weak controls can justify termination. This process is educational information. Families should obtain advice for their own facts.
Ray Dalio is famous for saying you shouldn't treat the opinions of everyone equally. Even with one person on one topic, you might treat their opinion very differently because they have 30 years experience in programming and managing software teams, but they don't have experience in structuring deals.
Related guides
- Family Office Due Diligence: A Practical Guide for Multifamily Offices
- Family Governance With a Multifamily Office
- Access to Alternatives Through an MFO: A Practical Guide for Families