How can a family reduce custody and trading risks during a multifamily office transition?
Use a written transition plan, keep assets with a qualified custodian, and separate the people who initiate and approve wires or trading instructions. Reconcile holdings before and after each transfer. Confirm requests through known contact details. Review custodian statements directly and pause activity when ownership, authority, or account data is unclear.
Build a controlled handoff
Create one inventory of every account, entity, owner, beneficiary, cash balance, security, cost basis record, and trading restriction. Record who may give instructions before and after the transition. Use a dated checklist with named owners and completion evidence. Keep the outgoing office, incoming office, custodian, banker, and family representative on the same written schedule.
Ask the receiving firm to confirm which assets can move in kind and which require special handling. Request transfer status from both firms. Do not assume a delayed or rejected transfer is complete.
Protect custody and authority
Confirm the legal name and registration of each receiving account before assets move. Match account titles, trust names, and authorized signers. Remove former employees and stale delegates. Require independent callback verification for new wires, standing instructions, address changes, and trading authority. Separate wire initiation from approval, with a second person checking the instruction against the signed mandate.
Compare custodian statements with the office report and investigate differences promptly. Keep passwords, security codes, and identity documents out of ordinary email. Use the custodian's published phone number when verifying a request.
So structure trumps strategy in many cases. What I find is that 90 some percent of people that raise capital go to the attorney and say, what structure should I use? And they say, usually they use this. You say, OK, let's do that. And that's how much thought gets put into structure.
Control trading during the move
Set a temporary trading policy before the first transfer. List permitted trades, prohibited trades, cash needs, liquidity deadlines, and who can approve exceptions. Freeze discretionary trading while an account is being re-registered unless a documented client need requires action. Keep a trade blotter showing the order, time, security, quantity, price, approver, and executing firm. Reconcile positions and cash after settlement, then obtain written signoff from the family representative.
Review beneficiary forms, standing letters of authorization, pledged assets, private funds, and derivatives separately. Ask each custodian how these items transfer and what deadlines apply. Treat custodian protections as a backstop, not a substitute for sound controls.
Related guides
- Family Governance With a Multifamily Office
- Access to Alternatives Through an MFO: A Practical Guide for Families
- Cross-Border Families and Multifamily Offices: A Practical Guide