Skip Navigation
Better Together | Risk Strategies to Join Brown & Brown  Learn More
  • Careers
  • Report a Claim
  • Contact Us
Risk Strategies Logo
  • Industries

    • Agriculture
    • Architects & Engineers
    • Aviation
    • Cannabis
    • Construction
    • Dental
    • Education
    • Entertainment
    • Financial Services
    • Fine Art
    • Healthcare
    • Law Firms
    • Marine & Yacht
    • Nonprofit & Human Services
    • Private Equity
    • Public Sector
    • Real Estate
    • Relocation
    • Transportation
    • Waste & Recycling
    • Wineries
  • Solutions

      • Captives
      • Casualty
      • Cyber
      • Environmental
      • International
      • Executive Risk Solutions
      • Property
      • Surety
      • Employee Benefits Overview
      • Benefit Administration and Technology
      • Benefits Compliance Support
      • Data & Analytics
      • Human Capital Advisory Services
      • International Benefits
      • Absence Management & Ancillary Programs
      • Voluntary & Lifestyle Benefits
      • Medicare
      • Financial & Wealth Overview
      • Retirement Plan Services
      • Executive Benefits
      • Life Insurance
      • Private Client Services Overview
      • Homeowners
      • Flood
      • Collections
      • Umbrella & Excess Liability
      • Auto
      • Collector & Exotic Car
      • Boat & Yacht
      • Travel Medical & Trip Insurance
      • Family Office
      • Cyber Insurance - Family Office
      • Cyber Insurance - Individuals
      • Life Insurance
      • Specialty Coverages
      • Private Client Risk Resource Center
    • Reinsurance
      • Risk Management Services Overview
      • Analytics
      • Claims Management & Advocacy
      • Loss Control
      • Safety Consulting Services
      • Pro Safety Training Courses
      • Workers’ Comp: Premium Review & Recovery
  • Consulting

    • Consulting Overview
    • Actuarial Services
    • Healthcare Claim Audit Services
    • Health and Welfare
    • Mergers and Acquisitions
    • Pharmacy Consulting
    • Retirement Benefits
  • News and Insights

    • All Insights
    • Blog
    • Emergency Resource Centers
    • Employee Benefits Compliance Center
    • Events
    • Media Coverage
    • State of the Market Reports
    • Press Releases
    • Private Client Resources
    • Webinars
  • Company

    • About Us
    • Annual Report
    • Careers
    • Culture and Values
    • Diversity, Equity & Inclusion
    • Environmental, Social, & Governance
    • General Terms of Business
    • Leaders
    • Local Expertise
    • Mergers & Acquisitions
    • Recognition & Awards
    • Risk Strategies Foundation
    • Transparency and Disclosures
  • Join Us
    • Careers
    • Mergers & Acquisitions
  • Industries
    • Agriculture
    • Architects & Engineers
    • Aviation
      • Aviation Business Insurance - Manned Risk
      • Non-Owned Aviation
      • Unmanned Aerial System and Drones
    • Cannabis
    • Construction
      • Alternative Solutions
      • Financing & Pre-Construction
      • Insurance Solutions
      • Risk Management
      • Surety
    • Dental
      • Insurance for Dental Professionals
      • Dental Malpractice Insurance
      • BOP Insurance - Dental Practices & DSOs
      • Dental School Graduates
      • Dental Associates & Hygienists
      • Dental Practice Owners
      • Dental Service Organizations (DSOs)
    • Education
      • Employee Benefits for Education
      • Property, Casualty & Liability for Education
      • Student Health & Wellness
        • Student Health Brokerage and Consulting
        • Student Health Plan Administration
        • Student Health Insurance Plans
        • Solutions for Student Athletes
        • Student Health & Wellness Tools
        • Special Risk Insurance
    • Entertainment
      • Film & Television
      • Advertising Production Wrap Ups
      • Advertising/PR
      • Event Cancellation & Non-Appearance
      • Music & Touring
      • Theatrical Production & Live Performance 
      • Venue Insurance
    • Financial Services
      • Asset Managers
      • Banks & Non-Bank Lending
      • Collections
      • Consumer Financial Services
      • Financial Tech
      • Insurance Companies
    • Fine Art
      • Dealers and Auction Houses
        • Galleries
        • Private Art Dealers
      • Collections
        • Private Collectors
        • Coins, Paper Money & Numismatics Collections
        • Gold, Bullion & Precious Metal Collections
      • Artists
      • Museums and Foundations
        • Museums
      • Fine Art Packers / Shippers / Warehouses
    • Healthcare
      • Employee Benefits - Healthcare
      • Managed Care / Stop Loss
      • Medical Malpractice
      • Property & Casualty - Healthcare
      • Reinsurance
    • Law Firms
    • Marine & Yacht
      • Yacht Insurance For Individuals
        • Mega Yachts
        • Cruiser Insurance - Jackline
        • One-Design Insurance Program
        • Sailors Health Insurance Program
        • US Sailing Insurance Solutions
      • Commercial Marine Insurance
        • Aquaculture
        • Cargo & Transit Insurance Solutions
        • Crew Medical Insurance
        • Hull & Machinery
        • Marine Claims Service
        • Marine Construction
        • Marine Liability
        • Ports & Terminals
        • Protection & Indemnity
        • Recreational Marine Businesses
        • Sailing Organizations – Burgee Program
    • Nonprofit & Human Services
    • Private Equity
      • Crypto Companies
    • Public Sector
      • Public Safety Organizations & Municipalities
    • Real Estate
      • Commercial
      • Community Associations
      • Hospitality
      • Residential / Habitational
      • REITs
      • Retail
      • Specialty Programs
    • Relocation
      • Domestic Household Goods
      • Expat Renters & Living Insurance
      • Relocation Claims Service
      • International Household Goods
      • Supplemental Movers Coverage
      • Temporary Living Insurance
      • Vacant Home
    • Transportation
      • Business Auto Insurance
      • Last Mile Delivery
      • While Under Dispatch Insurance
      • Forwarding & Brokering
      • Workers' Compensation
    • Waste & Recycling
    • Wineries
  • Solutions
    • Commercial Insurance
      • Captives
      • Casualty
        • Analytics
        • Auto Liability & Physical Damage
        • Captives & Alternative Risk Financing
        • Claims Advocacy & Loss Control
        • Excess Liability
        • General Liability
        • Product Recall
        • Workers' Compensation
      • Cyber
        • Cyber Resolute
        • Cyber Risk Assessment and Analytics
        • Cyber Risk Response & Claims Advocacy
        • Cyber Insurance - Family Office
        • Cyber Insurance - Individuals
      • Environmental
        • Contractors Pollution Liability
        • Environmental Excess
        • Environmental Liability Transfer
        • Environmental Liability - Healthcare
        • Environmental Liability - Higher Education
        • Pollution Legal Liability
        • Environmental Liability - Private Equity
        • Professional Environmental Liability Insurance
        • Real Estate Development
        • Remediation Cost Cap
        • Secured Creditor Protection for Lenders
        • Underground Storage Tanks
      • International
      • Executive Risk Solutions
        • Executive Risk Solutions - Entertainment
        • Executive Risk Solutions - Financial Institutions
        • Executive Risk Solutions - Healthcare
        • Executive Risk Solutions - Real Estate
      • Property
        • Builder's Risk
        • Property Claims Services
        • Inland Transit and Ocean Cargo
        • Natural Hazard Catastrophe Modeling
        • Political Violence and Terrorism
        • Property Damage & Business Interruptions Valuations
        • Property Loss Prevention and Control
      • Surety
    • Employee Benefits
      • Employee Benefits Overview
      • Benefit Administration and Technology
      • Benefits Compliance Support
      • Data & Analytics
      • Human Capital Advisory Services
      • International Benefits
      • Absence Management & Ancillary Programs
      • Voluntary & Lifestyle Benefits
      • Medicare
    • Financial & Wealth
      • Financial & Wealth Overview
      • Retirement Plan Services
      • Executive Benefits
      • Life Insurance
    • Private Client Services
      • Private Client Services Overview
      • Homeowners
      • Flood
      • Collections
      • Umbrella & Excess Liability
      • Auto
      • Collector & Exotic Car
      • Boat & Yacht
      • Travel Medical & Trip Insurance
      • Family Office
      • Cyber Insurance - Family Office
      • Cyber Insurance - Individuals
      • Life Insurance
      • Specialty Coverages
      • Private Client Risk Resource Center
    • Reinsurance
    • Risk Management Services
      • Risk Management Services Overview
      • Analytics
      • Claims Management & Advocacy
      • Loss Control
      • Safety Consulting Services
      • Pro Safety Training Courses
      • Workers’ Comp: Premium Review & Recovery
  • Consulting
    • Consulting Overview
    • Actuarial Services
    • Healthcare Claim Audit Services
    • Health and Welfare
    • Mergers and Acquisitions
    • Pharmacy Consulting
    • Retirement Benefits
  • News and Insights
    • All Insights
    • Blog
    • Emergency Resource Centers
      • Cybersecurity
      • Earthquake
      • Hurricane
      • Pandemic
      • Riot & Civil Unrest
      • Severe Storms
      • Violence & Active Shooter
      • Wildfire
      • Winter Weather
    • Employee Benefits Compliance Center
    • Events
    • Media Coverage
    • State of the Market Reports
    • Press Releases
    • Private Client Resources
    • Webinars
  • Company
    • About Us
    • Annual Report
    • Careers
    • Culture and Values
    • Diversity, Equity & Inclusion
      • BeHEARD Series
      • DE&I Structure
      • Employee Resource Groups
    • Environmental, Social, & Governance
    • General Terms of Business
    • Leaders
    • Local Expertise
    • Mergers & Acquisitions
    • Recognition & Awards
    • Risk Strategies Foundation
    • Transparency and Disclosures
      • General Terms of Business
      • Conflict of Interest Policy
      • Compensation Disclosure
      • Enterprise Risk Management
  • Join Us
    • Careers
      • Benefits & Wellness
      • Investing in Growth & Leadership
      • Life at Risk Strategies
      • Next Steps
    • Mergers & Acquisitions
      • Partnership Benefits
      • Why Join Us?
      • Onboarding & Integration
  • Careers
  • Report a Claim
  • Contact Us

You are about to leave Risk Strategies website and view the content of an external website.

You are leaving risk-strategies.com

By accessing this link, you will be leaving Risk Strategies website and entering a website hosted by another party. Please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Risk Strategies website. We encourage you to read and evaluate the privacy and security policies of the site you are entering, which may be different than those of Risk Strategies.

OK
  • News and Insights
  • Blog
Subscribe

Subscribe via Email

  • News and Insights
  • Blog
October 20, 2022

Family Office – Preparing for a New Regulatory Landscape and Increased Oversight

Executive Risk Solutions
3 min read
Alex Maza, Management Liability Product Leader, Executive Risk Solutions Practice
  • Facebook
  • X (Twitter)
  • LinkedIn
  • Email
Family Office – Preparing for a New Regulatory Landscape and Increased Oversight
  • Facebook
  • X (Twitter)
  • LinkedIn
  • Email

Private wealth management advisory firms, established as family offices, provide financial and advisory services for members of their inner circle. As they have historically been generally established without Securities and Exchange Commission (SEC) nor Commodity Futures Trading Commission (CFTC) registration and oversight, insurance carriers have been cautious about assuming the liability risks of these entities.

However, Congress’ House Financial Services Committee has taken steps toward implementing tighter regulations with the introduction of H.R.4620 - The Family Office Regulation Act of 2021. This proposed legislation would require, among other stipulations, that family offices with more than $750M in Assets Under Management (AUM) to register with the SEC. It would significantly scale back previous exceptions made for family offices under the Investment Advisor Act of 1940 and section 409 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. While the bill is still navigating through the legislative process, private fund managers should be prepared to operate in a more regulated environment, which could, in turn, change the perspectives of management liability underwriters moving forward.

Sustained Privacy Raises Questions

The SEC has been increasing its scrutiny of private fund managers since financial institutions invested in toxic real estate securities, the major contributor to the 2008 financial crisis. From the vantage point of a non-sophisticated investor, given the lack of regulatory oversight and disclosure requirements, family offices are viewed as volatile.

The recent implosion of Archegos Capital Management, which collapsed because outside investment agreements in speculative assets were a large percentage of its total portfolio, along with the firm hiding its exposure from banks, exemplifies the volatile nature of private fund organizations left without critical oversight. Proper regulation would perhaps have provided legal disclosures preventing the Archegos financial mishandlings. Without federal monitoring, insurance carriers are fearful that family offices will continue to engage in high-risk, and possibly fraudulent, activities.

Family offices are also considered volatile because of the prospect of family members disagreeing over the management of assets, especially when money is pooled into the same funds.

Acknowledging the Call for Regulation

While family offices are currently exempt from registering with the SEC as investment advisors, the government is pushing to remove the exemption and bring regulatory scrutiny over family offices and private fund operators under the purview of the SEC.

Private fund managers are vehemently opposed, calling the additional regulations an imposition of increased costs and unnecessary policing, and holding that family offices were intended to always be exempt from registration requirements.

Leveraging the Softening Market

While there is new capacity and a softer market than 2021 in the management liability space, carriers have yet to increase underwriting appetite for family offices. However, there are more existing carriers wanting to expand their underwriting appetite and product offerings which private fund managers can leverage.

The tallest hurdle with family offices for underwriters is the absence of disclosure. As family offices do not have to file a Form ADV, which discloses the organization’s business operations, investment strategies, and relationships, they can remain fully private – a lack of transparency which underwriters find enigmatic.

The more transparent a family office is, the more attractive it becomes to a carrier. Providing visibility ensures a family office is not performing ancillary services that could expose the office and the insurance carrier to claims for mismanagement of investments or faulty tax preparation and accounting.

Documenting and providing the following information will prepare a family office for a heightened regulatory environment and give more comfort to the underwriting community:

  • Company Structure: Details regarding the ownership and employees of the company, as well as the businesses’ clients, practices, and affiliations.
  • Financial Disclosures: Documentation regarding all practices, fees, and potential conflicts of interest.

Conforming to Oversight Necessities

More thorough oversight will help management liability insurers feel more comfortable writing policies for family offices. The insurance market's reaction hinges on how family offices adapt to new regulations that will reshape the landscape they have traditionally been operating in.

Want to learn more?

Find Alex on LinkedIn, here. Find Dwight on LinkedIn, here.

Connect with the Risk Strategies Management Liability team at MLPG@risk-strategies.com.

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client. 

Related Posts

See all posts

Executive Risk Solutions Financial Services
4 min read
February 07, 2025

How Deregulation Could Affect Your Financial Services Business

Key takeaways: The new presidential administration is likely to prioritize a deregulatory agenda. …
Read article
Executive Risk Solutions
3 min read
October 29, 2024

ESOPs: The Importance of Risk Management and Insurance Planning

Employee stock ownership plans (ESOPs) are increasingly popular, especially for smaller to …
Read article
Executive Risk Solutions Cyber
4 min read
October 02, 2024

DOJ’s Corporate Whistleblower Awards Pilot: Compliance & Risk Impact

In August 2024, the U.S. Department of Justice (DOJ) launched its Corporate Whistleblower Awards …
Read article
Risk Strategies Logo
  • Report a Claim
  • Contact
  • Terms of Use
  • Cookie Policy
  • Privacy Policy
  • Consumer Health Data Privacy Notice
  • Accessibility
  • Health Plan Transparency Compliance
  • Accessibility
  • Cookie Policy
  • Health Plan Transparency Disclosure
  • Privacy Policy
  • Terms of Use
©2025 Risk Strategies. All rights reserved.

Connect with Us

  • LinkedIn
  • X
  • Instagram
  • Facebook