What is a Family Office?

What is a family Office
INSIGHTS & SOLUTIONS

What is a Family Office?

Understanding the Family Office

The family office is a unique family business created by and for a single family to provide tailored wealth management solutions (from accounting to investments to philanthropy) in an integrated fashion across multiple generations while promoting and preserving the family's identity, unity, and values.

The scope and manner of services provided by family offices vary significantly across different families, hence the popular adage in the industry: "If you've seen one family office – you've seen ONE family office."

While no formal data exists, we estimate there are between 2,500 and 6,000 family offices in the United States, and that another 5,000 exist informally inside privately controlled businesses in the U.S. In Europe and Asia, the concept of life and wealth management in a family office is evolving, but new family offices in these areas are still being formed monthly in these areas.

Why Start a Family Office

Families start an office for a variety of reasons. Many seek to provide economies of scale for the family by leveraging the buying power of the entire group when procuring investment and advisory services. Others exist to control the wealth management process, protect the privacy and confidentiality of family members by deploying dedicated staff, or preserve family unity by keeping multi-generational family members connected. However, in all cases, family wealth owners look to the family office to provide professional, private, and conflict-free management of their affairs and to increase their chances of sustaining and strengthening their human, social, and financial capital for the long term.

Types of Family Offices

The focus of each family office is defined by the family’s goals, the goals for the office, and the way the staff spends its time. We have identified eight common family office types. Notably, many FOX members describe their offices as a combination of two or more of the ones defined here.

Supports the activities of business founders running operating companies. Founders offices address questions regarding ownership structure, real estate management and other financial issues outside of the operating business.
Reasons to Start a Family Office
There are many good reasons to open a family office that go beyond level of assets:
  • Control of the Assets
  • Continuity of the Family
  • Objectivity in Decision-making
  • Customization of Services
  • Confidentiality of Information
  • Integration of Financial Strategies
  • Education of Owners
Despite there being many good reasons to open a family office, it's not the right option for everyone.
Reasons to Start a Family Office
There are many good reasons to open a family office that go beyond level of assets:
  • Control of the Assets
  • Continuity of the Family
  • Objectivity in Decision-making
  • Customization of Services
  • Confidentiality of Information
  • Integration of Financial Strategies
  • Education of Owners
Despite there being many good reasons to open a family office, it's not the right option for everyone.
Family Office Alternatives
Family offices are not always the right solution. There are some alternatives in the marketplace that offer similar services. The key is finding the right fit.
Individuals and families with assets greater than $20 million may be best served by a multi-family office (MFO) or a financial institution or registered investment advisor with a dedicated wealth management specialization. Multi-family offices have historically provided high net worth families with comprehensive financial services and confidentiality not available from larger, product-driven financial institutions. Participating families have access to a wide array of integrated services that are not collectively offered anywhere else.
Family Office Alternatives
Family Office Alternatives
Family Office Alternatives
Family offices are not always the right solution. There are some alternatives in the marketplace that offer similar services. The key is finding the right fit.
Individuals and families with assets greater than $20 million may be best served by a multi-family office (MFO) or a financial institution or registered investment advisor with a dedicated wealth management specialization. Multi-family offices have historically provided high net worth families with comprehensive financial services and confidentiality not available from larger, product-driven financial institutions. Participating families have access to a wide array of integrated services that are not collectively offered anywhere else.