How to Set Up a Family Office

How to decide whether a single family office makes sense — and how to build one that actually serves the family rather than the advisers around it.

Single family office or multi family office?

A single family office (SFO) is a private company built to manage the affairs of one family. A multi family office (MFO) serves several families from a shared platform, splitting costs across clients.

The difference matters. In an SFO, the family controls everything: who is hired, what gets prioritised, how information flows. The office exists for one purpose only. In an MFO, the infrastructure is shared. That makes it cheaper, but it also means sharing attention, sharing staff, and accepting a service model designed for multiple clients rather than one.

The choice comes down to two things: wealth level and desire for control. Below $250 million in investable assets, a standalone office is difficult to justify economically. An MFO, an outsourced family office, or a well-structured relationship with a private bank will cover most needs at a fraction of the cost. Above $250 million, a dedicated SFO starts to make financial sense. Above $500 million, most families prefer full control.

One caveat on multi family offices. Many MFOs have adopted a wealth management positioning, which can result in biased investment recommendations. When a provider manages your assets and earns fees on products they recommend, the incentives are not fully aligned with yours. A proper due diligence on any MFO is necessary before committing.

From here on, this article focuses on the single family office.

What is a single family office?

A single family office is a private structure that manages the financial, administrative, and sometimes personal affairs of one family. It is not a fund. It is not a bank. It is a service organisation that exists to execute the family's wishes.

It is worth noting that many structures use the term "single family office" loosely, sometimes deliberately, for marketing purposes. A genuine SFO serves one family exclusively. If the term is being used to describe something else, it is probably something else. We wrote about how to spot a real family office in more detail.

What an SFO does varies widely. Some are purely investment-focused: they manage a portfolio, allocate capital, and report on performance. Others go further and handle tax planning, estate structuring, property management, insurance, philanthropy, family governance, and next-generation education. A few also manage personal logistics, travel, and household staff.

The scope depends on what the family needs. There is no standard model.

Why create one?

Families typically reach the point of creating a family office when their affairs have become too complex for a private bank and a handful of advisers to manage coherently. This usually happens after a liquidity event, a business sale, or when the family's assets and structures have grown across multiple jurisdictions and service providers.

The core reason is coordination. When a family has a trust in one jurisdiction, a holding company in another, a property portfolio managed by a third party, and investment accounts across four banks, someone needs to sit at the centre and make sure it all works together. That is what a family office does.

The number of family members matters too. A single principal with a concentrated portfolio can be well served by a private bank and a few trusted advisers. But when a family grows to include multiple branches, different generations, and members with different needs and risk profiles, the coordination burden increases sharply. The more people involved, the stronger the case for a dedicated structure.

It also provides independence. A private bank manages your money, but it also sells you products. An independent family office has no products to sell. It works for the family and no one else.

Why not create one?

A family office is expensive to run. Industry data puts average operating costs at 40–60 basis points of assets under management per year, with staff accounting for roughly two-thirds of that. For a family with $250 million, that means $1 million to $1.5 million a year before investment management fees. We break down the full cost structure of a family office in a separate article.

It is also a management responsibility. Someone needs to oversee the office, hire and retain staff, manage service providers, ensure compliance, and keep the family informed. If no one in the family has the appetite or ability to do that, the office can drift.

For smaller families, or families where the principal wants to remain hands-off, an MFO or a well-coordinated network of external advisers is the better option.

The right questions to ask before building

Before committing, a family should work through the following.

Purpose

• What is the office for?
• Is it primarily about investment management, or does it need to cover governance, succession planning, education, and administration?
• What problem are we solving that our current setup cannot?

The answer shapes everything: team size, structure, costs, and reporting.

Scope

• How much should be done in-house, and how much outsourced?
• Which functions are strategic and which are transactional?
• Where do we need direct control, and where can we delegate?

What we have always seen in single family offices is that the ones that work well keep strategic decisions and family-facing services in-house, and outsource the technical and transactional work. The ones that struggle tend to either do too much internally with too few people, or outsource so much that the family loses oversight.

Control

• Who in the family will oversee the office?
• What decisions require family approval, and what can be delegated?
• How will the family communicate with the office, and how often?

This needs to be agreed before the first hire, not after.

Complexity

• How many jurisdictions are involved?
• How many entities and legal structures?
• How many family members with different needs?
• How quickly and at what cost can the proposed structure be dismantled?

The more complex the situation, the more the office needs to be designed with flexibility in mind. Structures that are easy to set up and difficult to unwind tend to become liabilities over time.

Succession

• What happens when the person who built the office is no longer there?
• Who will take over decision-making authority?
• Is the next generation prepared to step in?

Industry data from 2026 shows that 86% of family offices have no clear succession plan for their key decision-makers. That is a risk most families do not think about until it is too late.

External service providers

No family office does everything alone. Even the largest offices rely on external providers for specialist work.

Legal counsel. Trusts, corporate structures, regulatory compliance, contracts. Most families already have legal advisers. The family office works alongside them, not instead of them.

Tax advisers. Cross-border tax planning, reporting obligations, structuring. For multi-jurisdictional families, this is the most complex area.

Investment managers and custodians. Many family offices outsource some or all of their investment execution. Industry data shows that 80% of family offices use some form of external portfolio management. The investment strategy and oversight stay in-house; the execution does not have to.

Technology. Reporting platforms, portfolio aggregation, cybersecurity. Most offices outsource their IT infrastructure entirely, particularly cybersecurity, an area where 60% of family offices have experienced at least one incident.

The pattern we observe most often is that families start with a lean office and outsource heavily, then gradually bring functions in-house as the team grows and the family's needs become clearer.

Who can help set it up?

Setting up a family office is not something a family should do alone. But the question of who helps matters.

The family's existing legal advisers will typically handle the structural and regulatory work: entity formation, trust reviews, governance documentation, and compliance. They know the family's situation and its legal history. That knowledge is hard to replace.

What they may not have is operational experience in running a family office. Knowing how to structure a holding company is different from knowing what a family office should look like on day one, how to hire the first team, what to outsource, how to set up reporting, and how to make sure the office actually serves the family's priorities rather than defaulting to an investment-centric model because that is what everyone assumes a family office does.

That is what Westwick Melrose & Cromwell does. We work alongside the family's lawyers, tax advisers, and bankers to design and implement the office from the inside. We represent the family's interests exclusively and act as their voice at the table when coordinating with external providers.

We fill the gap between advice and execution: making sure the family office that gets built is the one the family actually needs.