- What a family office is — and what it is not
- What a family office actually does
- Single, multi, embedded: what sits behind the label
- What it costs, and the wealth it takes
- How a family sets one up
- How families stay in control: governance
- Where to start
"Family office" has become one of the most used, and most abused, terms in finance. There are now said to be more than 8,000 single family offices in the world, a number Deloitte expects to keep growing sharply, and an entire industry has grown up around them. Everyone sells to family offices. Far fewer people can say plainly what one is.
We have spent decades serving families; here is the definition we work from. A family office is the private organisation a family creates to manage its assets, its affairs and its transmission. It works for one family. It is paid by that family. And it exists for one purpose above all the others: to keep the family in control of what it owns, across generations.
Everything else — the investment platform, the reporting, the structures, the staff — is machinery in service of that purpose. When the machinery becomes the point, something has gone wrong. This guide sets out what a family office is and is not, what it actually does, the forms it takes, what it costs, and how families that get it right stay in control of it.
What a family office is — and what it is not
The term is old. Wealthy families have appointed trusted stewards for as long as there have been family fortunes; the modern form is usually traced to the private offices of nineteenth-century industrial families. What is new is the scale of the industry that has adopted the label.
A family office, properly understood, has three defining features. It serves one family. It is paid by the family, not by commissions on the products it recommends. And it answers to the family alone: no outside shareholders, no fund investors, no sales targets. Note what is absent from that definition: size. A family office has no legal form and no minimum headcount. Some of the best we know are the principal and one trusted employee, running the family's investments from two desks.
That definition excludes most of what the market calls a family office. A private bank's "family office division" is a distribution channel. An investment fund that manages one wealthy individual's money alongside outside capital is a fund. A concierge service with a rebranded letterhead is a concierge service. None of these is wrong to exist; they are wrong to carry the name, because the name implies a loyalty they do not have. We have written separately about how to tell a real family office from the label, because for families the distinction is not academic: it determines whose interest sits at the top of the file. Put simply, if a "family office" sells any kind of service, access or financial product (even "co-investment"), it is not one.
One more distinction matters, and the industry usually gets it backwards. The office is not the point. The family is. A family office at its best reflects and reinforces the family's unity; it cannot create it. In a family office, "family" comes before "office".
What a family office actually does
No two family offices have the same scope, and that is as it should be: the structure follows the family's needs, not a template. But across the hundreds of offices our partners have seen from the inside, the recurring core is consistent.
Consolidated oversight. One place where the family can see everything it owns (operating businesses, portfolios, property, art, structures) and what each element costs and returns. Most families are surprised by how rare this is in practice, and by how much clarity it buys.
Investment coordination. Setting the allocation the family actually wants, selecting and overseeing external managers, and executing the investments the family chooses to hold directly. The office does not need to manage money in-house to do this well; it needs to hold the judgement in-house.
Coordination of advisers. The lawyers, bankers, accountants and specialists around a family each see their own piece. The office holds the whole picture, briefs them, challenges them, and makes sure their advice serves the family rather than the adviser.
Governance and decision-making. Preparing the decisions that belong to the family, recording them, and making sure they are applied. This is the quiet function that determines whether the office still serves the family in twenty years.
Transmission. Preparing the next generation, and preparing the office itself to serve a generation it was not built around. This is the work most often left too late: 86% of single family offices have no succession plan, yet most expect to hand over within a decade.
Around that core, families add what they need: philanthropy, education of heirs, family council support, lifestyle and household services. Which functions belong in-house and which can be delegated is a real design question, and we have written a practical guide to what to keep and what to outsource. The line we hold: technical execution can be bought; stewardship cannot. We unpack each function, and where that line sits, in our guide to family office services.
Single, multi, embedded: what sits behind the label
The single family office (SFO) is the full form: a dedicated organisation, owned and controlled by one family, staffed for that family alone. Maximum control and privacy, at full fixed cost. Within the single form, families still face a real choice about what the office is for; we describe three archetypes of SFO, each with a different purpose and risk profile.
The multi-family office (MFO) is, despite the name, not a family office in the sense above. It is an external provider: a firm that sells family-office-style services to a number of wealthy families and individuals. The name is badly chosen, because nothing about it is the family's own — the client neither owns nor controls the office it is buying from. And the model is being diluted. A growing share of the firms carrying the label are, in substance, wealth managers: paid on assets, distributing products, wearing a name that inspires more trust than the one it replaced. Some MFOs are excellent, and for many families buying the service is the right answer, particularly below the scale at which a fully staffed office earns its keep. But be clear about what you are buying: a client relationship with a provider, not an office of your own. How families decide between the two, and what each one costs, is the subject of our guide to choosing between a single and a multi-family office.
The embedded family office is the form nobody plans and many families have: the family's affairs run from inside the operating business, by the CFO and a trusted assistant, between other duties. It works until it does not. The breaking point is usually the liquidity event: the business is sold, and the informal structure loses its home at exactly the moment the family's wealth becomes liquid and visible.
What it costs, and the wealth it takes
Start by discarding the idea of an entry ticket. Because a family office has no fixed form, it has no minimum size: a principal running a small investment structure alone or with one employee has a family office, in every sense that matters. The published thresholds describe something narrower: the point at which a fully staffed, full-service office earns its keep. Most practitioners place that between $250 and $500 million in investable assets, and Campden Wealth's 2025 research puts the full-service breakeven closer to the top of that range. Below that line the fixed cost of a large team erodes returns faster than the control it buys, so families keep the office deliberately lean, delegate more, or buy the service from an external provider. The mistake is not being below the threshold; it is staffing as if you were above it.
Above the line, operating costs typically run at 40–60 basis points of assets per year for small and midsize offices, falling towards 20–35 at scale. Staff is the dominant line: roughly two-thirds of the total, with C-level compensation alone absorbing up to 70% of a small office's budget. The published benchmarks also understate the real bill. Once external management fees, banking charges and lifestyle assets are counted, they capture barely more than half of it. The full picture, with the figures by office size and the five structural pitfalls, is in our guide to the cost structure of a single family office.
The number that matters, though, is not the cost but what it buys. A well-built office is cheap at 60 basis points if it keeps the family in control and prepared. A drifting office is expensive at 30.
How a family sets one up
The mechanical steps (legal structure, jurisdiction, hiring, systems) are the easy part, and they come last. The offices that work start from a different question: what does this family actually want the office to do? Control what, for whom, with what involvement from the family itself?
Families are routinely offered "ideal family office structures" built around tax efficiency or a governance framework someone else designed. In our experience, the universal template does not exist. A structure designed before the purpose is settled will be rebuilt within five years — usually at the next generational transition, and usually at a multiple of the original cost.
The sequence that works: articulate what the family wants from the office; decide what stays in-house and what is delegated; design the governance, meaning who decides what and how the family stays informed; then, and only then, build the structure, hire the team and choose the jurisdictions. We have set the full sequence out in how to set up a family office.
How families stay in control: governance
The uncomfortable part of this subject is that families lose control of offices they own outright. Rarely to fraud. Usually to drift: advisers who quietly become decision-makers, structures nobody can explain any more, an office that has learned to run itself and prefers it that way.
The antidote is family governance, and it is not the corporate kind. Corporate governance protects outsiders (minority shareholders, regulators, markets) from the people in charge. Family governance does the opposite job: it keeps the family in charge of what it owns. Importing listed-company governance into a family office solves the wrong problem, and we have watched it cost families dearly.
The tools family governance actually requires — reserved decisions that never leave the family, a working family council, an exit process, a way of settling disputes before they harden — are the subject of our white paper, Governing Families, Not Corporations, built on the three tensions we find in almost every office and on real cases. It is the closest thing to a governance manual for families we know how to write.
Where to start
If your family is asking whether it needs a family office, start with three questions around the family table, before any adviser is in the room. What do we own, and can we see it in one place? Who decides today, and is that who we want deciding in ten years? And if the generation that built the wealth stepped back tomorrow, would the next one be ready, and would it even know where the keys are kept?
The answers usually point clearly to one of three situations: a family that needs to build an office, a family whose office no longer fits, or a family that has quietly lost the controls and needs to take them back. Those are the three moments we exist for. For a family whose office already exists and no longer fits, an independent audit of that office is usually where the answer starts.
A family office is not a product you buy. It is the instrument by which a family remains the author of its own affairs. Built for that purpose, it is one of the best investments a family will make. Built for any other, it is overhead with a flattering name.
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