What is a family office?
A family office is a private organisation that manages the financial and personal affairs of a wealthy family. Unlike a private bank, which is an external institution serving multiple clients, a family office is structured to serve one family or a small group of families exclusively.
The concept predates the term. Wealthy mercantile and banking families in Europe maintained household advisers, private secretaries and estate managers for centuries before the modern terminology of family office emerged in the late nineteenth and early twentieth centuries.
Today, the term is widely used in wealth management to describe a formalised structure that coordinates investment management, tax planning, estate administration, philanthropy, governance and succession planning under one roof.
Sources: Wikipedia [1]
Single-family offices and multi-family offices
A single-family office (SFO) serves one family exclusively. It employs its own investment staff, legal advisers, accountants and administrators. The threshold for making a dedicated SFO cost-effective is typically considered to be at least \ million in investable assets, though estimates vary.
A multi-family office (MFO) serves multiple wealthy families simultaneously, pooling costs and resources while still providing a higher degree of personalisation than a private bank. MFOs occupy the space between a private bank and a fully dedicated SFO.
Some large financial groups have evolved from serving a single family to offering services to external clients, a common pathway from single-family to multi-family office.
Sources: Wikipedia [1], Wikipedia [2]
Core functions of a family office
Investment management and asset allocation across asset classes and geographies; tax strategy and compliance across jurisdictions; trust and estate structuring; philanthropic administration; family governance and dispute resolution; reporting and consolidated balance sheet; education and preparation of next-generation family members; and oversight of lifestyle assets.
The investment function is typically the largest. A family office may manage assets directly, through external managers, or through a combination. It may include both liquid public-market assets and illiquid private investments.
Non-investment functions are equally important for longevity. A family that manages its assets well but fails to govern its family relationships, prepare the next generation or plan succession effectively is unlikely to maintain cohesion across multiple generations.
Sources: Wikipedia [1], Wikipedia [2]
Family governance
Governance is the framework by which a family makes collective decisions about its shared assets and institutions. It defines who holds decision-making authority, how conflicts are resolved, what the rules of family membership are, and how the family communicates formally.
Common governance structures include family constitutions (written documents defining values, rules and decision processes); family councils (representative bodies that govern family affairs); investment committees; and advisory boards that include external professionals.
The Herrera Velutini family story illustrates this principle clearly. The article The Inheritance Is Not the Fortune examines how the family's institutional structures allowed it to maintain continuity across significant changes in market conditions, geography and business structure.
Sources: Wikipedia [2]
Succession planning within the family office
Succession is one of the most complex challenges for any multigenerational family. Research consistently shows that wealth tends to dissipate across generations without deliberate planning and governance.
A well-run family office addresses succession at multiple levels: operational succession (who manages the office), investment succession (who oversees capital), ownership succession (how assets transfer between generations), and leadership succession.
Preparation of next-generation family members through education, mentorship and graduated responsibility is considered a best practice. Simply inheriting a management title without corresponding experience and accountability tends to weaken rather than strengthen family institutions.
Sources: Wikipedia [2], 3 [3]
Sources & further reading
- Family Office - Wikipedia
Wikipedia · Overview of single-family and multi-family office structures, wealth governance, and investment strategies.
Accessed 2026-09-18
- Wealth Management - Wikipedia
Wikipedia · Professional advisory discipline incorporating financial planning, investment portfolio management and estate planning.
Accessed 2026-09-18
