How to Start a Family Office

Family offices can help financial advisors differentiate themselves in a competitive market as a one-stop solution for diverse client needs. This type of firm sets itself apart from other firms by providing highly personalized and holistic wealth management services for wealthy families. In North America alone, there are an estimated 7,800 family offices with an average wealth of $2.9 billion, according to PwC’s Global Family Office Deals Study.¹ Here’s an overview of how family offices work and the steps required to establish one.

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What Is a Family Office?

A family office is a private wealth management advisory firm that serves ultra-high-net-worth clients and their families. By specializing in the specific needs of affluent families, financial advisors can better guide them in selecting a long-term approach to manage their wealth effectively. Family offices offer a more comprehensive suite of services, such as investment management, estate planning, tax strategy, philanthropic planning and administrative support.

Here are some additional characteristics of family offices, according to Bank of America’s 2025 Family Office Study ² :

• 56% of family offices are 1st generation and funded by self-made wealth
• 60% of wealth managed by family offices stems from business ownership
• 70% of family offices support two or more principals, with an average of 10 family members
• One-third of family offices manage 50 or more bank accounts, and more than 40% manage more than 50 investment accounts
• 64% of family offices face challenges with building, growing and preserving wealth

How do family offices invest? According to Goldman Sachs’ 2025 Family Office Investment Insights Report, the average asset allocation for family offices globally is divided between public equities (31%), alternatives (42%), cash and cash equivalents (12%), fixed income (11%), other investments (3%), and commodities (1%). The “other” category includes cryptocurrency, fine wines, art and sports. ³  

Family Office vs. Traditional Financial Advisory Firm

A traditional financial advisory firm typically offers investment advice and financial planning services to a broad range of clients. So while a traditional financial advisor business will focus primarily on managing investments and providing general financial guidance, a family office often addresses every aspect of a family’s financial life. This includes coordinating with legal and tax advisors, estate planning, and even managing household staff and planning family meetings and education sessions.

According to Bank of America, some of the tasks most commonly handled in-house include:

• Household management
• Bill payment
• Next-generation education/family meetings
• Financial planning

Tasks that are more frequently outsourced, either fully or partially, include accounting, estate planning, and philanthropic services.

Family Office vs. Private Banking

Private banking services, typically offered by large financial institutions, also cater to high-net-worth individuals, but differ from family offices in scope and personalization. Private banks provide tailored financial services, such as investment management and estate planning, but often within the confines of the bank’s products and services. Family offices operate independently and can provide a wider range of financial products and services, offering truly customized solutions.

Single-Family Office vs. Multi-Family Office

There are two main types of family offices: single-family offices and multi-family offices. A single-family office serves one affluent family, providing highly personalized and exclusive services. This allows for complete customization based on the specific needs and preferences of that family. A multi-family office serves several families, pooling resources to offer comprehensive services at a lower cost per family. While multi-family offices may not provide the same level of individual attention as single-family offices, they offer significant cost savings and access to a broader range of expertise.

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How to Set Up a Family Office

#1: Define Your Purpose and Goals

Moving to a family office model requires an understanding of who you want to serve and what concerns, needs, and goals those clients are most likely to have. Wealth preservation is a key goal, but according to Bank of America, wealthy families are also interested in:

• Maintaining a diversified portfolio
• Leveraging credit strategically to maintain liquidity while exploring new investment opportunities
• Managing tax liability and overall tax efficiency
• Ensuring a smooth transition to the next generation, entailing the transfer of wealth and succession planning
• Embracing technology, including artificial intelligence (AI)
• Developing strong cybersecurity defenses

Creating ideal client avatars or buyer personas can help you better understand what expectations family office clients bring to the table, and how you’re equipped to serve them. 

#2: Establish Office Structure and Processes

The next step in setting up a family office involves defining your office structure and processes. Part of this is deciding whether you want to have a single-family office, serving one family, or a multi-family office, serving multiple families. Each structure has its own benefits and drawbacks.

You’ll also need to set up governance policies, compliance measures and operational workflows. Your processes should cover investment management, estate planning, tax strategies and philanthropic activities, so that you can ensure all aspects of the family’s financial needs are addressed.

#3: Finalize the Framework

Finalizing the framework for a family office involves selecting and integrating the right technology platforms for financial planning and reporting, portfolio management and communication. It also requires recruiting key personnel such as accountants, investment managers, legal advisors and administrative staff. Creating a detailed operational manual that outlines all procedures and policies can also help you maintain consistency and efficiency.

#4: Test Systems and Processes

It’s important to test all systems and processes before you launch your family office to ensure everything runs smoothly. This involves conducting trial runs of financial transactions, reporting systems and communication protocols. Advisors should seek feedback from the family and other stakeholders to identify any issues and make any necessary adjustments. This can help you iron out any operational kinks and prepare the family office for seamless day-to-day functioning.

#5: Launch Your Family Office

Your final step is the official launch. This includes formally introducing the family office to all stakeholders and ensuring that all systems are fully operational. You should schedule regular reviews and updates to ensure the office continues to meet the family’s evolving needs.

When working with a high-net-worth family, it’s essential that you fully understand the family’s financial situation, the scope of their assets and their specific goals. Once again, it’s important to create a detailed vision that outlines the family’s financial objectives, legacy aspirations and core values.

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Frequently Asked Questions About Family Offices

Bottom Line

Running a family office requires careful planning and the collaboration of various financial experts. In doing so, financial advisors can deliver comprehensive and personalized services that address the specific needs of affluent families, such as estate planning and tax strategy, all while solidifying their role as trusted advisors in the process.

Financial Advisor Tips

• If you don’t have a lot of time to actively spend on marketing, you might consider using an online marketing service that brings leads to you. SmartAsset AMP (Advisor Marketing Platform) is our holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Another way to grow your client base is by expanding the radius of where you’re looking for clients. Potential clients are increasingly willing to work with financial advisors remotely. Consider broadening your search and working with high-net-worth investors who are comfortable connecting online, rather than in person.

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