How To Open A Family Office

Part one in a five-part series.

In this series we ask how a family should actually go about opening a single family office, from the first question of why it is needed through to structure, staffing, governance, launch and long-term review. 

We draw on the latest research from UBS, J.P. Morgan, Citi, Deloitte, Campden, Goldman Sachs and others, but this guide also reflects what we have learned from the family office community around Mr Family Office: principals, executives, advisers and service providers who have been interviewed for the newsletter, written thought leadership pieces for us, contributed their experience directly, or challenged and expanded the conversation through our wider network and social channels. 

That gives us something the big reports often cannot: the practical detail, recurring mistakes, awkward trade-offs and lessons that only emerge from people actually running, building and advising family offices.

We start from first principles and focus on the decisions that are hardest to reverse: who the office is really for, what it should control, what it should cost, what should sit inside or outside it, how it should interact with an operating business, and how it can survive beyond the founder.

Each part ends with a Decision Gate, a test the family should be able to pass before moving on. 

The aim is simple: not to help families build the biggest or most impressive family office, but to build the right family office.

Each part of this series settles a decision the next one depends on. You cannot sensibly pick a jurisdiction before you know who the office is for. You cannot hire a CIO before you have decided whether you have defined your investing objectives. 

What each part covers

Let’s get into it.

Setting up a family office is often a reaction. A response triggered by a liquidity event, tax concerns, rising complexity or the desire to split family and business assets. 

But how you structure a family office can shape family dynamics for decades. Get it wrong and you create problems that could take years to unwind. 

Poor definitions of control, unclear beneficiaries, and delayed separation from operating businesses create confusion that can compound over time. The structure may be financial, but the consequences can be deeply personal.

Most families are not setting out to build institutions; they are reacting to life events.

And there are more of them reacting every year. Deloitte counts roughly 8,000 single family offices worldwide, up 31% since 2019, and projects 10,720 by 2030. PwC's deal database tracks more than 20,000 entities that call themselves family offices. But however you define and count family offices, the direction is the same: this is one of the fastest-growing institutional categories in finance, and most of the new entrants are figuring it out as they go.

The trigger events may involve an IPO, a liquidity windfall, a looming tax bill, a founder’s health scare, death, divorce. Suddenly, informal structures that have served the family start to creak. 

A liquidity event creates a particularly difficult transition. A family moves almost overnight from owning something concentrated, illiquid and deeply familiar to managing a pool of liquid capital in markets it may understand far less well. The business may also have provided more than wealth: it gave the family structure, identity and a common purpose. Selling it removes all three. Before rushing to invest the proceeds, the family needs to decide what will replace that organizing principle.

That’s when the term “family office” enters the conversation.

The question many families rush to ask first is where? Miami? Dubai? Switzerland? Singapore? It’s understandable… people see trends in the media and assume there must be reasons for them. 

The better question is why?

And the answer needs to be more than “that’s what we’re supposed to do” or “that’s what everyone with a ton of cash does”. The why defines everything that follows. Is the family office meant to preserve wealth, to grow it, to protect heirs, to professionalize governance, or to extend a legacy beyond the founder’s lifetime? 

Each answer leads to very different structures, staffing, investment mandates, and tax considerations. A family that frames its office around control and secrecy will end up with a very different institution than one that prioritizes education, philanthropy, or entrepreneurial reinvestment. 

Asking “why” first forces clarity of purpose, and that clarity is the foundation on which everything else, from jurisdiction to strategy, should be built.

Advisers who set these offices up see the sequence reversed again and again. Lisa Cornwell Webb, Partner and Leader of Private Clients & Family Offices at PwC Switzerland, told Mr Family Office “families rush to establish an entity, hire a team, start investing — then work out their risk appetite, their purpose, their values afterwards. It should be the reverse.”

Who Is the Client?

This question is often completely overlooked. But you need to ask who exactly the family office is for.

The answer changes everything, from governance to investment mandate to cost.

Cornwell Webb frames the same problem: “A lot of the value is unglamorous: asking the questions the family hasn’t asked itself yet. Who actually makes decisions? What happens when the founder steps back? The technical structuring is often the easier part of the jigsaw — getting the family aligned can be far harder.”

Here are some practical ways to help understand who the client is. 

Who pays?

Most family office surveys ask about governance and succession. Not many ask how the office's costs are allocated between family members. But this can create real conflict. If some family members or a branch of the family only uses the office lightly, they may come to resent other family members or branches using it heavily. 

Decide the allocation formula on day one, write it down, and revisit it every time the client definition changes. If the founder wants to fund everything personally, fine, but write down what happens when the founder is no longer around to do so.

Embedded vs Independent

Most first-generation founders start small. They ask their finance team to manage personal bills. Maybe the company controller files tax returns. Suddenly there’s an “embedded office” inside the operating company.

It feels efficient, and then the problems start. 

Blurred lines appear. Staff don’t know who they ultimately report to. Corporate systems store personal data. A minority shareholder starts questioning why company resources are being used for private matters. Family or company liabilities become blurred. 

The longer the delay in formally separating the family office, the messier the divorce later can be.

Three questions we've seen a minority shareholder's lawyer ask, and which an embedded office rarely has good answers to: 

If those questions make you uncomfortable, separate. 

Employees in the family business can continue to support the family office, but under a simple management services agreement. A monthly recharge can solve problems for a fraction of the cost of solving it later. 

Operating Company Blind Spots

Another blind spot: the ownership stake in the family business itself.

PwC's Global Family Office Deals Study found that 86% of family offices still have an operating family business. 

Only 14% of family offices are born from a clean liquidity event. The rest are set up alongside a business that is still running. That changes the design brief. You are building an office that has to coexist with a company, its board, its minority shareholders, and its management team, none of whom report to the family office.

And questions around that operating business need to be addressed. 

Does the family office manage it?
Does the corporate board?
Is there overlap?

Fail to define this, and you guarantee confusion in the next generation, especially when dividends, voting rights, or a potential sale come into play.

Control vs Governance

Founders almost always want control. That’s natural. But a family office is supposed to last beyond the founder’s lifetime. 

If structures are built around the current patriarch or matriarch, they’re fragile.

Henry Brandts-Giesen, Partner and Global Co-Chair of Family Office & High Net Worth at Dentons, explained to Mr Family Office why founders often resist governance so strongly: “The hardest part is helping a family leader prepare for a future in which they are no longer in complete control. These are often people whose judgement, concentration and personal authority created the wealth, so asking them to contemplate incapacity, succession or shared decision-making cuts against the qualities that made them successful.”

Better models balance control with governance, including independent directors, family councils, written constitutions. 

These frameworks may sound heavy, but they can prevent disaster later on. 

The numbers here are stark. UBS's Global Family Office Report 2026 found that only 35% of family offices have a defined succession plan for the office itself, and just 27% have a structured process for preparing the next generation. Campden's Operational Excellence research found the same weakness: strong on investments, weak on the family side. That's a ticking time bomb. As one family office executive put it: “Can you honestly call yourself a family office if you have no idea what happens if the founder dies?”

Our new data dashboard makes benchmarks like these much easier to use, bringing peer data on governance, staffing, costs, compensation and service-provider spend into one place rather than leaving it buried across individual reports.

There is another reason families reach this point: the old advisory model stops working. A lawyer in one country, an accountant somewhere else, several private banks and a collection of investment managers may all be excellent individually. The problem is that nobody owns the whole picture. Tax, investments, trusts, succession and family decisions increasingly collide. One of the most valuable functions of a family office is simply to make sure the left hand knows what the right hand is doing.

After two decades advising international families, Brandts-Giesen argues the real threats sit inside the family, not outside it: “Poor communication, unclear authority, unresolved family dynamics, and reluctance to discuss succession can do more damage than creditors, volatile markets, operational risks, or tax.”

Defining a Family Office

The Family Office Exchange (FOX) defines a family office as “a unique family business that is created to provide tailored wealth management solutions in an integrated fashion while promoting and preserving the identity and values of the family.” 

Strip away the jargon and you get the essence: family offices are about identity. That’s why the why matters so much.

As one family office CEO in Singapore reflected: 

“Is there a gap between what the family needs and what the family office provides? If that’s the case, it goes all the way back to what the purpose of the office is. Why is it there? What is its role? What was the vision of its founders?” 

In other words, it all circles back to purpose.

What even is a family office?

It’s worth admitting something up front: nobody really agrees on what a family office is.

Regulators haven’t settled it either. The US SEC’s 2011 Family Office Rule describes offices set up by wealthy families to manage their wealth and look after family members, typically families with $100 million or more of investable assets. Under the rule, the office can only serve family clients, should be wholly owned by them and can’t present itself to the public as an investment adviser. But the rule was written to exempt family offices from the Investment Advisers Act of 1940, rather than to define them. And in Singapore, the Monetary Authority of Singapore acknowledges that “single family office” isn’t defined in the Securities and Futures Act at all.

About the only distinction everyone accepts is the split between a single family office, which serves one family, and a multi-family office, which serves several. Beyond that, most definitions lean on one of four tests, and each one has limitations:

A mindset and a methodology. Edward V Marshall of Presage Advisors says that the answer is to stop defining family offices by wealth thresholds, task lists or fixed goals, and to see them instead as a way of working with one overriding objective, whatever the family’s size, ambitions or style: improving the family’s quality of life.

Putting the mindset to work

So how does a family turn that mindset into something the office can use day to day? The Family Office Decision Framework, developed by Presage Advisors does it by putting every activity through a single question.​

The question is simple: does this activity improve the quality of life for the family? If the answer is yes, the activity earns its place, and the office then works through it in order. It maps the activity to the family’s strategy, decides what resources to put behind it, carries it out, manages the risks, and measures the results through proper performance management.

If the answer is no, the next question is why the office is doing it at all. Plenty of family office activity exists because it always has, because a previous adviser set it up, or because a peer family does it. Where the answer is uncertain, the framework says to re-evaluate whether the activity is needed and then put it back through the same test. In our view, anything that keeps failing that test is a strong candidate to stop.

The framework works for the principal and for everyone employed by or advising the family. Asking the question before taking something on is a quick way to cut out activity that costs money without making anyone’s life better.

The founder's letter

Here is an exercise we recommend before any adviser is hired, any jurisdiction is chosen, or any entity is formed. The founder writes one page, addressed to their grandchildren, answering a single question: What is this money for?

Not the mission statement. Not the values framework. One page, in plain language, that a 15-year-old could read.

It works for three reasons. It forces the founder to say out loud whether the goal is preservation, growth, or something else. It becomes the reference document when the family council argues about risk in 2036. And it gives the first hire something to read on their first morning that isn't an org chart.

The Cost Question

Of course, none of this is cheap. Running a family office is a serious overhead, not a side project. 

Family offices are undoubtedly in vogue right now. Families that treat it as a status symbol rarely last. The hard-nosed question is whether the complexity and risks justify the expense. (We’ll dig into the numbers in the next part.) 

Given the costs involved, a founder must ask whether the complexity and risks are worth the spend.

What a Family Office Actually Does 

A common social media response to the idea of a family office is: “Why bother? Just buy the index and chill.”

This is absolutely the right advice for some people, but it misses two things: family offices are about much more than investing, and the investment challenge itself is often far more complex than “buy the index and chill.”

There’s much more to family offices.  

Functions can span a wide range:

Treat this as a menu rather than a checklist. Some families will need almost all of it, others very little, and each will mix in-house and outsourced help differently. What ties it together is the purpose above: making the family’s life better, safer and simpler.

The family office sits at the centre of a much wider ecosystem, coordinating everything from investment and tax planning to governance, philanthropy and family services. The mix will vary by family, but the value is in bringing these moving parts together.​​

The Emotional Side

Money is often easy compared to family. And emotions can often override financial logic. A cousin feels excluded. A sibling wants dividends instead of reinvestment. A spouse distrusts advisers. 

Wealth is the great amplifier, and family tensions are no exception. 

This means family offices often have the difficult role to mediate between financial logic and emotional reality. One practical consequence: the first non-family hire needs the temperament of a diplomat as much as a banker or administrator. We'll come back to this in Part Four.

Dr Clarisse Lafleur, who advises families on succession and next-generation engagement, grew up inside a multi-generational business family and described to Mr Family Office the dynamic between father and herself: “He had never intended to exclude me. Like many founders, he had simply been focused on building. He assumed I would ask if I wanted to know more. I assumed he would tell me if he wanted me involved. Neither of us was wrong, but neither of us had started the conversation.” Her own summary of those years is worth sitting with: “Looking back, I realize I confused freedom with distance.”

Getting the Why Right

So why open a family office?

Not to copy peers. Not as a status symbol. Not because it “sounds sophisticated.” Not even to chase investment returns.

The real reasons are deeper:

The where, the how and the who come later.

Closing Thought: Families often underestimate just how much the initial definition shapes everything that follows. 

A sloppy “why” leads to decades of firefighting.  A clear “why” creates the foundation for generations.

Lafleur puts the same idea in terms of what a family has to do rather than what it can assume: “Continuity is never something families can simply assume. It requires intention, preparation and trust. And perhaps most importantly, it requires the willingness to ask the difficult questions before they become urgent.”

Decision Gate One​

​Before you move on, you should be able to complete these three sentences in writing, and the founder and the next generation should agree with all three:

If any blank is empty, or the founder's answer differs from the heirs', you're not ready for Part Two. That's fine. It's much less costly to find out now.

Key takeaways from Part One

Coming up in Part Two

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