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What is a Family Office?

What is a Family Office?

There has been quite a buzz over recent years about the growth of family offices in Europe.  This has been seen by many as a time-lagged repeat of the US phenomenon, which occurred towards the end of the last century.  Such an assumption would not seem unreasonable and would appear to have its precedents; the growth in US private equity funds was mirrored by a similar growth in Europe some years later.

However we believe that this theory contains an important central assumption that the growth of family offices in Europe is the growth of an “industry”, implying that there are great similarities between the family offices that have been born or have grown.  In our experience the reverse is true; there is a massive range of diversity regarding what those organisations which call themselves “family offices” actually do.

Here we examine the different kinds of Family Office, in approximate order of ascending complexity. (Please note, these categories are not mutually exclusive and Family Offices can bear the hallmarks of some or many of these categories).

Types of Family Office

The Personal Assistant

Sometimes the family office can be essentially a PA service.  The family needs someone to help them with their daily needs (which can be anything from drafting letters to arranging flights and accommodation to walking the dog) and the Personal Assistant is at their beck and call.  In this instance the family office is essentially a convenience.

The Concierge/Lifestyle Manager

When these needs become more complex the emphasis shifts and the family needs a more proactive service than a Personal Assistant.  A Concierge or Lifestyle Manager can monitor and deal with more complex issues such as household staff management, placing insurance across the family assets, liaising with charities that the family support, and sometimes simply being a listening ear for family members.  The type of person who manages this sort of office usually has deep experience in a professional services firm or a concierge firm.

The Financial Office

In addition to managing lifestyle needs, often the family needs someone who can manage their day to day financial affairs, paying bills, placing fixed deposits, paying household staff and managing day to day cash needs.  Often this person is a book-keeper or accountant and is on many occasions someone who has been known to the family for some time, perhaps working as an accountant in their family business.

The Family Business Office

We have come across family offices whose main purpose is to act as the eyes and ears for the family in their directly owned businesses.  In this sense, the disparate businesses that the family might have invested in need someone to act as “head office” to ensure that the businesses are not unnecessarily competing with each other and to ensure good corporate governance.  The individuals working in this sort of family office usually have strong experience in business management and may often sit as a director on the investee companies.

The Administrative Family Office

Sometimes a client of a bank or a fiduciary services firm will have many complex structures in place to manage their financial and personal affairs.  The administrative burden of managing those structures sometimes creates the need to have a full-time, dedicated team whose main purpose is to ensure that the companies and trusts within the structure are being managed effectively. 

The Family Investment Office

This type of business is usually staffed by investment professionals.  Their main raison d’etre is to take the family’s wealth that sits outside of the personal assets (homes, planes, boats etc) and invest it, often under their own discretion, with the objective of achieving a client’s required return on investment.  This type of office can have a listed equities focus, a hedge fund focus or even a property focus.  The main characteristic of these types of office is that they live or die by their investment performance, and they are normally remunerated on investment performance or assets under management.

The Trusted Adviser Family Office

This type of office has a deep and trusted relationship with the family to the extent that they have the same “helicopter view” of the family’s financial and personal situation that the patriarch or matriarch does.  This allows the office to be involved in wealth and tax planning, liquidity forecasting, asset allocation and transmission of wealth between generations. 

The Full Service Family Office

This type of family office does much or all of the above.  They therefore have very deep and broad skills.  This organisation requires two key components to be in place:

  • The family have a degree of complexity regarding their affairs. This creates the necessity to manage lifestyle needs, bill payments, manage personal assets such as homes, aircraft and motor vessels, oversee complex investments such as private equity, property interests or even classic car collections, and may also include managing the family’s charitable foundations
  • There is high degree of trust between family and family office professionals. This is essential to allow the professionals to become Trusted Advisers as referred to above.
The Full Service Family Office

The diagram above shows that the client family sit at the heart of the organisation.  The Full Service Family Office professionals act as the gatekeeper between family and external advisers, supervise their performance, and take and implement their advice.

Single or Multi? 

Complicating the situation even further, it is possible that a Family Office can deal with one family or more than one.  This has given rise to the phrases SFO (Single Family Office) and MFO (Multi Family Office).  Obviously when you combine this with the types of organisations described above, an MFO can mean many things.  Two possible outcomes are highlighted below (remember of course that the two might not be mutually exclusive).

Investment Multi Family Office

A Family Investment Office which deals with more than one family is usually referred to as an MFO.  In this sense it is like a boutique investment house which is managing the investment assets of a number of client families.  There are some highly respected modern financial services firms who originated as Investment MFOs.  Investment professionals are almost always the driving force in such an organisation as they bill the client based on investment performance and assets under management.

Professional Multi Family Office

This type of organisation is usually focused around supporting all the complex needs of the families.  The following list provides examples of what such an organisation will do:

  • Family and corporate governance
  • Trustee and administration services
  • Wealth, estate and succession planning
  • Managing philanthropic interests
  • Co-ordinating, managing and reporting on asset positions
  • Overseeing complex financial investments such as real estate and private equity
  • Overseeing and managing private assets such as super yachts, private aircraft, classic car collections and personal luxury assets such as jewellery and private art collections

First Generation or Beyond?

One final point is that one should consider which generation the family office services.  If it is a seventh generation family office then the relationship between family members can be quite distant and the family office has to balance the differing needs of this diverse group in the same way a company would balance the needs of its individual arm’s-length shareholders. 


In conclusion, it should be pretty clear from the above that the term “family office” can be applied to pretty much anything you like.  The label has been so freely applied to organisations which would appear to have little similarity to each other (other than the fact that they help wealthy families manage their affairs in some way) that to outsiders it can be opaque.

Therefore any adviser who is dealing with a family office should:

  • avoid blanket assumptions about what goes on in the family office
  • be prepared to ask what the family office actually does to understand what qualifications and skills they have

About the Authors

Grant BarbourRichard Joynt and Amy Collins are Directors of Ocorian's Family Office services.  Their client families include those of first, second and third generation wealth.  Each family has the need for bespoke and highly personalised services due to their individual complex needs. 

This article forms part 1 of our three-part Family Office series. 

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