A family office is a powerful tool for UHNW families to manage wealth, assets and legacies. They can offer a personalised service based on each family’s specific needs and goals to manage, sustain and grow their financial and nonfinancial assets.
In this article we look at what a family office is, how to set one up, the different types of family office and what services they can provide.
What is a Family Office?
A family office is a private, tailored advisory firm that serves ultra-high-net-worth individuals (UHNWI) in managing the wealth, assets and legacy of a family with the ultimate goal of long-term wealth preservation and personalised financial management.
They are designed to handle a family’s entire portfolio, including investments, philanthropy, insurance, tax services, estate planning, lifestyle management and more.
What is the difference between a family office and a private office?
Family offices traditionally focus on wealth management, while private offices mostly manage the personal and business aspects of clients' lives without providing financial and banking services.
What is the difference between a family office and a trust?
A trust is a legal entity, used to manage assets for the benefit of beneficiaries, while a family office is a private company or services firm, which provides financial and administrative services to a wealthy family.
Why Do People Set Up a Family Office?
There are many reasons which a family may consider setting up a family office, such as accumulation of wealth and assets, demographic shifts, changing investment preferences and/or expansion of the family itself.
Key benefits include:
- More privacy and control having a dedicated team managing family matters discreetly.
- Legacy planning that supports wealth transfer across generations.
- The flexibility to create solutions tailored to a family’s unique needs.
- More influence over their investments.
How Does a Family Office Work?
A family office provides a wide range of services tailored to meet the needs of UHNWIs.
Providing advice and services to ultra-wealthy families covers multiple areas of expertise and as such requires a well-coordinated, collaborative team of specialists.
Core functions include:
- Investment management
- Tax planning and compliance
- Estate and succession planning
- Lifestyle management
- Philanthropy
- Administrative services
The key roles required when setting up a family office, include:
Investment Manager
An investment manager is a financial professional who specialises in managing investment portfolios. They are responsible for making investment decisions, conducting research and analysis, and managing risks to achieve their clients' financial objectives.
Tax Advisor
A tax advisor is a financial expert with advanced training and knowledge of tax accounting and tax law. They provide advice on strategies to minimise taxes owed while staying within the scope of the law and regulation.
Family Office Assistant
A family office assistant provides administrative and operational support to high-net-worth families, handling tasks like managing appointments, coordinating travel arrangements, overseeing the maintenance of all properties and managing household staff. They ensure the smooth running of family and business affairs and can assist in managing the family's philanthropic activities, as well as commercial ventures.
For further information on what a family office assistant can do, read our Family Office Assistant Job Description Template.
How Much Wealth is Typically Needed to Justify Setting Up a Family Office?
Setting up a family office typically requires a significant level of wealth. The cost of establishing and maintaining a Family Office is guided by the nature of the firm and the service it provides as well as whether it is a Single or Multi Family Office with shared overheads.
Single Family Offices typically start at around $250 million in assets under management.
What Are the Different Types of Family Office?
How a family office is set up depends on the requirements of the UHNW families and the amount of money involved. Different types of family offices include:
Single-family office
A Single Family Office focuses on the assets and desires of a single family, benefiting from a completely tailored strategy and service and enhanced confidentiality.
Multi-family office
A Multi Family Office manages the wealth of multiple families. This structure means expenditures and overheads are shared, whilst still providing access to a wide range of expertise.
Virtual family office
Virtual family offices provide the same services as a traditional family office but without the need for a physical office space. Typically, the team will collaborate remotely to provide the family with the services they need. By leveraging technology and outsourcing non-core functions, many services can be delivered at a lower cost, particularly valuable for smaller families.
What Services Do Family Offices Provide?
Most family offices are initially created to manage the family’s financial wealth, however, the scope of support that might be provided can be very broad.
Typical types of services can include:
- Strategic wealth and investment management
- Tax and legal planning
- Philanthropic oversight
- Succession planning
- Administrative services
- Family governance
- Household staffing
- PA and concierge support
Scaling Your Family Office
As a family’s wealth, dynamic, mission and / or size changes over time, as does the requirements of the family office which needs to remain agile to adapt to the changing support required. Depending on the demands, there could be the need to bring additional expertise in house, by hiring new talent.
These positions could include:
- Philanthropy advisors
- Legal counsel
- Lifestyle managers/Private PAs
Learn more about the roles of a lifestyle manager and a private PA.
Oriel Partners is a specialist PA and administrative recruitment company based in Central London. We are highly experienced at finding the right family office support for our clients and understand this is an incredibly personal endeavour; one that requires skill, insight and discretion.
Our senior family office recruitment consultants are highly experienced and will handle your brief with the utmost care and discretion, focusing on candidates who are the right cultural fit for you and your team.
For more information about our services and how we can help you, please visit Family Office Recruitment page.
Challenges and Downsides of a Family Office
Although the dynamics of each family office is unique and aligned to the UHNW family it serves, there are common challenges and responsibilities.
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The high costs associated with running a family office – not only paying for salaries and the legal additions that come with this (pension, national insurance) but also overheads such as office space, equipment, insurance etc.
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Governance issues and the potential conflicts within families or with external advisors – often members of the family will hold executive and C-suite positions within family offices. Establishing effective structures including family protocols and maintaining clear communication channels is critical to mitigating potential conflicts.
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Operational risks - such as reliance on a small team or poor management decisions.
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Succession planning - Ensuring a smooth transition of leadership and decision-making from one generation to the next can be complex. It is therefore vital for families to plan ahead to ensure the necessary structures are in place now to ensure a smooth transfer of assets in the future.
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Engaging the next generation – it is important to educate and prepare younger family members for their future responsibility and provide a clear understanding of what the family office is trying to achieve. In addition to this, knowledge of the financial and global market will equip the next generation with the knowledge to make robust investment decisions when the time comes.
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Technology - ever changing, technology can be a great way to streamline operations, enhance investment analysis, and improve proper reporting. Therefore, a family office must remain agile and open minded to change to ensure they don’t get left behind.
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Cyber security - with the rise in cyber threats, it is vital family offices invest in vigorous security measures to safeguard sensitive and confidential information.
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Attracting talent – a family office may employ talent across many different specialist areas. This could include legal and tax experts, accountants and administrative staff. Therefore, the skills required will vary hugely but attracting and retaining the best talent who come with the highest standards and experience can be challenging.
When Should You Consider Setting Up a Family Office?
There are many catalysts that may prompt a family to consider establishing a family office. As a family office can take a variety of forms, and serve one of multiple families, it is important to define the overall purpose and vision of the family office to ensure it is the right time to set one up and what form it will take to ensure long-term success.
Things to consider are:
- Reaching a certain wealth threshold
- Increasing complexity in managing assets or businesses
- Planning for intergenerational wealth transfer
- Expansion of the family
- Dissatisfaction with more traditional wealth management services
For more practical advice to help guide your decision-making, I recommend you read this excellent article from Deloitte on The Art of Forming Your Family Office.
What Can You Expect to Pay Family Office Staff?
Salaries within family offices vary widely and are influenced by several key factors. Each factor plays a role in determining a competitive compensation package, from the level of responsibility to location and specialised skills.
Investment Manager
The average salary is £78,015 per year however this can range hugely depending on the level of experience you require, location or role, whether hybrid working is provided and other benefits on offer.
Tax Advisor
The average salary is £45,417 per year, in addition to this are benefits and bonuses which can increase the overall package extensively.
Family Office Assistant
Private PAs or Assistants in family offices generally earn between £55,000 and £120,000, with most salaries falling within the £60,000 to £80,000 range. They provide high-level personal support to family members, including managing complex schedules, arranging international travel and overseeing personal projects or events. If there is a requirement for the PA to be on call outside of typical office hours, then a premium can be added.
Office Manager
Family office managers are typically compensated between £55,000 and £90,000. This role requires a high level of expertise, as family office managers oversee the office’s operational structure, manage staff, and often handle high-level financial and investment coordination.
For more detailed information on what competitive pay looks like for family office roles, please read our guide on family office salaries.
The guide offers insight into typical salary ranges for various support roles, including PAs, EAs, and administrators, helping you benchmark compensation effectively.
Why Do People Want To Work for Family Offices?
We see a demand for candidates wanting to move away from larger corporate firms and into smaller, more focused family offices where they can have a greater involvement with the principles they support and a larger impact with the work they provide.
In addition to this, candidates like the ‘family feel’ of a family office and being part of a small team where they can see a process through from initiation to completion.
Working for a family office can also provide other benefits depending on the family’s interest. For example, if the family are passionate art collectors, or are into certain sports, they may give their team access to events which otherwise would be unattainable.
How Recruitment Impacts the Success of a Family Office
Hiring the right people for your team is critical to the success of any business. Not only are the right skills and experience required, but also the right cultural and team fit to ensure cohesion. This is never more important than in a family office, where you want the employees to be aligned with the family's personal vision and goals.
At Oriel Partners, we have decades of experience in recruiting for family offices and placing high calibre and impactful candidates. If you are looking to hire, we would love to hear from you. Please visit our Family Office Recruitment page to learn more about our services and how we could work together.
- Meticulous — We screen and interview all our candidates before considering them for a position.
- Confidential — Privacy is important to us, and we won’t jeopardise yours.
- Experienced — Both our senior consultants and family office candidates are highly skilled.
- Bespoke — We pride ourselves on our personalised service; your brief is our priority.
- Attentive — Before we consider suitable candidates, we listen carefully to your requirements.
- 360° Service — We cater for all roles, including receptionists & PAs, from juniors to chief of staff.
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