A family office organises a family’s wealth the way a company organises its business. But a dedicated structure carries fixed costs that only pay off above a certain size. When it makes sense, and what the alternatives are.
“Family office” has become a fashionable term. It is used for everything, from large structures with dozens of staff to a family’s trusted accountant. For anyone thinking about organising their wealth — often after selling a business — it is worth understanding what a family office is, what it does and when it pays off.
What a family office does
A family office is the structure that manages a family’s financial affairs in an integrated way. The most common functions are:
- Consolidation and reporting. A single view of all the family’s wealth, across every bank and asset.
- Investment strategy. Setting the allocation, choosing and monitoring managers, assessing direct investments.
- Direct investment. Stakes in companies, real estate, co-investments.
- Governance and succession. Decision rules, preparing the next generation, coordinating with lawyers and tax advisers.
- Administration. Accounting for the structures, insurance, property management, payments.
The three models
Single family office
A structure dedicated to one family, with its own team. It offers full control and maximum confidentiality, but carries high fixed costs: qualified professionals, systems, office, audit. A frequent rule of thumb in the industry is that it is only justified for wealth in the order of several tens or hundreds of millions of euros, so that the annual cost does not consume a significant share of the returns.
Multi-family office
A structure serving several families and sharing the costs. It gives access to professionals and investment opportunities that a single family would not have, with less control and less personalisation. It is the natural option for wealth from a few million euros upwards.
Independent advice
For many families, the most efficient solution is not to have a family office at all, but an independent adviser who covers the essential functions — consolidating, setting strategy, assessing opportunities, coordinating specialists — and works with the banks and lawyers the family already uses.
Signs that the time has come
- The family has sold, or is selling, the business and is about to receive liquidity it has never had.
- The wealth is spread across several banks and nobody has a view of the whole.
- Direct investment proposals keep arriving and there is no structured way to assess them.
- The next generation is coming of age and rules need to be set.
- The head of the family’s time is now taken up by managing the wealth.
The most common mistakes
The first is setting up a structure before defining what it is for. A family office without clear objectives becomes a fixed cost in search of a justification. The second is confusing wealth management with product sales: a provider paid by the products they place is not in a neutral position. The third is underestimating governance: the structure serves the family, and the family needs rules in order to decide.
How to start
The safest path is gradual. Begin by consolidating and setting objectives; then choose the model that serves those objectives at the lowest cost; only later, if the size and complexity of the wealth justify it, move to a dedicated structure.
GestInvest supports business-owning families on this journey, particularly around liquidity events and the arrival of the next generation. Read more about family office services and private wealth and family.
Frequently asked questions
Does a family office replace the bank?
No. Banks continue to hold the assets and execute transactions. The family office decides, coordinates and monitors, on the family’s side.
How much does a family office cost?
It varies widely with the model. A dedicated structure has significant annual fixed costs; a multi-family office or an adviser usually charges a percentage of the assets overseen or a retainer.
Do we need to set up a company?
Not always. Many families start without a legal structure of their own. Decisions on holding companies and vehicles should be taken with tax and legal advice, once the objectives are clear.
