Family offices provide a private wealth management advisory team for wealthy families, also known as high-net-worth individuals (HNWI). These offices can offer a long list of benefits for the families involved and essentially set up the current and future generations for success, prominent wealth growth, and sustainability. Family offices can offer budgeting, charitable giving, insurance, tax planning, and much more to ensure the family has the proper tools and resources to grow.

However, depending on the family involved, one type of family office might be more beneficial than the other. It is essential to assess your family and what you need in the future to choose the proper type of family office. This can ensure that your family’s priorities are met and that you are working with an office that has the capacity to work with you.

Multi-Family Office (MFO)

A multi-family office provides the same amenities as most family offices, but they manage the wealth of multiple families simultaneously. These might be less expensive than other family office options because of the number of families under their roof, but they bring the same expertise in budgeting, wealth education, transfer of wealth plans, and other necessities for HNWIs. Multi-Family offices can either be already established groups where a family can join or families that come together to form a family office together.

One thing families might find lacking within multi-family offices is personalized attention and tailored help, as multiple families are taken care of within the office; however, these types of offices focus on customized services and solutions centered around the possible needs of the families they take on.

Single-Family Office (SFO)

A single-family office comprises carefully selected wealth managers and advisors to work with the family personally. They are typically formed by a family looking to garner the benefits from the family office structure, wanting to preserve and grow their generational wealth.
This can be an ideal route for private and personalized support for a growing family. A single-family office requires a more significant investment to start but can greatly assist in tax regulation and compliance, reporting and accounting, real estate investment, and other specialized services.

A single-family office can be the answer for a family looking for internalized assistance and the privacy needed to make personal and professional decisions.

Virtual Family Office (VFO)

Virtual family offices have become increasingly prevalent in a growing virtual world. These are ideal for families who wish to outsource all or part of their wealth management team and get the real-time reporting and analysis that comes with using the most recent technology. A virtual family office can supply accounting and reporting, administration, analysis, document management, and communication to families spread out worldwide faster than before.

With the increase in cyber security and protection, this option has become more viable through the years. While privacy can still be a concern, a virtual family office can offer a less expensive opportunity as there is no need to hire employees on top of other family expenses.

Other Types To Remember

There are specific types of offices to remember when considering building your own family office or finding one that suits the needs of your endeavors. Options such as an investment office can help families who are focusing on their equity and want to strategize investment plans, risk, and asset classes. On the other hand, a philanthropy office supports the goals of philanthropically-minded individuals and helps spread their wealth to related causes.

A founder’s office is there for the founders of large businesses and helps with ownership structure, financial issues and planning, real estate management, and other significant decisions for businesses. These and other office types can be found within many MFOs, SFOs, and VFOs, and it is up to your goals as a family and for your wealth to choose what would bring the most value to your future.

If you have further questions about family offices or wish to see what it would look like to get involved with one, reach out to the team at Family Office Association.