Email FacebookTwitterMenu burgerClose thin

Family Offices and Ultra-High-Net-Worth Families


Does your wealth management strategy feel inadequate? In the complex world of wealth management, ultra-high-net-worth families often find themselves needing more personalized and comprehensive services than traditional wealth advisory firms can provide. This is where the concept of family offices comes into play. Family offices are private wealth management advisory firms catered particularly to ultra-wealthy families, managing their personal and financial matters. For everyone else, there are financial advisors

What Is a Family Office and Do You Need One?

Representing more than just a wealth management service, a family office is a private company that operates exclusively for a single wealthy family’s benefit. Their duty goes beyond financial planning and investment management; they bear the responsibility for a broad spectrum of roles like estate planning, risk management and philanthropic planning. 

They even concern themselves with matters related to family governance and continuity planning. In an environment where financial portfolios can often complexly intertwine, family offices’ holistic approach is invaluable. 

Key roles include refining the complicated process of governance and family continuity planning, a critical component ensuring long-term preservation and distribution of wealth. They also oversee a cohesive coordination of professional advisors like lawyers, accountants and trustees, to minimize miscommunication and maximize wealth preservation and growth. 

Guided by a financial advisor, families can identify if a family office is an appropriate solution for their wealth management needs.

Are Family Offices Only For the Ultra-Wealthy?

Historically, family offices were a privilege enjoyed by families with assets in the hundreds of millions or billions. Today, however, they’ve evolved, adding a level of inclusivity previously unseen. Many family offices now extend their comprehensive services to families with lower levels of wealth. 

While some industry professionals suggest a minimum of $100 million in liquid assets, this threshold varies, making the benefits of a family office accessible to a broader pool. Not to imply family offices are superior choices for those with fewer assets, but they are simply another viable option to consider.

Types of Family Offices

Ultra-high-net-worth family on a sailboat

Family offices come in three main types, each with its own advantages: 

The traditional family office, a private company wholly owned by the family it serves, offers personalized service tailored to its specific needs. Meanwhile, an outsourced family office allows a family to contract an external organization to manage their financial affairs, easily resulting in cost savings and access to a wider range of expertise. Multi-family offices support multiple families simultaneously, spreading operating costs across those families, making for a more affordable choice. 

Family Office vs. Wealth Advisory Firms for Wealthy Families

In direct comparison, both family offices and wealth advisory firms provide financial and investment advice. Still, family offices typically go above and beyond to offer a comprehensive range of services. This distinct differentiation lies in areas like estate planning, philanthropy coordination and personalized service. Unlike wealth advisory firms, family offices involve themselves more in the day-to-day management of their clients’ wealth. However, remember, the decision between the two will always depend on individual circumstances.

When Do You Need a Family Office?

Determining the necessity of a family office is subjective and depends on individual family circumstances. If you’re not sure whether it’s a good fit, you may want to consider asking yourself some of these questions: 

  • Has your family’s wealth become too complex and time-consuming to manage effectively? 
  • Is the wealth in your control exceeding $100 million in liquid assets
  • Do you have personal matters that tie into your finances that you need help with? 
  • Are you looking for ways to pass a considerable amount of wealth on to the next generation?

A family office might be a consideration under some of these circumstances, but remember, it’s not a guaranteed requirement. You may want to first speak with a financial advisor and see if they can help.

The Bottom Line 

Ultra-high-net-worth couple waiting on their wealth manager

Having a deep understanding of the role and benefits of family offices is crucial for families with significant wealth. A financial advisor can shed more helpful insights about family offices and would be an excellent starting point for any family office exploration. Whatever form it takes, a suitable family office can make a world of difference in managing and growing your family’s wealth.

Tips for Wealth Management

  • A financial advisor can help you manage a considerable amount of wealth. Everything from managing your investment portfolio to helping you with your estate plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now
  • A wealth manager is a financial advisor that can help you manage all financial aspects of growing your wealth. This could be a great solution for high-net-worth individuals. 

Photo credit: ©, ©, © Daly