Family office services – A comprehensive guide to structuring and preserving wealth

You have spent years building your wealth to support your family, loved ones, or causes you care about. Like many high-net-worth individuals, you may already know that managing your wealth isn’t simply about asset growth — it’s about preserving your legacy, simplifying your life, freeing up time for personal passions and hobbies, and supporting strategic decisions that could positively impact future generations of your family.

At a certain point, traditional wealth management may no longer be sufficient for your needs and goals. You may be overwhelmed by the complexity of your financial picture, with multiple professional services firms managing your tax compliance, legal, and accounting needs.

This is where a family office can come into play. Family offices are effective, sophisticated vehicles that can streamline your financial life while taking your wealth and legacy to the next level. Below, we explore the various types of family offices available to you, plus key indicators that could trigger the need for a family office.

What is a family office, and what does it do?

A family office is a private advisory function that provides coordinated wealth management, tax planning, and financial services to affluent individuals and families. Under U.S. securities law, a “family office” has a specific meaning: the Securities and Exchange Commission’s family office rule excludes qualifying offices that serve only family clients from registration as an investment adviser.

Unlike a traditional wealth manager who focuses mainly on your investment portfolio, family office professionals take a coordinated view of your entire financial life. The core purpose is to help you preserve, grow, and transfer your wealth with confidence — centralizing the management of your assets, coordinating your advisors, and handling the day-to-day administration so your family can focus on what matters to it.

That work goes well beyond asset allocation. A family office helps bring income tax planning, estate structuring, risk management, philanthropic strategy, and family governance together, so that every decision reflects your broader goals and family values.

Do you need a family office? Recognizing the complexity triggers

Family offices typically benefit individuals or families with complex situations or wealth goals that demand a more strategic, integrated approach. You may assume that the decision to start a family office depends solely on your net worth, but the process is more nuanced than that.

While the entry point for most families is roughly $50 million+ in net worth, the real trigger for family office establishment is operational and financial intricacy. Examples include:

• A complex and vast range of financial and personal assets
• Desire for more coordinated professional oversight
• Increase in personal demands or desire for more family time
• The need to focus more closely on financial, investment, and/or tax issues
• Concerns about family unity or your legacy

For example, if you manage multiple entities, such as businesses, trusts, foundations, or real estate holdings, and you struggle with maintaining a clear financial picture of how your assets interact, then you may be the perfect candidate for a family office structure. More specific examples and triggers include the following:

• You need a consolidated financial reporting and tax strategy to support multiple legal entities.
• You own diverse assets (i.e., collectibles or artwork) that require specialized oversight and valuation.
• You’re managing and governing intergenerational wealth, with multiple branches of your family involved in financial decision-making.
• You lack centralized oversight of your wealth, making it difficult for you to coordinate advisors, track performance, or plan holistically.
• You’re experiencing administrative overload, from bill pay to philanthropic giving to estate planning.

SFO vs. MFO vs. VFO: The three family office models compared

Family offices are not one-size-fits all. Depending on your needs, you may choose one of three primary structures: the Single-Family Office (SFO), the Multi-Family Office (MFO), and the Virtual Family Office (VFO). Each offers a different balance of control, customization, and cost.

Single Family Office (SFO): This model is ideal for families with wealth needs that require full control and customization. SFOs function like a private business, employing a dedicated team, including CFOs, tax professionals, and investment managers, to serve one family exclusively. If you need privacy, control, and a tailored approach to managing complex, multigenerational wealth, an SFO is likely the best option for you.

Multi-Family Office (MFO): The MFO model serves several different families under one umbrella; it offers many of the same services that SFOs do but without the overhead. You might choose an MFO structure if you want comprehensive support without the time and effort required to build an in-house team. Furthermore, it’s important to note that there are two different types of MFOs families and individuals can choose from, based on their unique needs and circumstances:

• Commercial/Institutional MFO: This type of MFO serves multiple families and provides a broad range of services and benefits — including a cost-sharing structure, diversified experience, and unique investment opportunities. These types of MFOs are typically less customizable than other family offices.
• Private MFOs: These types of MFOs often serve a very limited number of families and are tailored specifically to their needs and objectives. Private MFOs may charge higher costs compared to commercial MFOs; due to the exclusivity and personalized nature of the services they provide. Families who participate in private MFOs receive more customized solutions and typically have more control over their investments, strategic decisions, discretion, and confidentiality.

Outsourced/Virtual Family Office (VFO): VFOs are ideal for families at the base of the net worth threshold (i.e., $30–$100 million). At this stage, your family’s wealth needs may not be complex enough for an SFO but are too elaborate for standard wealth management solutions. VFO models provide you with consolidated services — tax, accounting, estate planning, and more — under one provider, giving you a holistic, cost-effective solution without the burden of hiring and managing staff. VFOs also provide more customization, flexibility, and adaptability in their service offerings, as well as access to broad technical know-how, specialized knowledge, technology integrations, scalability, and risk management solutions.

To better contextualize these family office structures and how they work practically, consider these examples:

Example 1: The Smith Family ($1 billion net worth)

The Smith family recently sold its tech company for $1 billion. With multiple trusts, investment portfolios, and philanthropic endeavors under their purview, the family requires a dedicated team to manage their complex financial landscape. The family also wants to have full control over their strategic, financial, and investment decisions, which means MFO and VFO structures would not be good fits for their needs. By establishing an SFO, the Smiths will be able to retain full control and customization over their wealth management, while also maintaining total privacy and confidentiality.

Example 2: The Patel Family ($200 million net worth)

The Patel family’s wealth is spread across several businesses, real estate holdings, and a private foundation. The family struggles with keeping track of their financial activities and asset flow; they need a more centralized system to manage their financial house more efficiently. In this case, the Patels choose to start their family office with an MFO, which will streamline their operations and help ensure effective wealth management, but with a separate team in charge of managing the administrative burden. While their asset portfolio isn’t quite at the level of an SFO, they still require a higher level of privacy and confidentiality, which is why they opt to partner with a private MFO instead of a commercial MFO.

Example 3: The Lee Family ($75 million net worth)

The Lee family has accumulated its wealth through a combination of commercial real estate investments, a successful logistics business, and a growing philanthropic foundation. While the Lees don’t meet the complexity thresholds for an SFO or MFO, their financial landscape has become increasingly complex and extends beyond the bounds of what traditional wealth management services offer.

Rather than hiring a full in-house team, the Lee family engages a VFO provider. This firm handles their tax planning, accounting and bookkeeping for their business entities, consolidated reporting, bill pay, and estate planning all under one roof. What’s more, the family will benefit from a centralized point of contact, an integrated wealth and tax strategy, and the flexibility to scale services as their needs evolve without the overhead of building their own office.

How much does a family office cost?

Cost varies widely by model and by the range of services you need. The figures below are general industry ranges to help you frame the conversation, and your actual cost depends on complexity, asset types, and the services you use.

• Single-Family Office (SFO) is the most resource-intensive option. Building and retaining a dedicated team is costly; industry estimates commonly place annual operating costs in the range of $1 million to $3 million, and often higher for offices with full investment, tax, and legal staff.
• Multi-Family Office (MFO) spreads infrastructure costs across several families. Fees are often charged as a percentage of assets under management (AUM), commonly in the range of 0.5% to 1%, though structures vary by firm.
• Virtual Family Office (VFO) typically works on a retainer or fee-for-service basis, since you are not funding full-time staff or physical infrastructure. Costs scale with the services you use.

What services does a family office provide?

A comprehensive family office should address the full spectrum of your financial life. When evaluating providers, use this checklist of core capabilities.

• Tax planning and structuring: Coordinated planning that aligns current needs with long-term objectives, including the tax implications of liquidity events, state and local tax obligations across jurisdictions, entity structuring, and international tax compliance for global assets.
• Consolidated asset management: A robust asset allocation strategy and consolidated performance reporting, giving you a single, unified view of your balance sheet so you can track liquidity, evaluate risk, and make informed decisions.
• Accounting and financial reporting: Day-to-day operations such as bill pay, cash flow management, and entity-level accounting, plus standalone and consolidated multi-entity financial statements.
• Estate and succession planning: Trusts and estate structures designed with your legal counsel to help preserve family wealth and promote estate and gift tax efficiency, plus business succession planning that helps prepare the next generation for leadership.
• Family governance and education: Formal governance models, including family constitutions, family councils, and a shared mission statement, alongside education that helps prepare younger family members for the responsibilities of wealth.
• Philanthropic planning: Help evaluate giving vehicles such as private foundations, donor-advised funds, or charitable trusts, plus administration and alignment with your overall tax and wealth plan.
• Risk management and cybersecurity: Coordinated insurance reviews for property, collections, and personal liability, plus data security measures that help safeguard sensitive financial and personal information.

How do you choose a family office provider?

Selecting a provider is one of the most important decisions you will make for your family’s financial future. Remember, you are choosing a partner who will be involved in your life for decades. Weigh the following factors.

• Breadth of knowledge and services: Look for deep capabilities across tax planning, estate structuring, accounting, and investment management, with specialists who understand the challenges of your industry and wealth background.
• Technological infrastructure: Ask whether the firm can provide a consolidated view of liquid assets, private equity commitments, and real estate on a single dashboard, with robust digital safeguards for your confidential information.
• Flexibility and scalability: Choose a provider whose services can scale as you sell a business, expand internationally, or establish a foundation, without forcing you to switch firms as your net worth grows.
• Cultural fit and communication: You need advisors who listen, speak plainly, and act as an extension of your family, sharing your values and operating with integrity and genuine care.

How do family offices handle real estate and private investments?

For many families, real estate and private equity form the cornerstone of generational wealth, but these assets add operational complexity and call for rigorous oversight. A family office helps you weigh the risk and reward of different approaches, from direct investing (more control and upside, but more due diligence) to fund investing (diversification and professional management, with less direct control).

Family offices are also closely involved in the governance of family-owned real estate businesses, where succession planning is uniquely challenging.

Final thoughts: Choosing the right family office structure

If you are toeing the complexity threshold and anticipate that your wealth needs will grow even more complex, you should consider starting the family office conversation now. When the complexity of your financial world starts to feel like a full-time job, it may be time to bring in a team that can help you run it like one. Schedule a consultation with Aprio’s Family Office Services team and start exploring your options today.