Setting Up a Family Office: A Complete Guide for Ultra-High-Net-Worth Families

For families with substantial wealth, the question of how to manage, protect and grow assets across generations is rarely answered satisfactorily by a single private bank or wealth manager. The family office — a dedicated structure that centralises investment management, tax planning, administration, and family governance — has become the gold standard for ultra-high-net-worth (UHNW) families worldwide. This guide explains the options, costs, and considerations involved in establishing or selecting a family office structure.

What Is a Family Office?

A family office is a private entity established to manage the comprehensive financial affairs of one or more wealthy families. It typically consolidates investment management, tax and estate planning, legal coordination, philanthropy, lifestyle management, and family governance into a single organisational structure. The goal is institutional-quality oversight with the personalisation that commercial wealth managers cannot easily deliver.

Family offices range from a handful of staff managing a single family's affairs to large multi-family platforms serving dozens of client families. Understanding the spectrum is the starting point for any family considering this route.

Single Family Office vs Multi-Family Office

Single Family Office (SFO)

An SFO exists exclusively for one family and is wholly owned and controlled by that family. It offers maximum privacy, control, and customisation. The family sets investment policy, hires staff, controls costs, and determines scope. There is no conflict of interest: the SFO's only client is the family itself.

The principal drawback is cost. Running a credible SFO typically requires a minimum of four to six core staff — a chief executive or family office director, a chief investment officer or investment manager, a finance and accounting function, and administrative support. Including salaries, premises, technology, legal and audit fees, professional indemnity insurance, and ongoing regulatory compliance, a lean but functional SFO costs approximately £1m to £2m per annum in the UK. This makes an SFO economically viable only where family assets are sufficient to absorb that cost without materially impairing returns — generally accepted as a threshold of £100m or more in investable assets, though £150m–£200m is a more comfortable level.

For larger family wealth — £500m and above — an SFO can justify a full institutional team: a dedicated CIO, risk manager, alternative investment specialists, a family governance officer, and legal counsel. At that scale the family office operates much like a boutique asset management firm, with the added layers of family administration and succession support.

Multi-Family Office (MFO)

A multi-family office is a commercial entity that provides family office services to a number of unrelated wealthy families. The cost burden is shared across clients, making the model accessible at lower wealth levels — typically £10m to £50m entry points, though the quality and breadth of service varies considerably.

The trade-off is shared resources and potential conflicts of interest. An MFO that manages pooled investment vehicles or receives third-party product commissions may not act with the same single-minded focus as a captive SFO. Families using an MFO should scrutinise fee structures carefully, understand whether the firm is independent or product-affiliated, and assess how genuinely personalised the service is in practice rather than in marketing materials.

A reputable independent MFO operating on a clean fee basis — charging a percentage of assets under administration, with no third-party commissions — can deliver very good outcomes for families in the £10m–£100m range. The key question is always whose interests are truly being served.

The Outsourced Family Office (OFO)

Between the SFO and MFO sits the outsourced family office: an arrangement where a family appoints a small team of specialist advisers — typically including an independent financial adviser or discretionary manager, a tax adviser, a solicitor, and sometimes an accountant — to work collaboratively under a coordinating relationship. There is no dedicated entity; instead, the family "assembles" its family office by appointment.

The OFO model suits families in the £10m–£75m range who need integrated advice but not a dedicated physical infrastructure. Its limitations are coordination overhead, dependence on the strength of individual relationships, and the absence of a single source of accountability. It works best when one individual (often an independent financial planner) acts as a de facto "quarterback", ensuring all advisers are working to the same plan.

Governance and Staffing

Whatever model is chosen, governance clarity is essential. Key decisions include:

Ownership and control. Who owns the family office entity? How are decisions made? Who has authority to hire, fire, set investment policy, and approve major transactions?

Investment governance. An investment policy statement (IPS) should define asset allocation parameters, permitted and prohibited asset classes, benchmark indices, liquidity requirements, ESG constraints, and the process for reviewing and revising policy. The IPS is the governing document that constrains both internal staff and any external managers.

Staffing. Talent is the single most important variable. A mediocre CIO with a $500m mandate causes more damage than a suboptimal technology stack. Compensation must be competitive with the institutional market: senior investment professionals in London command base salaries of £150,000–£300,000 plus performance-related pay. The family must decide whether to hire from the investment management industry, private banking, or accountancy — each brings different strengths.

Conflicts and oversight. Even an SFO is not free of conflicts: senior staff may have personal investment interests, relationships with service providers, or incentives that do not perfectly align with the family's. Independent oversight — whether a formal advisory board, non-executive directors, or an external audit of fees and performance — is advisable.

Technology: Reporting and Consolidation

The technology stack is the operational backbone. Core requirements include:

Portfolio consolidation and reporting. Families typically hold assets across multiple custodians, asset classes, geographies, and currencies. A consolidated reporting platform — such as Addepar, Masttro, BlackDiamond, or Eton Solutions — aggregates all holdings into a single view. Selecting the right platform depends on the complexity of the portfolio (listed vs alternatives vs real assets vs private equity) and the family's reporting requirements.

Accounting and administration. General ledger systems, entity-level accounting (particularly if the family holds assets through multiple entities), and cashflow management require either dedicated accounting software or integration with the consolidation platform.

Document management. Wills, trust deeds, corporate records, insurance policies, property documents, and family governance materials must be stored securely and accessibly. Cloud-based document vaults with multi-factor authentication and role-based access are the standard.

CRM and communication. Internal relationship management — tracking commitments, family requests, adviser relationships — benefits from a simple CRM. Family communication (particularly across generations or geographies) may warrant a secure portal.

Technology costs for a well-equipped SFO typically range from £50,000 to £200,000 per annum, depending on platform choices and headcount. Families should resist the temptation to over-engineer the technology stack at the outset; a phased implementation focused on core reporting and accounting is more practical.

Regulatory Considerations

In the United Kingdom, the regulatory treatment of a family office depends on what it does.

FCA authorisation. If the SFO makes investment decisions for its principals and does nothing else, it may be exempt from FCA authorisation under the "group exclusion" (Article 69 of the Regulated Activities Order 2001). This exclusion covers activities carried out for or on behalf of the members of the same corporate group.

However, if the family office manages assets on a discretionary basis for individuals who are not members of the same corporate group — including different branches of a family who are not within the same group structure — FCA authorisation will generally be required. Similarly, if the SFO provides investment advice to third parties (even informally), it risks crossing the regulatory perimeter.

FCA-regulated MFOs. Multi-family offices that manage assets for multiple unrelated clients must be FCA authorised, either as discretionary investment managers or as restricted or independent financial advisers. Families engaging an MFO should verify its permissions on the FCA register.

Anti-money laundering (AML) compliance. Family offices handling significant cash flows, international structures, or regulated activities must maintain appropriate AML policies, know-your-customer (KYC) processes, and suspicious activity reporting procedures.

Legal advice from a firm experienced in private client and financial services regulation is essential before establishing an SFO or selecting an MFO.

The Economic Case

The decision to establish an SFO is ultimately an economic one, balanced against qualitative factors such as privacy, control, and family governance.

At £100m of investable assets, SFO running costs of £1.5m represent a drag of 1.5% per annum — comparable to many private bank or wealth manager all-in fees, though an SFO should deliver more comprehensive services and greater alignment of interest. At £250m, the same fixed cost represents only 0.6% per annum, and the economic case becomes compelling. At £50m, the cost burden is too heavy for most families unless there are specific governance, privacy, or complexity drivers.

The MFO and OFO models offer meaningful cost advantages at lower wealth levels. The family should model the total cost of ownership — including adviser fees, custodian fees, technology, legal, and tax costs — under each scenario before deciding.

It is important to note that these are general guidance figures. Individual circumstances, family complexity, jurisdictional requirements, and specific service needs can significantly affect the cost and viability of each model. Professional advice is essential before committing to any structure.

How Global Investments Can Help

Global Investments works with ultra-high-net-worth families and individuals to design, establish, and oversee family office structures appropriate to their wealth level, complexity, and objectives. Our team brings together investment management expertise, international tax and structuring knowledge, and independent fiduciary oversight. Whether you are evaluating the economics of an SFO, selecting an MFO partner, or assembling an outsourced family office around a core team, we can provide independent analysis and introductions to the right specialists. Contact us to arrange a confidential, no-obligation discussion.

This guide is for information purposes only and does not constitute investment, tax, legal, or regulatory advice. Family office structures involve complex regulatory, legal, and financial considerations. Readers should obtain independent professional advice before establishing or engaging any family office structure. Rules and thresholds are as at June 2026 and are subject to change.