The 5-Minute Guide to Multi-Family Offices

NEWSLETTER

Family office insights this week:

• Everything you need to know about Multi-Family Offices

• The most devastating cyber attack in history

• Elon Musk: a whole new level of influence

• Podcasts: family office tech, data and trends

• When inheritance saps motivation

The 5-Minute Guide to Multi-Family Offices

It’s time we talked about Multi-Family Offices (MFOs).

Single Family Offices (SFOs) are soaring in popularity, but they’re not right for everyone.

SFOs offer bespoke services and unparalleled personalization. But for many families, SFOs come with challenges: staffing, administration, compliance and - most fundamentally - cost.

Variously estimated at 1-2% of AUM, the cost of a SFO can be prohibitive. So wealthy families who still want access to family office services often opt to join multi-family offices.  

Commercial vs. Closed Multi-Family Offices

MFOs generally fall into two categories:

1. Commercial MFOs: These are profit-driven organizations that serve a broad range of families. Some are privately owned; others are divisions of financial institutions.

2. Closed MFOs: These offices are usually born from single-family offices that opted to bring in additional families. They cater to a limited group of like-minded families, leveraging shared values and goals.

Understanding these structures is key. Commercial MFOs can offer a wealth of resources, but they may come with hidden conflicts of interest if tied to financial institutions. Closed MFOs, while limited in scope, often provide a more exclusive and tailored service experience.

What to Look for in a Multi-Family Office

Independence and Objectivity 🧩
Ideally, an MFO should act as an independent advisor, free from conflicts of interest and with no pressure to promote in-house products. Look for offices that offer clear, transparent pricing and do not accept commissions from third parties.

Comprehensive Reporting 📈
Consistent and granular reporting is crucial. The best MFOs provide in-depth insights on asset allocation, investment performance, and risk exposure. This transparency helps you stay informed and in control of your family’s wealth.

Alignment of Interests 🤝
Your MFO should align with your family’s specific needs, values, and long-term goals. Look for MFOs that focus on alignment rather than those pushing products. Ask about their approach to integrating external experts and if they provide flexibility in selecting asset managers or investment options.

Defining Your Needs: Building a Solid Foundation

Before starting your search, you need to know what you are searching for. So first look inwards and assess:

• Asset Consolidation: Start with a holistic view of your wealth. Often more complex than it may first appear.

• Risk Management: Assess your existing geopolitical, legal, and diversification risks.

• Family Governance: What are the policies, structures and processes that guide decision-making and ensure transparency. Understand how you want to educate and involve future generations. 

Some families transition from private banking to MFOs to avoid conflicts of interest, improve cost transparency, and access services such as estate planning and philanthropic advice.

The more you know about your objectives, the better equipped you’ll be to evaluate whether MFOs align with your goals.

Common Pitfalls to Avoid, Essential Questions to Ask and more…

Read the full guide here.

𝕏 highlights

Typical size and cost of family offices.

Trends in real estate investing in family offices (there’s more on real estate next week).

When inheritance can sap motivation.

 💼 where to work

Four new family office jobs and five candidates open to work in our latest Family Office Jobs newsletter that went out this Wednesday.

View it here.

📚 what to read

The more you read about cybersecurity, the less safe you feel. Sandworm by Andy Greenberg explores the most devastating cyber attack in history and tells the story of how the criminals behind the attack were identified. It’s both thrilling and terrifying. While the Sandworm attack targeted strategic infrastructure, it’s a reminder that everyone is vulnerable - something family offices are increasingly aware of.

📻 what to listen to

The Risclarity WealthTech Podcast dives into family office tech, data and trends. 7 episodes in and it’s been a very strong start.

📺 what to watch

‘President’ Elon Musk – what to make of the billionaire’s new political power? Wealthy people have always been close to power, but Elon Musk’s influence is on another level.

And finally…

Next week it’s a look at real estate succession challenges for family offices.

The January family office jobs newsletter on Wednesday was super popular. It seems a lot of people are interested in becoming a family office CFO in San Diego!

If you see interesting articles or content on family offices, let me know. This will slot nicely into the Family Office Buzz newsletter.

The Buzz will be back on Monday (here’s the last edition if you missed it) with more of the best content on family offices and beyond.

Until next week, see you on 𝕏 or LinkedIn.

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