Wealth Management Explained
What Is a Family Office? Services, Structures, and Whether You Need One
A family office is a private wealth management structure dedicated exclusively to serving the financial, tax, estate, and lifestyle needs of one family or a select group of families. This guide explains how they work, what they cost, and what alternatives exist for families building generational wealth.
The Definition
What Exactly Does a Family Office Do?
A family office is a private organization, separate from any bank, brokerage, or advisory firm, that manages all aspects of a wealthy family's financial life under one roof. Unlike a traditional financial advisor who focuses on investment management alone, a family office coordinates investment strategy, tax planning, estate and succession planning, philanthropic giving, risk management, bill payment, and sometimes household staffing and concierge services.
According to research published by the Family Office Exchange, the first modern single-family office in the United States is widely attributed to the Rockefeller family in the 1880s. Today, the model has evolved significantly, and families at various wealth levels can access family-office-caliber coordination through different structures depending on their needs and asset base.
The core purpose of a family office is integration: ensuring that investment decisions, tax obligations, estate structures, and multi-generational goals do not operate in silos. That integration is where most families with complex wealth lose the most ground.
At a Glance
Core Functions of a Family Office
- 1 Investment Management: Portfolio oversight, asset allocation, and access to institutional and private market opportunities
- 2 Tax Planning and Compliance: Integrated tax strategy, entity structuring, and coordination with CPAs for filing
- 3 Estate and Succession Planning: Trust administration, wealth transfer strategies, and multi-generational legacy coordination
- 4 Risk and Insurance Review: Life, liability, and property coverage aligned to the family's full balance sheet
- 5 Philanthropy Coordination: Charitable giving vehicles, foundation administration, and tax-efficient donation strategies
- 6 Family Governance: Investment policy statements, family meetings, next-generation financial education, and communication frameworks
Understanding the Models
Single-Family Office vs. Multi-Family Office vs. Comprehensive RIA
There is no single family office model. The structure that makes sense depends on your asset level, complexity of financial needs, and how much direct control you want over the team serving you. Here is how the three primary models compare.
| Feature | Single-Family Office (SFO) | Multi-Family Office (MFO) | Comprehensive Independent RIA |
|---|---|---|---|
| Typical Asset Range | Generally $100M+ (varies significantly by firm) | Often $10M–$100M+ (varies by provider) | $2M–$50M+ (varies by firm) |
| Dedicated Staff | Yes, full-time employees serving one family exclusively | Shared team serving multiple families | Dedicated advisor and team, typically serving a defined client base |
| Cost Structure | High, annual operating costs often $1M–$5M+ (varies significantly) | Shared cost, typically fee-based; lower than SFO | Fee-only or AUM-based; generally most cost-efficient |
| Service Breadth | Comprehensive, investment, tax, estate, legal, lifestyle | Comprehensive to semi-comprehensive depending on provider | Comprehensive, investment, tax strategy, estate coordination, private markets |
| Fiduciary Duty | Depends on structure and registration | Varies by provider | Always fiduciary (if registered as an RIA) |
| Private Market Access | Full institutional access typical | Depends on firm size and platform | Institutional-quality access available through select independent RIAs |
| Best Fit For | Ultra-high-net-worth families with extreme complexity | High-net-worth families seeking shared infrastructure | Founders, entrepreneurs, and affluent families seeking integrated, advisor-led coordination |
Note: Asset thresholds, cost structures, and service scope vary significantly across providers. The figures above reflect general industry ranges and should not be treated as fixed requirements.
A Practical Reality Check
How Much Money Do You Need for a Family Office?
This is one of the most common questions people ask when researching family offices, and there is no single correct answer. Asset thresholds vary significantly depending on the type of structure and the specific firm.
For a single-family office (SFO), the operational complexity of running a dedicated team, including legal, accounting, investment, and administrative personnel, typically demands a large asset base to justify the cost. Industry sources commonly cite figures in the range of $100 million or more, though some estimates are higher and some structures operate below that level depending on family preferences and existing infrastructure.
For a multi-family office (MFO), minimum investment thresholds are generally lower because costs are shared across multiple families. Minimums vary by provider and may range from $5 million to $25 million or more.
The more important question may not be "how much do I need?" but rather "what level of coordination does my financial life actually require?" For many founders, business owners, and high-net-worth families navigating liquidity events, estate complexity, and multi-generational goals, a comprehensive independent RIA can deliver the same integrated advisory experience at a fraction of the cost of a dedicated family office structure.
$100M+
Typical asset range commonly cited for a single-family office (SFO). Varies significantly by structure and cost tolerance.
$5M–$25M+
Typical minimums for multi-family office (MFO) access. Varies widely by provider and service model.
$1M–$5M+
Annual operating cost often associated with a dedicated SFO team. Cost sharing through an MFO or RIA model can substantially reduce this burden.
6+
Disciplines typically coordinated under a family office model, including investments, taxes, estate, insurance, philanthropy, and governance.
Service Scope
What Services Does a Family Office Typically Include?
Family office services span far beyond investment management. The defining characteristic is coordination: each discipline informs the other, and a single team holds the complete picture of the family's financial life. Service scope varies by provider and structure.
Investment Management
Portfolio oversight across all asset classes, including access to private equity, private credit, real assets, and other private market investments available to accredited investors that are typically unavailable through retail channels. Asset allocation is customized to the family's goals, time horizon, and tax situation.
Tax Strategy and Compliance
Integrated tax planning that coordinates across income, capital gains, estate, and gift tax dimensions. This may include entity structuring, Roth conversion strategies, tax-loss harvesting, charitable giving vehicles, and coordination with outside CPAs for annual filings. Results vary by individual tax situation.
Estate and Succession Planning
Multi-generational wealth transfer strategy including revocable and irrevocable trusts, dynasty trust structures, family limited partnerships, and coordination with estate attorneys. For business-owning families, succession planning for the operating business runs in parallel with personal estate planning.
Risk Management and Insurance
A comprehensive review of all insurance coverage relative to the family's full balance sheet and liability exposure. This includes life insurance policy analysis, umbrella liability, property and casualty, and for business owners, key-man and buy-sell agreement insurance structures.
Philanthropic Planning
Charitable giving strategy through donor-advised funds (DAFs), charitable remainder trusts (CRTs), private foundations, or direct gifting programs. Coordinated with tax planning to seek to maximize the impact of giving while managing tax exposure. Individual results depend on specific tax circumstances.
Family Governance and Education
Developing investment policy statements, facilitating family meetings, and preparing the next generation for responsible wealth stewardship. This is where many families with significant wealth experience the most meaningful long-term impact, and the area most often overlooked in standard advisory relationships.
The Defiant Approach
What Defiant Capital Group Provides
- + Always-fiduciary, independent RIA, client goals drive every decision, not products or institutions
- + Integrated investment, tax strategy, estate coordination, and succession planning
- + Access to private market investments typically reserved for institutional investors
- + Founded by entrepreneurs with firsthand experience navigating liquidity events and wealth complexity
- + CFA and CFP credentials (Jonathan Dane, CFA, CFP), institutional discipline applied to individual complexity
- + Deep focus on family office tax efficiency structures for high-net-worth families in the Pittsburgh region
Family Office Coordination Without the SFO Cost
Do You Actually Need a Formal Family Office?
For the vast majority of high-net-worth and affluent families, a formal single-family office structure introduces substantial cost and complexity that may not be warranted by the financial situation. The infrastructure required to run a dedicated SFO, payroll, legal, compliance, and operational systems, demands scale that most families below $100 million in investable assets cannot efficiently support.
What most families actually need is the coordination that a family office provides, not the structure itself. A comprehensive, fiduciary independent advisory firm with the depth to address investment, tax, estate, and succession planning in a unified framework can deliver that coordination at a fraction of the cost.
At Defiant Capital Group, Jonathan Dane, CFA, CFP leads a team built specifically for this level of complexity, serving founders, entrepreneurs, business owners, and affluent families navigating the financial decisions that matter most. The firm operates as a registered investment advisor (RIA) with a fiduciary obligation to every client.
For families who are navigating a business sale or liquidity event, the coordination required across tax planning, investment deployment, estate restructuring, and cash flow management is precisely where a family-office-level advisory framework adds the most value.
Understanding Compensation
How Do Family Offices and Wealth Advisory Firms Make Money?
The compensation model shapes every recommendation. Understanding how a family office or advisory firm is paid is one of the most important questions a prospective client can ask.
Assets Under Management (AUM) Fee
A percentage of the total assets managed, typically ranging from 0.50% to 1.5% annually depending on asset size and service scope. AUM fees align the advisor's compensation with asset growth, though they can create incentives to keep assets under management rather than deploy them elsewhere.
Retainer or Flat Fee
A fixed annual or quarterly fee for a defined scope of services, regardless of asset level. This model is increasingly common among comprehensive RIAs and certain multi-family offices seeking to decouple compensation from asset size and provide full transparency on costs.
Operating Budget (SFO)
A dedicated single-family office operates like a private company, with direct payroll, benefits, technology, and overhead costs for an exclusive staff. Annual operating expenses vary significantly based on the size of the team and breadth of services, but the cost is borne entirely by one family.
Regardless of structure, always ask any advisor or family office to disclose all sources of compensation in writing. A fee-only, fiduciary RIA is compensated exclusively by client fees, with no commissions or third-party incentives that could create conflicts of interest. Note that no advisory arrangement eliminates all potential conflicts.
Frequently Asked Questions
Common Questions About Family Offices
What exactly does a family office do?
A family office coordinates all dimensions of a wealthy family's financial life in an integrated fashion: investment management, tax planning and compliance, estate and succession planning, risk management, charitable giving, and family governance. The defining characteristic is that these services are not siloed but actively managed to inform each other. For example, tax planning considerations shape investment decisions, and estate planning goals influence liquidity strategy.
How much money is typically needed for a family office?
Asset thresholds vary significantly depending on the structure. A single-family office (SFO) is generally associated with investable assets of $100 million or more, though this figure varies by source and circumstance. Multi-family offices typically serve families with $5 million to $25 million or more, with minimums set by each provider. For families seeking family-office-level coordination below those thresholds, a comprehensive independent RIA can often provide equivalent advisory depth at a meaningfully lower cost.
What is the difference between a single-family office and a multi-family office?
A single-family office (SFO) is a private organization dedicated exclusively to one family, with its own staff, infrastructure, and operations. It offers maximum customization and privacy but carries significant cost. A multi-family office (MFO) serves multiple families through a shared platform, distributing operational costs while still providing comprehensive, personalized service. MFOs typically represent a middle ground between the full cost of an SFO and the more standardized offerings of a traditional private bank or wirehouse.
What is a family office in wealth management?
In wealth management, the term "family office" refers to a private advisory structure, or a comprehensive advisory firm that provides similar services, designed to manage all aspects of an affluent family's financial life. In everyday usage, "family office services" has come to describe a holistic service model that integrates investments, tax planning, estate strategy, and financial governance, regardless of whether a formal dedicated office structure exists.
Can a family office help with a business sale or liquidity event?
Coordinating a liquidity event, such as a business sale, private equity transaction, or QSBS-eligible exit, is one of the most complex financial moments a family can navigate. It requires simultaneous coordination across tax strategy, estate planning, investment deployment, and cash flow management. Family office-level advisory is specifically designed for this kind of complexity. Proper planning before, during, and after a liquidity event may help reduce tax drag and align proceeds with long-term goals. Outcomes vary based on individual circumstances and tax situations.
Is a family office the same as a fiduciary financial advisor?
Not necessarily. A family office structure does not automatically imply a fiduciary obligation. The fiduciary standard depends on the registration status and governing agreements of the specific entity. A registered investment advisor (RIA) operates under a fiduciary duty to clients by law, meaning they are required to act in the client's best interest at all times. When evaluating any advisory structure, asking directly about fiduciary status and compensation disclosures is essential.
Continue Your Research
Related Topics for Founders and Affluent Families
The questions families ask about family offices often connect directly to specific financial planning challenges. These resources go deeper on the topics most relevant to complex financial situations.
Fine-Tuning Family Office Tax Efficiency in Pittsburgh
How entity structuring, trust strategies, and coordinated tax planning can improve after-tax outcomes for affluent families.
Estate and Tax Planning Services
Integrated estate and tax strategy designed to preserve and transfer wealth across generations with greater efficiency.
Private Market Investments
Access to institutional-quality private market opportunities — a key component of family-office-level investment management.
Defiant Capital Group
Family-Office-Level Coordination for Founders, Business Owners, and Affluent Families
You may not need a formal family office structure to get the coordinated wealth strategy one provides. Defiant Capital Group serves clients in Pittsburgh and throughout Pennsylvania with an integrated advisory approach spanning investment management, tax strategy, estate planning, succession planning, and access to private markets. Our team operates as a fiduciary on your behalf.