How to choose a multifamily office

Choosing a multifamily office starts with understanding the work a family needs and how a provider will carry it out. This page explains how to compare services, fees, responsibilities and working arrangements for an informed evaluation.

Define the work the family needs

A multifamily office provides financial and administrative services to multiple families. A single family office supports one family. A virtual arrangement coordinates outside providers, while a hybrid arrangement combines internal staff with external support.

Begin with a written description of the family's needs. Investment management may be one part of the work. Other needs can include tax coordination, estate planning, insurance, philanthropy, bill payment and education for younger family members. Family Office Club research on service categories provides a starting point for that discussion.

Separate services already handled by trusted advisers from work that needs a new provider. Then identify who will coordinate the people involved. This helps distinguish an investment relationship from a broader service arrangement and makes proposals easier to compare.

Compare fit, service scope and working relationships

Family Office Club research emphasizes fit and customization, alongside value. Assets under management alone do not explain whether a provider can handle a family's circumstances or communicate in a useful way.

A practical comparison examines the people who will do the work. Ask who manages the relationship, who handles specialist questions and how responsibilities change when someone leaves. Discuss how the office works with existing accountants, attorneys and other advisers.

• Which services are included in the proposed engagement?
• Which tasks go to outside providers, and who supervises them?
• How are decisions documented and disagreements addressed?
• How does support change as family circumstances change?

Use the same description of needs with each candidate. A conversation built around actual tasks can reveal differences that broad service lists leave unclear.

Understand fees and what they cover

Richard Wilson of Family Office Club says charges vary with the services provided. He notes that concierge, philanthropic, legal and fund work may carry extra charges. A quoted fee therefore needs a written explanation of its scope.

Fee structures can include a flat fee, a retainer, charges linked to assets under management or performance fees. Each structure needs its own explanation. For an asset-based charge, clarify which assets count. For a performance fee, clarify how performance is measured and when the fee becomes payable.

Element Pointe is an example in Family Office Club research. Its approach uses a scope review to establish a flat fee alongside a tiered schedule. That example illustrates why a fee label alone does not describe the full arrangement.

A useful comparison records the proposed office fee, outside provider costs and separately billed work. It also explains how charges change if assets move, services expand or the relationship ends. Where pricing is unpublished, Family Office Club research says to ask.

Clarify duties, conflicts and investment capabilities

The term multifamily office does not establish the duties that apply to every service. Family Office Club research notes that engagement terms can disclaim fiduciary duty. Written agreements should explain the capacity in which the provider acts and the responsibilities attached to that role.

Ask how the office is paid when it recommends investments or other services. Product sales and commissions, along with relationships with outside providers, can create conflicts. Disclosure helps families understand the incentives involved, but it does not remove those incentives.

Investment capabilities also need careful definition. Richard Wilson says most multifamily offices offer limited support for direct deals. A family seeking that work can ask what research, transaction support and ongoing monitoring the proposed engagement includes.

Sample reports and explanations of the investment process can help connect a provider's stated approach with the work it actually proposes to perform.

Examine reporting, data access and the exit process

Reporting is part of the working relationship. Review whether sample reports make holdings, costs, cash needs and outstanding tasks understandable. Establish who receives information and how access differs among family members and advisers.

Family Office Club research identifies data access and privacy, along with security, as selection topics. Discussion can cover access controls, document sharing, incident communication and the handling of records held by outside providers.

Before engagement, clarify how records can be exported and transferred when the relationship ends. An ongoing review can revisit costs and coordination, as well as service gaps, as circumstances change. Clear responsibilities and accessible records make that review easier.

FAQs

Is there a universal asset minimum for using a multifamily office?

No universal threshold follows from Family Office Club research. Erulin says there is no fixed minimum for a family office. Individual providers may set their own client minimums.

Does a larger office necessarily offer a closer fit?

Size alone does not establish fit. Family Office Club research focuses on customization and value. Service scope, staff responsibilities and communication provide further points of comparison.

Can a family keep its existing advisers?

That depends on the engagement. The discussion should establish which advisers remain involved, how information is shared and who coordinates their work.

Sources

• Family Office Club research database
• Family Office Club research database
• Family Office Club research database
• Family Office Club research database
• Family Office Club research database
• Family Office Club research database
• Family Office Club research database
• Family Office Club research database

Related: all guides, the directory, calculators. For events and peer access, see FamilyOffices.com.