How can a family measure whether its multifamily office relationship is producing sufficient value?
Set clear goals before judging results. Track investment performance against agreed benchmarks, total fees, cash flow, service response, risk controls, and family priorities. Review the scorecard at least annually with documented evidence. The relationship is producing value when it improves financial outcomes, reduces avoidable work and risk, and helps the family make better decisions.
Define the scorecard first
Start with a written list of outcomes the family expects. These may include investment management, consolidated reporting, cash management, estate coordination, education for younger family members, philanthropy, or help with operating businesses. Assign an owner and a measurable result to each item. For example, require a complete monthly balance sheet by a set date, or a documented decision process for major investments.
Keep the list short enough to review. A scorecard prevents the discussion from becoming a general opinion about whether the office feels helpful.
Measure investment results and total cost
Ask for performance over several time periods, after all manager fees and trading costs that the office controls. Compare each portfolio to a benchmark that matches its policy, risk level, liquidity needs, and asset mix. Review volatility, drawdowns, concentration, unfunded commitments, and available cash alongside return.
Then calculate the full annual cost of the relationship. Cambridge Associates identifies costs such as asset management, financial reporting, tax compliance, trustee services, recordkeeping, property management, and family retreats as items families may need to evaluate. Compare those costs with the work delivered and the results achieved. Cambridge Associates
It's not about the IRR you're promising. It's about trusting you and your team. It's about having context around whether they should be high conviction and working with you. It's about having time in the space to think how unique is this person and their strategy and their team and their value add.
Test service quality, control, and family outcomes
Track whether reports arrive on time, data reconciles, questions receive clear answers, and action items are closed. Review exceptions, cyber controls, insurance coverage, custody arrangements, and documentation of approvals. Confirm that the relationship's duties, entities served, family clients, and service scope are documented. SEC
Finally, ask family members whether they understand the plan, can find the information they need, and feel prepared for succession and major decisions. Review the scorecard at least annually, record agreed improvements, and change services that do not produce measurable value.
Related guides
- Family Governance With a Multifamily Office
- Reporting and Consolidation for Multifamily Offices
- Access to Alternatives Through an MFO: A Practical Guide for Families