What revenue-sharing arrangements should families look for in a multifamily office?
Families should ask how the office and its affiliates are paid. Review retainers, asset-based fees, performance fees, referral payments, fund-level compensation, and expense reimbursements. Ask whether any payment could influence recommendations, and require the arrangement to be disclosed clearly and reconciled against invoices and statements.
Start with the full compensation map
Ask for a written list of every payment the multifamily office may receive. Include retainers, project fees, asset-based fees, performance compensation, profits interests, and reimbursements. More than one arrangement may apply to the same relationship.
Ask whether the office, an affiliate, or an employee receives compensation from an investment manager, fund sponsor, broker, custodian, lender, insurance company, or other service provider. Ask whether those payments are retained, offset against your fees, or passed through to you. A fiduciary should avoid introductions that breach its obligations. Family Office Club
Prefer terms you can measure
A clear arrangement states who pays, how much, when payment is made, and how the payment is recorded. Ask whether compensation changes when the office recommends one fund, custodian, cash vehicle, or service provider over another. Request examples based on your expected portfolio and service needs.
Asset-based fees may rise with account values. Fixed retainers can make ongoing services easier to budget. A blended model may fit when investment management and family projects require different levels of work. Compare the fees with the office's actual responsibilities and the outside providers it uses. Family Office Club
They want you to get paid handsomely when they do very well and not just get paid a big management or acquisition fee just for tying up their money, or to get paid fees just for existing and having their money under your control.
Check the documents and the process
Review the engagement letter, fee schedule, Form ADV Part 2A, fund disclosures, and account statements. Ask how conflicts are reviewed, how disclosures are updated, and how you can end the arrangement.
Compare the agreed terms with invoices, custodial statements, and fund expense reports. Keep a record of each payment source and revisit it when the office adds an affiliate, product, or service provider. Discuss the arrangement with your legal, tax, and investment professionals before signing.
Related guides
- Family Office Due Diligence: A Practical Guide for Multifamily Offices
- Access to Alternatives Through an MFO: A Practical Guide for Families
- Cross-Border Families and Multifamily Offices: A Practical Guide