3 Paths to Creating a Family Office
Families can share a platform, build an in-house team, or coordinate a lean network of specialists. The right path depends on your assets, complexity, control needs, and service requirements.
The 3 paths side by side
Use or create a multifamily office
- Typical cost
- Usually an annual fee, a percentage of assets, a fixed retainer, or a combination. Pricing varies by services and complexity.
- Assets usually needed
- Often suitable for families that want family office services without funding a full internal team. Minimums vary by provider.
- Staffing
- Shared professionals across several families, with specialists for investments, tax coordination, estate work, reporting, and administration.
- Timeline to launch
- Depends on provider selection, scope, onboarding, and data requirements.
- Fits families that
- Want experienced infrastructure, broad expertise, and lower internal overhead.
- Pros
- Shared costs, access to specialists, established systems, and broader staffing coverage.
- Cons
- Less control over priorities, shared resources, potential conflicts, and provider-dependent service quality.
Create your own single family office
- Typical cost
- Often the highest-cost path because the family funds dedicated employees, technology, governance, office operations, and outside advisers.
- Assets usually needed
- Usually makes more sense for substantial wealth and complex affairs that justify dedicated personnel. There is no universal asset threshold.
- Staffing
- Dedicated employees may include a chief investment officer, controller, operations lead, and family governance or administrative staff. Outside advisers often remain part of the model.
- Timeline to launch
- Depends on hiring, entity design, technology, governance, and reporting requirements.
- Fits families that
- Need maximum control, privacy, customization, and long-term continuity.
- Pros
- Direct control, dedicated attention, custom policies, and the ability to build a lasting family culture.
- Cons
- High fixed costs, hiring risk, management responsibility, key-person dependence, and more operational complexity.
Create a virtual family office
- Typical cost
- Usually lower fixed overhead than a staffed office because many functions are outsourced or coordinated through technology and specialist advisers.
- Assets usually needed
- Can work across a range of wealth levels when the family has focused needs and does not require a large internal team.
- Staffing
- A small internal team, sometimes one or two employees, supported by accountants, attorneys, investment professionals, insurance advisers, and other specialists.
- Timeline to launch
- Depends on scope, provider selection, data cleanup, and governance setup.
- Fits families that
- Want coordination and control while keeping overhead flexible.
- Pros
- Lower fixed costs, flexible specialists, remote operations, and the ability to scale services as needs change.
- Cons
- More coordination work, fragmented accountability, dependence on outside providers, and less built-in institutional memory.
Which path fits: a yes or no flowchart
- Question 1
Do you need a dedicated team and maximum control over daily decisions?
- Question 2
Do your assets, entities, and family needs justify several full-time professionals?
- Result
Single family office
Build a dedicated internal office with outside advisers where needed.
- Result
Multifamily office
Join a provider that serves multiple families and supplies shared infrastructure.
- Result
Virtual family office
Coordinate a lean internal function with outsourced specialists and technology.
Start with the work your family actually needs
Start with the work. List investment oversight, bill payment, tax coordination, estate administration, insurance, risk management, philanthropy, reporting, and family governance. Record who performs each task today, where information sits, and which deadlines are regularly missed. Then decide which functions belong inside the family office and which should remain with outside specialists. A useful design separates decision rights from execution. The family may set policy, while a controller handles reporting and an attorney handles legal work. Clear ownership prevents duplicated effort and gaps. Put retained decisions, delegated decisions, committee approvals, and staff authority into a written delegation matrix.
The multifamily office path
Families take this path in two ways. Most join an established multifamily office as a client. Some founders, often after a liquidity event, create a multifamily office that serves their own family alongside others; the multifamily office guides in this hub cover that route. A multifamily office spreads infrastructure across several families. That can provide experienced professionals, established processes, reporting tools, and a broader bench without requiring you to recruit every role. The tradeoff is shared attention. Before engaging a provider, review the service model, fee structure, reporting cadence, investment process, data security, staff turnover, and conflict policies. Ask which decisions remain with your family, how requests are prioritized, and how the provider handles work outside its standard scope. A strong relationship depends on clear communication and written expectations.
So you need to customize everything to who you are and your values and your objectives and your goals. We don't have time to go into great detail on that, but a lot of families don't do that and they think they either need to control everything or outsource everything and it's usually a balance of the two, custom to who you are.
The single family office path
A single family office gives the family a dedicated operating platform. The office may coordinate investments, entities, cash, reporting, governance, philanthropy, and administration. It requires an operating plan, documented authority, reliable systems, and a realistic hiring plan. Begin with the roles that remove the greatest recurring burden. A chief operating or financial lead can establish controls before the office adds specialized positions. Outside legal, tax, accounting, custody, insurance, and investment advisers often remain part of the model. Dedicated staff does not eliminate the need for independent expertise. Culture matters as much as structure.
The virtual family office path
A virtual family office keeps the internal team small and coordinates outside professionals through a clear operating rhythm. It can suit a family with specialized needs that do not justify several full-time employees. Appoint one person or system to own deadlines, documents, provider communication, and follow-through. Use a shared document structure, a current entity map, a cash calendar, and regular reporting meetings. Technology helps, but it does not replace accountability. Define who can approve payments, access sensitive records, change investment instructions, and speak for the family. Review the model periodically because outsourced relationships can become fragmented when no one owns the whole picture.
One trend that is growing right now is that of creating a virtual family office. This is essentially a very leanly operated single-family office where the family typically would employ a multi-family office for their diversified investment portion of their portfolio.
A practical decision rule
Choose the model that matches recurring workload, control needs, and management capacity. If you want established specialists and shared infrastructure, consider a multifamily office. If you need dedicated control, privacy, and a permanent team, consider a single family office. If you want flexible coordination with lower fixed overhead, consider a virtual family office. Do not use an asset number as the only test. Complexity, family involvement, geographic spread, entity count, privacy requirements, and the volume of decisions matter. Write the decision in a short operating brief. State the work to be covered, the authority to be retained, the expected response times, and the first-year implementation priorities.
Moving between paths over time
The three paths are operating choices that can change over time. A family may begin with a virtual structure, add an internal controller, and later build a single family office. Another family may move from an internal office to a multifamily provider when hiring becomes difficult or the family wants broader specialist coverage. A staged approach can reduce disruption. First document processes and data. Then identify the functions that require more control or deeper expertise. Bring those functions in-house only when the workload is steady and a qualified person can be supported. Keep independent advisers where they add value. Reassess after major liquidity events, acquisitions, succession changes, geographic moves, or changes in family participation. Treat the family office as an ongoing process that requires continued adjustment.
The only downside to creating a family office, a single family office is some people think we want maximum control, we want to control everything. And I think that's a big mistake.
Governance, reporting, and service standards
Operating design should make decisions visible. Establish a family council or equivalent forum, written investment and spending policies, approval limits, meeting schedules, and a record of decisions. Reporting should answer practical questions: what was approved, what changed, what is due, and who owns the next action. Separate performance reporting from cash and administrative reporting so issues do not hide inside one document. Protect personal and financial data with access controls, secure communication, backups, and a response plan for incidents. Providers should explain their conflicts, compensation, subcontractors, and escalation process in plain language. Your family should know when a matter requires legal, tax, or investment advice from a qualified professional.
What Richard C. Wilson has seen across 250+ family offices
Richard C. Wilson founded the Family Office Club in 2007. He has helped create, formalize and run 250+ family offices, and he helps run two single family offices today. He also wrote the first books on single family offices and on how to start a family office.
The pattern across that work is consistent. Families that launch well design around the work they must do well every month, choose the lightest structure that handles it, and revisit the choice as wealth, family size, and complexity change. Families can choose among virtual, multifamily, and single family structures as control, privacy, workload, specialist capacity, and governance needs change.
The number one strategic priority in this first phase of setting up a single family office should be creating the strongest brain trust possible for the family.
A disciplined first 90 days
Use the first period to create facts. Inventory entities, accounts, advisers, insurance, documents, recurring payments, and reporting obligations. Interview family members about priorities and privacy concerns. Build a responsibility matrix that names one owner for every recurring task. Compare operating models against the same criteria: cost, control, service breadth, privacy, technology, conflicts, staffing, and continuity. Select a limited first scope, then test reporting and communication before expanding. Keep a written record of assumptions and unresolved questions. The goal is a functioning cadence that the family can understand and maintain.
Creating a governance process and system that works specifically for your family is what is most important, and that includes considerations of time requirements, costs, buy-in from multiple generations, and practical implementation that matches the current state of your single family office.
Videos
How to Start a Family Office Mini-Series
The First Step in Setting Up Your Virtual Family Office at No Cost
Creating a Single Family Office
Family Office Service Providers & Partners - What to Know
FAQs
Is there a required net worth to create a family office?
No universal threshold applies. The useful test is whether your complexity, workload, privacy needs, and control requirements justify the operating model.
Can a virtual family office become a single family office?
Yes. Families can begin with a small internal team and outsourced specialists, then bring selected functions in-house as workload and complexity grow.
Does a multifamily office control my investments?
That depends on the engagement. Some provide advice and coordination, while others provide discretionary management or broader investment services. Read the agreement carefully.
How should we compare providers?
Compare scope, fees, conflicts, reporting, technology, privacy controls, investment process, response times, provider turnover, and which decisions remain with your family.
Sources
- Family Office Exchange, Family Office Resources Family office structures, governance, talent, and outsourced services should be designed around each family's needs.