A family office is an organization that manages and coordinates the financial affairs of a wealthy family. Beyond investing, it typically handles tax planning, estate and trust administration, the family's business entities, philanthropy, bill paying and reporting, and preparing the next generation. Some families build their own dedicated office with its own staff. Many more use a multi-family office or an advisory firm that provides a similar coordinated service to several families.
Why do family offices exist?
Wealth gets complicated faster than it gets large. A family that has sold a business, holds real estate, owns pieces of private companies, has trusts for children and gives to several causes may have a dozen professionals: an investment manager, a CPA, an estate attorney, a trust company, an insurance agent, a bookkeeper. Each is competent in their lane. None of them is responsible for how the lanes fit together.
A family office exists to own that responsibility. Its value is less in any single service than in the fact that someone sees the whole picture and keeps it current.
The point is not a bigger team. It is one team that answers for the whole picture.
What does a family office typically handle?
Investments
An overall investment policy across every account, entity and trust, with managers chosen and monitored against it, including private investments that never appear on a brokerage statement.
Tax planning
Multi-year projections across all family members and entities, coordinated with the investment decisions, and compliance work either done in-house or overseen.
Estate and trust coordination
Working with attorneys on wills, trusts and gifting, making sure accounts are titled to match, and carrying out the plan when the time comes.
Entities and business interests
Holding companies, partnerships, operating businesses and real estate entities, with their own books, returns and governance.
Philanthropy
Foundations, donor-advised funds and the strategy behind them, often with the family's values and the next generation in mind.
Reporting and administration
One consolidated report of what the family owns, bill paying, cash management, insurance reviews and record keeping.
The next generation
Financial education, family meetings and preparing heirs for what they will one day be responsible for.
Dedicated family office or multi-family office?
A dedicated family office serves one family. It offers complete control and privacy, but the family carries the full cost of staff, systems and oversight, so it tends to be practical only for very large fortunes. The family also becomes an employer, with all that implies.
A multi-family office, or an advisory firm working in a family office style, serves several families with a shared team. The family gets coordinated service without building an organization. The trade-off is less customization and a team whose attention is shared.
Many families are somewhere in between: they do not need a full office, but they have outgrown a set of separate advisors who never talk to each other.
How are family offices paid, and why does it matter?
This is the question that matters most. Some offices charge a flat or asset-based fee and earn nothing else. Others also earn commissions, revenue sharing or fees on products they place, which means some recommendations can pay them more than others. Any family evaluating a family office or multi-family office can ask how every person on the team is paid, and whether any part of that pay depends on what is recommended. The answer should be clear and in writing.
Two other questions help: Is the firm a fiduciary on everything it does, or only on some accounts? And who, by name, is responsible for coordinating the whole picture?
How do you know if your family needs this kind of coordination?
- No one person can tell you, today, everything your family owns and how it is titled.
- Your CPA learns about investment decisions when the tax forms arrive.
- Your estate plan was signed years ago, and nobody has checked whether accounts still match it.
- Your children will inherit responsibility for assets they have never been told about.
- Each professional you work with is good, and none of them is responsible for the whole.
None of these require a family office by name. They require coordination by someone who is paid to provide it.
A hypothetical example
Hypothetical. A Utah family sold its operating business several years ago. The proceeds sit across three brokerage firms, two trusts and a real estate partnership, with a family foundation on the side. The parents' CPA, estate attorney and investment advisors each do their part well, but the parents are the only ones who connect them. They consider building a small office of their own, and compare it with hiring a single advisory firm to coordinate the professionals they already have. The second option costs less and keeps their existing relationships. The first gives more control. Either way, the change they are really making is giving one party responsibility for the whole.
Cannon Capital is a fee-only fiduciary: all of our compensation comes from client fees, and none from commissions or product sales. Our wealth management page explains how we build portfolios around a family's plan and coordinate with the attorneys and accountants they already trust.
Educational only. Not investment, tax, or legal advice. Every situation is different; the right answer depends on the numbers, and that's what the strategy session is for. Investing involves risk, including possible loss of principal.