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Factors to be decided while setting up a family office

A family office is a company that’s privately held and manages the investments and wealth of high-net-worth individual families.

Why Set up a family office

The reason to setting up a family office is to help transfer the generational wealth of ultra-high net worth individuals and avoid intra family disputes.

Factors for setting up a Family Office


Having the ability to control the costs, practices and policies that are affecting family offices is the most appealing aspect of creating one. Family office principals frequently have an extensive experience of managing large organizations, specific management philosophies and objectives regarding to the desired people, costs, culture, practices, and scope of their family office.

Planning exercise

Like many well-run businesses, the clearer the goals and lines of accountability are defined, that will better the outcomes. Family office management are advised to begin the process by addressing key questions designed to having a better understanding of how their families might benefit from a family office.

Personalized service

A family office can organize a family's specific need and preferences and provide a personalized service. This results in a much more significantly higher level of service quality than might be available from a wealth advisor, trust company.


The beginning of most family offices begins with hiring of accounting or legal staff, either from existing family-owned business or trusted service providers. Bill payment, tax matters, and family. The more the number of legal entities in a family office, then the greater the cost of accounting, legal and compliance, which often is not appreciated by advisors.


Based on the family office's location a direct impact upon tax exposure, regulatory requirements, privacy, proximity to family, availability of high-quality staff, professional services infrastructure, and cost. With an increasing globalization of wealthy families - residences, investments, business interests, and philanthropy - competition amongst jurisdictions is intense as countries modernize their trust, tax, civil law, regulatory, and fiduciary standards to keep up with the pace of evolving practices.


Large scale economies are often present in family offices. Dis-economies of a large scale may also be present, these are serving to increase operating costs, sometimes to an unacceptable level.


Family offices today have an increasing availability of outsources available. Many family offices have outsourced professional functions such as tax strategy, trust and estate planning, custody, and investment management. They may also maintain a small in-house accounting staff to do much of the day-to-day general ledger work, and have a tax firm prepare annual or quarter tax returns.

Cost Guidelines

one needs to know the scope, direction, and complexity of the office. Regardless of the cost, the benefits towards the family need to justify the expenditure of money. Couple of small to medium sized well-run offices produce an abundance of benefits relative to the cost. There are also large, organizations that have failed to meet the expectations of the family. The most important thing at the end of the day is value and benefit must be defined by the family.