How Family Office Services Can Maximize Clients’ Wealth

What Is a Family Office?

A family office is a dedicated organization that exists to manage the financial affairs of a wealthy individual or family.

Unlike investment firms that gather capital from multiple investors, a family office is funded entirely by the ultra-high-net-worth individual (UHNWI) it serves. That distinction changes both the nature of its work and its priorities.

Its core role is to oversee the family’s capital and ensure it remains intact and productive across generations.

What Is the Purpose of a Family Office?

The basic goal of any family office is to help a family maintain and manage its wealth in a way that reflects its values and long-term intentions. These offices can take several forms, depending on what the family needs:

• Traditional Family Office: In this setup, the family builds its operation from the ground up.
  That often involves forming a legal entity and hiring a dedicated team to provide investment advice, handle accounting, manage day-to-day expenses, and support broader financial strategy.
• Multi-Family Office: Here, a group of families shares a single platform. The office provides them with services like investment management, wealth planning, tax coordination, and access to private opportunities.
  Pooling resources means less direct control for any one family but also lowers the overall cost of running the office.
• Outsourced Family Office: Instead of building everything in-house, some families work with an outside firm that pulls together a group of professionals—accountants, lawyers, wealth advisors, and real estate specialists—who handle different aspects of the family’s financial life.
  While often the most economical option, an outsourced family office gives the family less autonomy over operations and decision-making compared to a single family office.

Understanding the Basics

The concept of a family office rests on the idea that managing substantial wealth requires its own distinct structure. Over time, as private investments generate returns, the office reinvests those gains across new opportunities.

This long view means that family offices often operate in ways that differ from traditional advisory firms and fund managers. Below are several common questions:

How Much Money Do Clients Need to Start a Family Office?

A common starting point is around $100 million in net worth. That figure allows a family to fund the office without it becoming a financial burden.

In practice, some families wait until they reach $250 million before they commit to building a team.

What matters most isn’t just the headline figure; it’s whether income from assets can consistently support operations without tapping into principal.

How Many Family Offices Are There in the World?

Financial services and investment advisor firm Credit Suisse estimated that between 6,500 and 10,500 family offices are operating globally.

A few well-known examples include Cascade Investment, founded by Bill and Melinda Gates; Bayshore Global Management, associated with Google’s Sergey Brin; and

Declaration Partners, linked to Carlyle Group co-founder David Rubenstein.

What Is the Structure of a Family Office?

Many family offices are organized as corporations or limited liability companies, allowing them to function with a clear legal framework while offering more flexibility in how they’re run.

Staffing typically includes executives, analysts, and administrative support. Compensation structures are often tied to performance, and incentives can be structured to align the team’s interests with those of the family.

Who Needs a Family Office? 3 Factors to Consider if Clients Need a Family Office

The answer isn’t always obvious. While many advisors use net worth as the first filter, that’s just one part of the equation. The size and shape of the UHNWI’s financial life matter just as much.

Here are some of the factors clients should consider when deciding if they need a family office:

No. 1: The Size of the Family’s Wealth

The most immediate question is whether their financial position can support the costs of an office. High-net-worth individuals with at least $100 million in assets may be candidates, but a sustainable income is often a better indicator than total wealth.

Asena Advisors typically works with families who have at least $50 million in investable assets.

If they find themselves dipping into their capital to pay for asset management staff and operations, what they’ve built isn’t really a family office; it’s a business that has to generate above-market returns just to break even.

A family with less liquidity and minimal cash flow might find that a full office stretches their resources.

No. 2: The Complexity of the Family’s Life

It’s possible to have a large fortune without needing a complex operation to manage it.

For instance, a substantial portfolio comprising public equities, partnerships, and bonds may not require anything beyond a capable financial advisor.

Likewise, if a family’s wealth is concentrated in a business that its founder is still running, existing staff may already handle most financial functions.

For families that have sold their venture and are now considering multiple investment opportunities or want to launch a new family business, the day-to-day workload grows.

That’s when they should begin considering an office.

The same applies if they no longer want to be hands-on with the operational side, such as paying bills, monitoring taxes, and coordinating with accountants and attorneys.

Estate planning needs also evolve. A standard trust or will may not be sufficient to justify the establishment of a family office.

But once multiple legal entities—such as private foundations, holding companies, or multi-generational trusts—are introduced, the administrative burden requires dedicated infrastructure.

No. 3: The Priorities of the Family

Every family makes different decisions about how involved the next generation should be in financial affairs. Some use these firms as a tool to formalize participation, bringing in family members to serve on boards or committees.

Others prefer to keep investment decisions at arm’s length from heirs, maintaining tighter operational control while still putting the right structures in place for the future.

In both cases, a family office can provide a level of consistency. It creates boundaries that help manage expectations and fend off difficult conversations about who gets to do what. Peace of mind can be a strong argument for having this structure in place.

What Is Behind the Recent Rise in Family Offices?

Economists suggest that the growing gap between returns on capital and returns on labor has contributed to the accumulation of long-lasting wealth across multiple generations.

Industries where returns have become more concentrated are yielding progressively more substantial fortunes.

These events are believed to have contributed to the increased popularity of family office services in recent years.

Another reason for the prevalence of family offices is a growing realization among the ultra-rich that they can benefit from more efficient cash management at a lower cost while still achieving strong returns.

The standard path involves investing through institutional funds, which often come with hefty management fees. This is most clearly apparent in the popular “2 and 20” setup for hedge funds.

The model refers to the standard annual management fee of 2% and the baseline performance fee, which is 20% of profits made by the fund above a predetermined benchmark.

In contrast, data from multinational investment bank UBS indicated that family offices across all jurisdictions required an average operational cost of just 39.8 basis points (bps) of assets under management (AUM).

The time horizon is another factor. Private equity funds usually operate for an average of 10 years, while hedge funds have shorter lifespans of around six to seven years.

On the other hand, family offices often take a much farther view, with their advisory services sometimes even planning for third-generation or century-long wealth management.

The Process of Interfacing With Family Offices

No two offices are alike. Each is shaped by the values of the family it serves, as well as the professionals involved in running it.

Clients looking to work with one should consider more than just capital. The right partner can also offer industry insight, access to networks, and strategic collaboration.

Asena Advisors deploys an approach centered on understanding the broader picture, working with a family’s assets to shape long-term plans that reflect not only financial goals but also family governance, succession planning, and philanthropic intent.

The structure of a family office can also bring stability during the transition. Having clear protocols in place allows high-net-worth families to pass responsibility across generations without conflict or confusion.

Deal-making is another area where family offices stand out. Without a rigid mandate or formal committee, they can move more quickly and approach transactions with greater creativity.

Additionally, family offices can be natural buyers as companies continue to grow. This is especially true for a family office with a principal who has extensive domain expertise.

Another point to consider is that family offices’ investment strategy is guided by personal interests as much as financial metrics. That might mean backing a passion project or supporting ventures that align with their legacy or lifestyle.

While that can lead to some family offices passing up on attractive opportunities, it also gives them a chance to present their pitch as something adjacent to what matters to them personally.

The Challenges of Dealing With Family Offices

While the appeal of family offices is strong, there are trade-offs to consider.

Many operate with lean teams, which means fewer layers of process but also less predictability. Priorities can shift quickly, especially if the principal is personally involved in decisions.

Another consideration is leverage. In negotiation terms, the concept of BATNA (best alternative to a negotiated agreement) comes into play.

Most family offices have a high BATNA. They can afford to walk away from deals that don’t fit perfectly. This makes it important to approach discussions with a clear value proposition and the ability to adapt.

Since these firms tend to be staffed by wealth and investment management professionals who are used to calling the shots, it can also be challenging to get to a balanced agreement unless clients are coming in with strong positioning.

What Does the Future Hold for Family Offices?

The role of the family office continues to evolve. As private wealth becomes more concentrated, the infrastructure supporting it is expanding.

The private bank sector is bundling concierge services—everything from M&A advisory (guidance on and implementation of mergers and acquisitions), financing, and risk management to lifestyle support—to make its platforms more appealing.

Furthermore, it’s becoming easier to start and scale a family office. As more advisors and service providers enter the space, wealthy families have more options for customization. This creates a feedback loop: the more support available, the more attractive the model becomes.

For anyone looking to raise capital, family office services are worth a serious look. Clients need to exercise due diligence and consider them thoughtfully, as this isn’t a space where a “spray-and-pray” approach will get them far.

However, if these families are willing to tailor their pitch and valuations to align with these firms’ goals, the payoff can be significant.

Get in touch with Asena Advisors and call (818) 385-2833 today to learn more.