Many financially successful families eventually face the difficult choice between establishing their own single family office (SFO) and becoming a client of a multi-family office (MFO). While capabilities and cost are certainly important variables, the SFO versus MFO decision also requires a more in depth assessment an individual family’s culture, current and future lifestyle, and independent and objective fiduciary oversight.
Whereas, multi family office (MFO) is a third-party firm that provides similar wealth management type services but due to the fact they oversee the wealth for a number of clients, their attention is focused more specifically on wealth management and total AUM vs. a providing a full suite of services to support the family’s individual needs.
What is a Single Family Office (SFO)?
Single family office (SFO) is a private investment vehicle or similar entity that has been established to manage and represent the wealth on behalf of one family or individual. An SFO manages a family’s wealth in the broadest sense, by providing both strategical and tactical oversigh, in addition to support services identified to meet the family’s day-to-day needs. Comprised of full time staff responsible for a myriad of tasks including but not limited to wealth management, charitable and philanthropic projects, as well as tax and estate planning. SFOs are generally established by families or individuals with a net worth in excess of $300M, who have complex structures and portfolios that illicit the need for fulltime oversight.
The SFO is comprised of a team of full-time staff reporting directly to the Head of the Family Office and/or the Principal. SFOs are staffed solely based on the family’s particular needs and requirements, but typically include investment professionals who manage the family’s financial (including accounting and investment activities) as well as, legal affairs. Though the primary focus is on these professional services, many SFO’s will expand to also include staff specifically devoted to managing a broader range of tasks – including personal assistants, nannies, general domestic staff, estate managers and others who provide more concierge type support and will oversee assets such as real estate, yachts, aircrafts, vineyards, ranches and others.
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