Wealth Manager, Multi-Family Office, or Your Own Single Family Office

Families of significant wealth face three broad choices: rely on wealth management firms and investment banks; join a multi-family office (MFO), sharing an institutional platform with other families; or build a single family office (SFO) — their own staff, their own chief investment officer, their own P&L. Each model is legitimate. The mistake is choosing on trends rather than economics and governance.

The Quantitative vs Qualitative

Start with the numbers. The most credible public benchmarking comes from large annual surveys — Campden Wealth’s family office reports and the UBS Global Family Office Report. Most of that data is European and US-centric, so allowances are needed for the Australian environment. But talent, technology and compliance cost real money everywhere.

Campden Wealth’s European Family Office Report 2024, with HSBC Global Private Banking, surveyed 101 offices: those managing less than US$500 million spend on average around 105 basis points of assets a year running themselves. Above US$1 billion, that falls to roughly 36 basis points.

The UBS Global Family Office Report 2025, drawing on 317 offices averaging US$1.1 billion, puts total operating costs at 35–44 basis points — with staff roughly two-thirds of the bill. Talent is the cost, and talent does not scale down.

Now compare what the alternatives charge. Full-service multi-family offices commonly price between 50 and 100 basis points, trending lower as assets grow. So below roughly half a billion dollars, the average family pays more to run its own office than an MFO charges for a comparable institutional platform — before counting the founder’s time, key-person risk and the cost of building a team.

Why USD$500 million?

The industry’s marketing literature typically tells families an SFO becomes viable somewhere between US$100 million and US$250 million. I think that figure needs scrutiny. A credible office — a CIO of genuine quality, investment and operations staff, reporting, tax and legal coordination, cybersecurity, insurance — carries a fixed cost of roughly US$2.5–4 million a year before a single investment fee is paid. At US$250 million, that is 100–160 basis points fee.

And that is the day one budget. Human nature says the number goes up, not down. A capable CIO will — quite reasonably — want an analyst; the analyst generates activity that needs operations support; more activity demands better reporting, then a controller, then a compliance hire, then someone to manage the people managing the people. C. Northcote Parkinson, writing in The Economist in 1955, observed that “work expands so as to fill the time available for its completion” — and that officials multiply subordinates regardless of the volume of work to be done (Parkinson’s Law).

The family office is a near-perfect breeding ground for Parkinson’s Law: staff already account for two-thirds of costs in the UBS data, and headcount, once added, is almost never removed — there is no client who can leave, and no board that must answer for the expense line. Any family modelling an SFO should treat the budget in the proposal as a floor, not a ceiling, and assume it grows faster than the assets do in the early years.

These costs support a much higher threshold. Costs only approach institutional levels — the 35–45 basis points at which an SFO competes with a well-negotiated MFO fee — somewhere between US$500 million and US$1 billion. My own view is that the crossover sits at around US$500 million. At that scale, a disciplined US$2.5–3 million budget equates to circa 50–60 basis points, parity with what a large MFO mandate would cost, and the family is buying something for it: full alignment, total confidentiality, and an institution that can outlive its founder. Below that scale, the family is paying an unnecessary premium.

Remember the opening statement: “if you have seen one family office, you have seen one family office”. A family with unusually complex operating businesses, or a genuinely lean, outsourced model, can justify a lower figure — but the premise of this article is to challenge families to start with the quantitative first and then consider other factors.

The myopia problem not priced in

Cost is the measurable “quantitative” argument. The subtler one is informational. In an earlier article, Sun Tsu and The Art of Family Office, I argued that a single-family office risks becoming myopic in its approach — lacking input from adjacent families with different experiences, industries and networks. It can create its own reinforcing feedback loop. A single family office sees the world through one family’s network. Deal flow arrives from the same geographies, the same industries, the same circle of intermediaries who know what the family likes. Industry surveys consistently find that a majority of family offices source deals primarily through peer networks — which is a strength at scale and an echo chamber below it.

There is a governance version of the same problem. A CIO employed by one principal answers to that principal. However talented, bias is a human trait. They learn what the patriarch or matriarch wants to hear, and portfolios drift toward the founder’s formative experiences — the industry that made the money, the asset class that once saved it. This is a governance failure.  Without external reference points, underperformance and concentration are not called out. The old proverb — “shirtsleeves to shirtsleeves in three generations” — is usually told as a story about irresponsible heirs; it could also be extended to illustrate a story about unchallenged investment and governance judgment.

A well-run multi-family office is likely a better solution for most in this category. Serving up to fifty families, it handles up to fifty sets of deal flow, tax problems, succession disputes and manager pitches. Its investment committee is accountable to clients who can leave. That feedback loop — the discipline of contestability — is what I described in “Sun Tzu and The Art of Family Office” as “the effective concentration of smaller forces”: multiple families, perspectives and pools of experience brought together in a coordinated way, without inheriting the bureaucracy or inertia of a large institution. It is very hard to replicate within a single family office. Families who do build SFOs should engineer some of these traits: an external, independent investment committee member, peer benchmarking, and broad co-investment networks.

Wealth managers see a “slice” — and that is fine

Wealth management firms and investment banks are critical. Families of size are right to maintain relationships with several: for execution, for research, for lending, for access to capital markets that no family office can replicate internally. The limitation is structural, not a question of competence. Each firm sees only the sliver of the family’s wealth that sits on its own platform. Its advice, however diligent, is optimised for that sliver — it cannot account for the operating business, the property, the private holdings, or what the other three banks are doing. Each institution has its own house view, yet no one is responsible for the whole.

This is exactly where the family office — whether single or multi — proves its value. Its job is aggregation: consolidating every source of family wealth into one picture of exposure, liquidity, cost and risk, and using that picture with skill and judgment to direct the specialists. The banks are instruments; someone must be the conductor. But as I argued in Beyond the Platforms: technology shows you what you own — governance determines what you do with it. Aggregation without governance is just a dashboard. A family that maintains five banking relationships, but no consolidated, governed view does not have diversification — it has five uncoordinated portfolios and no idea of its true concentration or position.

Reading the data from Australia

How should an Australian-based family adjust the numbers above? Three things:

First, the talent pool. Australia’s family office sector is young. As KPMG and The Table Club observed in Wealth in Transition (2021), the term “family office” has only recently entered the Australian financial lexicon — and much of the sector has been built in the decade since. The pool of executives who have actually run an institutional-grade family office is shallow relative to London, New York, Singapore or Hong Kong, and KPMG’s 2025 Australian Family Office Compensation Benchmark found pay rising as offices compete with funds management and private capital for the same people. Since staff are two-thirds of the cost base globally, a thinner talent market pushes the true Australian breakeven higher, not lower.

Second, the platform market. Australia has capable multi-family offices and private investment houses, but fewer at genuine institutional scale than the US or Europe. Families should conduct due diligence on an Australian MFO the way they would a fund manager: depth of investment team, independence of the investment committee, breadth of the client base that creates the feedback loop, whether the firm can aggregate and report across assets it does not manage, and — critically —the independence of the firm to give 100% unbiased advice.

Third, the structures. The survey data assumes offshore structures. The Australian environment — discretionary trusts, corporate beneficiaries, superannuation caps, franking credits, state land tax and duty surcharges — changes both the cost of administration and the after-tax arithmetic.

The basis point comparisons are illustrative; the absolute numbers need local modelling before any decision is made.

For offshore families establishing in Australia

Australia has been the recipient of migrating millionaires for several years. Australia. Through the Significant Investor Visa alone, as I have previously published, my conservative estimate would place that figure around $30 billion. It is likely north of $50 billion. For these families, the structural question in this article is even more important.

The wealth is genuinely cross-border. A typical family holds operating businesses or property in multiple jurisdictions as well as growing their Australian base. As I explored in “From SIV to Strategy”, the OECD Common Reporting Standard means transparency across jurisdictions is now the default, making coherent, well-documented structures more valuable, not less. This makes the aggregation function — one consolidated picture across jurisdictions, currencies and regulatory regimes — not a luxury but the first thing to build. No single bank in any of those cities will ever see the whole.

Australian residence changes the arithmetic.

Becoming an Australian tax resident can generally bring worldwide income and gains into the Australian tax environment. Structures that made sense offshore rarely translate unmodified. The time that matters most is before residence begins — which argues for engaging advisers and choosing an office model earlier than most families do. Foreign investment rules (FIRB approvals) add another layer that the family’s advisers must coordinate.

The myopia risk is amplified, not reduced.

First-generation offices built around a founder and a trusted lieutenant are the cultural norm for many offshore families — loyalty and discretion are prized, and deservedly so. But a new-arrival SFO in Australia sees deal flow through an even narrower aperture than usual: diaspora networks, familiar property assets, introductions from the same migration-era intermediaries. I see the legacy of this in post-SIV portfolios that remain a patchwork — direct property alongside funds chosen for visa compliance rather than strategy, fragmented reporting, and no single point of accountability. Everything said earlier about echo chambers is amplified. For most families establishing in Australia — including families whose global wealth would justify an SFO at home — the pragmatic sequence is a lean family-owned core (a family CFO or chief-of-staff who owns the aggregated picture) working alongside an MFO platform and plural banking relationships, with a full SFO considered only once the Australian footprint, the tax position and the local track record have matured.

A practical framework

Below roughly US$20 million, institutional wealth management relationships, well-chosen and honestly benchmarked, remain the efficient answer. Between US$20 million and about US$500 million, the multi-family office is, for most families, the better economic and informational proposition: institutional capability, shared cost, and the feedback loop of a firm that serves many families rather than one. Above roughly US$500 million a single family office becomes defensible on cost, and compelling on control and continuity, provided the family builds in the external challenge an SFO does not naturally generate.

At every level of wealth, keep the banking relationships plural and the aggregation singular: many counterparties, one complete picture, owned by the family.