Basics
Your own family office: advantages and disadvantages
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
A single family office of your own offers control, confidentiality and an organisation that serves only one family's interests. Against this stand high fixed costs, dependence on a few key people, effort for governance and compliance, and the difficulty of attracting good professionals. Whether the step is worthwhile depends less on wealth alone than on complexity, the family's goals and its willingness to lead.
Advantages
- Alignment: the team works exclusively for the family, without product interests.
- Control: the family decides on strategy, service providers and priorities itself.
- Confidentiality: information stays within a small, trusted circle.
- Overall view: wealth, structures, taxes and succession are considered together.
- Continuity: knowledge about the family is preserved across generations.
Disadvantages
- Fixed costs for staff, premises, systems and insurance – regardless of market conditions.
- Key-person risk: if the head is unavailable, knowledge is often missing.
- Recruitment: experienced professionals are in demand and expect attractive terms.
- Governance: a family office of its own needs clear rules on who decides and who controls.
- Regulation: depending on the activity, licensing or due diligence obligations arise.
The real question
The frequently asked question about a minimum level of wealth falls short. Wealth held in a single bank portfolio requires little organisation; the same wealth spread across a business, real estate in three countries, a foundation and private market investments requires a great deal. What matters is complexity, the number of family members and generations, the wish for control and the willingness to lead a team.
Questions to help decide
- Record the family's goals: preserving wealth, succession, philanthropy, entrepreneurship.
- Capture the complexity: structures, countries, asset classes, people involved.
- Establish today's total cost of all service providers.
- Compare the alternatives: multi family office, virtual family office, an in-house team.
- Start with a lean core and expand step by step.
Hybrid forms are the rule
Hardly any family office does everything itself. Typical is an in-house core for steering, reporting and coordination, supplemented by external asset managers, tax advisers and fiduciaries. The decision is therefore usually not "our own family office, yes or no", but "which tasks do we keep in our own hands".
A useful way to frame it is by function rather than by organisation: oversight of the whole picture, consolidated reporting and control of service providers tend to stay in-house, because they require trust and independence; specialised execution tends to be bought in, because it benefits from scale.
In FLIORE
FLIORE is built for lean teams: mandates, consolidated wealth, documents, compliance and reporting in one platform. This makes it possible to run a family office of your own with few people, without knowledge being scattered across spreadsheets and emails.
At a glance
| Main advantage | Exclusive alignment with the family |
|---|---|
| Main disadvantage | Fixed costs and key-person risk |
| Decisive | Complexity and family goals, not just the level of wealth |
Terms on this page
- Multi family office
- A service provider that looks after the wealth and affairs of several unrelated families.
- Consolidated wealth
- The overall view of a family's wealth across all banks, structures and currencies in one reporting currency.
- Virtual family office
- A family office with a small core that coordinates and oversees external specialists such as portfolio managers, tax advisers and trustees.
Frequently asked questions
How much does a family office of your own cost?
That depends on team size, location and scope. Staff costs usually make up most of the total. Reliable, publicly available market figures for German-speaking Europe are rare; a cost plan of your own is indispensable.
Can one start small?
Yes, and that is often a good route: one trusted person with good technology and external partners. The organisation is expanded when the tasks require it.
Does a single family office need a licence?
That depends on the country and the activity. In Switzerland, Germany and Austria, managing only the family's own wealth is often not subject to a licence, but exceptions are possible.
What happens if the family falls out?
Then it becomes clear how good the governance is. Clear rules on decisions, information rights and exit in a family constitution help to keep the family office able to act.
Sources
- FINMA – licensing requirement for asset managers
- BaFin – authorisation requirements under the KWG and WpIG
- FMA Austria – licensing requirements
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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