Getting Started: Setting up a Single Family Office

The foundational steps to establishing a family office, from defining the mandate to initial capital allocation.

The Mandate

Before hiring staff or renting office space, a family must define its mandate. Is the purpose solely to preserve capital, to grow it aggressively, or to manage complex multi-generational trusts and philanthropy? According to a 2023 survey by UBS, 68% of family offices list "wealth preservation" as their primary mandate, yet many are structured for aggressive direct investing. Misalignment here guarantees friction.

Key Initial Decisions

• Buy vs. Build: Do you outsource the CIO function (OCIO) or hire internally? (Rule of thumb: < $250M AUM usually favors OCIO).
• Location: Jurisdictions like South Dakota or Delaware offer significant trust and tax advantages over California or New York. See our structuring guide.

Common Mistakes

The most common mistake is over-hiring early. A principal exits a business for $200M and immediately hires a full-time CIO, CFO, and general counsel. The fixed overhead quickly creates a drag on returns. It is far safer to start with an outsourced tech stack and fractional executives.

FAQ