Establishing a family office is one of the most significant steps a family can take to institutionalise wealth management, governance, and legacy. It demands more than administrative setup, it requires strategic clarity, disciplined governance, and jurisdictional precision.
Typically, a family office evolves as part of a broader wealth strategy. Early-stage structures, companies, trusts or foundations, often hold local assets and are directly managed by the family or the wealth creator. As complexity increases across jurisdictions, professional fiduciary providers are engaged, and governance frameworks begin to emerge.
The following five phases outline the strategic roadmap for implementing a family office. It is not intended to be sequential but rather a methodology to guide the thought processes required.
Phase 1: Foundation and Strategic Definition (Months 1 – 3)
This opening phase focuses on introspection and alignment, defining the family’s purpose, values, and risk framework. Without this foundation, decision-making becomes reactive and short-term.
Step 1: Define the Family’s Purpose and Vision
Action:Facilitate structured discussions among family members to define shared values and long-term objectives within a risk management framework.
Key questions:
- What is our family’s legacy and purpose?
- What values bind us?
- What are our intergenerational goals: preservation, growth, philanthropy, or entrepreneurship?
- What risks threaten these objectives?
Outcome:A formal Family Purpose Statement that is the cornerstone of all governance and investment decisions.
Step 2: Identify the Scope of Services
Action: Determine which functions the family will perform internally and which to outsource, balancing strategic oversight and operational efficiency.
Typical outsourced services:Governance, investment management, accounting, estate and tax planning, risk and succession management, philanthropy, and education.
Output:A clearly defined service mandate that determines the type of family office required, staffing needs, and capital allocation.
Phase 2 – Governance Design (Months 4 – 6)
Governance builds the framework for accountability, alignment, and communication: the bedrock of family cohesion and institutional control.
Step 3: Establish Family Governance
Action:Define how the family will operate, make decisions, and resolve disputes in pursuit of its shared purpose.
Core components:
- Strategic intent: purpose and values
- Family Council: forum for dialogue, education, and philanthropy
- Decision processes: voting, succession, conflict resolution
- Roles and responsibilities: participation and authority flow
- Risk framework and management
- Communication processes
Outcome:A Family Constitution or Charter formalising purpose, governance rules, and dispute protocols.
Step 4: Design the corporate governance framework
Action:Define the operational command structure and align it with the family’s governance framework.
Key structures:
- Trustees, Council or Board: family and independent professionals for balanced oversight
- Investment Committee: strategy, monitoring, and performance accountability
- Reporting lines: clear accountability between executives, board, and family council
Core documents:Trust deeds, articles of association, shareholders’ agreements, and communication protocols.
Integration principle:Governance should bridge values and professionalism, emotional alignment with institutional discipline.
Phase 3 – Structural and Jurisdictional Analysis (Months 7 – 9)
Once governance and strategy are clear, the focus turns to structure and jurisdiction, defining what and where.
Step 5: Select the Type of Family Office
Action:Evaluate models: Single Family Office (SFO), Multi-Family Office (MFO), embedded family office, or virtual family office.
Assessment criteria:
- Control and decision-making influence
- Cost efficiency and sustainability
- Privacy and data protection
- Availability of skilled professionals
- Capacity for growth
- Cultural fit
Step 6: Determine the Legal Entity Type
Action:Select the most efficient legal vehicle balancing control, culture, and cost.
Options include:
- Private Limited Company: clear governance, liability protection
- Company Limited by Guarantee: non-profit, ideal as holding entity
- Trust or Foundation: succession continuity and asset protection
- Protected Cell Company (PCC): risk segregation for multiple portfolios
Step 7: Choose the Jurisdiction
Action:Conduct comparative jurisdictional analysis considering regulation, taxation, reputation, and geopolitical stability.
Key criteria:
- Legal framework: stability and robustness
- Talent pool: advisory, fiduciary, investment, and legal expertise
- Infrastructure: banking, IT, and communications quality
- Proximity: alignment with family geography and time zones
- Tax regime: income, capital gains, inheritance exposure
Leading jurisdictions:Isle of Man, Jersey, Malta, and Guernsey, each balancing privacy, cost, and oversight differently.
Phase 4 – Implementation and Launch (Months 10 – 12)
This phase operationalises strategy and governance, transforming frameworks into a functioning enterprise.
Step 8: Develop a Business Plan and Budget
Action:Draft a detailed plan outlining strategy, cost structure, and performance metrics to ensure long-term sustainability.
Step 9: Recruit Leadership and Staff
Action:Appoint senior executives, typically a CEO, CIO, and CFO, aligned with the family’s culture and professional ethos.
Step 10: Select Technology and Service Providers
Action:Implement infrastructure for accounting, reporting, communication, and risk management. Conduct due diligence on advisors (legal, audit, custodians, investment consultants).
Step 11: Transition Assets and Operations
Action:Gradually migrate investment management and administration into the new structure, maintaining compliance and minimising disruption.
Phase 5 – Ongoing Review and Adaption (Continuous)
A family office is not static, it must evolve as family dynamics, markets, and regulation change.
Step 12: Governance Review
Action:Conduct annual reviews of the family constitution, governance structures, and operational efficiency.
Focus:Mission alignment, intergenerational engagement, and resilience.
Forward view:Treat governance as a continuous discipline, a living framework, not a static document.
Legal Review
Action:Conduct biennial legal and tax reviews across jurisdictions.
Focus:Compliance, structural efficiency, and relevance of entity type.
Forward view:Proactive monitoring of legal and regulatory changes reduces exposure and enhances agility.
Investment Review
Action:Review investment strategy and performance annually.
Focus: Returns versus expectations, macroeconomic factors, and risk register accuracy.
Forward view:Assess whether investments continue to support the family’s objectives and financial sustainability.
This blueprint offers a structured framework for establishing a family office: aligning purpose, governance, and jurisdictional architecture. Successful implementation requires coordinated expertise across legal, tax, regulatory, and fiduciary domains. Engaging experienced advisors ensures compliance, optimised structuring, and resilience through transition.
Boston Multi Family Office is ideally positioned to assist families that wish to set up their own family office. We are a multi-jurisdictional fiduciary service provider with offices in the Isle of Man, Jersey, Malta and the UK that implement tailored governance solutions to clients. We embrace change, thrive in chaos and know different.
Should you wish you to discuss the topic in more detail or interested to hear how Boston Multi Family Office can assist you, please contact Roelf Odendaal rodendaal@bostonmfo.com