Different wealth management structures are designed to address varying levels of financial complexity and personal circumstances. Among the most commonly discussed models are family offices and traditional wealth management firms. While both are involved in helping individuals and families organize, oversee, and coordinate financial matters, they differ in structure, scope, and typical use cases.

This article explains general differences between family offices and traditional wealth management for informational and educational purposes only. It does not suggest that one structure is preferable to another. Suitability depends on individual goals, resources, and the level of complexity involved, rather than on performance outcomes.

Understanding how these models are commonly structured may help individuals have more informed conversations with qualified financial, tax, and legal professionals.

What Is a Family Office?

A family office is a private organization established to manage the financial and administrative affairs of a single family or, in some cases, multiple families. Family offices are typically associated with families that have substantial wealth and complex, multi-generational considerations.

Single-Family Offices

A single-family office (SFO) serves one family exclusively. It is often structured as a dedicated entity employing professionals or coordinating external specialists to address the family’s financial and administrative needs.

Common characteristics include:

• Customized reporting and oversight
• Coordination across multiple professional advisors
• Long-term planning across generations

Multi-Family Offices

A multi-family office (MFO) provides similar services to multiple families under a shared structure. While still tailored, services are typically standardized to some degree to accommodate more than one family.

Typical Services Offered

Services commonly coordinated or overseen by family offices may include:

• Investment oversight and monitoring
• Coordination of estate planning with external legal professionals
• Coordination of tax planning with external tax advisors
• Cash-flow management and bill payment
• Philanthropic planning coordination
• Family governance and education support
• Consolidated financial reporting

The specific services provided vary widely depending on the family office structure and the needs of the family.

Typical Client Profile

Family offices are most commonly associated with ultra-high-net-worth families, often those with:

• Significant investable assets
• Multiple entities, trusts, or operating businesses
• Multi-generational planning needs

Not all high-net-worth individuals use or require a family office structure.

What Is Traditional Wealth Management?

Traditional wealth management generally refers to financial advisory services offered through banks, registered investment advisers (RIAs), brokerage firms, or financial planning practices. These services are widely accessible and structured to serve individuals across a broad range of asset levels.

Core Services Commonly Offered

Traditional wealth management services often include:

• Investment advisory and portfolio management
• Financial planning
• Retirement planning
• Risk management and insurance coordination
• Education planning
• Estate planning coordination with outside attorneys

The scope of services varies by firm, advisor credentials, and client needs.

Access and Delivery Models

Traditional wealth management services may be accessed through:

• National or regional banks
• Independent RIAs
• Brokerage firms
• Financial planning practices

Service models may include ongoing advisory relationships, planning-only engagements, or a combination of both.

High-Level Structural Differences

The following comparisons are illustrative only. Costs, services, and structures vary by firm and by individual engagement.

Minimum Asset Levels

• Family offices typically serve families with substantial asset levels, often well into the tens or hundreds of millions, though thresholds vary.
• Traditional wealth management services are available across a wide range of asset levels, depending on the firm and service model.

Cost Structures

• Family offices may operate on:
  • Fixed annual budgets
  • Retainer-based arrangements
  • Cost-sharing models (for multi-family offices)
• Traditional wealth management firms may use:
  • Assets-under-management (AUM) fees
  • Flat or retainer fees
  • Hourly or project-based planning fees

Fee structures depend on the firm and the services provided.

Scope of Services

• Family offices often focus on coordination and oversight across many financial and administrative areas.
• Traditional wealth management firms typically focus on investment advisory and financial planning, with coordination of outside professionals as needed.

Governance and Reporting Complexity

• Family offices may support formal governance structures, family meetings, and consolidated reporting across entities.
• Traditional wealth management firms may provide reporting related to managed assets and planning projections, depending on the engagement.

Factors Individuals Often Consider

Rather than recommendations, the following are questions individuals and families often explore when evaluating different advisory structures:

• How complex are the financial and legal arrangements involved?
• Are there multiple generations or entities requiring coordinated oversight?
• How important is centralized reporting across accounts and structures?
• What level of privacy and customization is desired?
• How many external advisors need to be coordinated?
• What fee structures align with personal preferences and transparency expectations?

Answers to these questions vary significantly by individual circumstance.

Risks and Limitations to Understand

Both family offices and traditional wealth management arrangements involve considerations and potential limitations, including:

• Cost structures that may change over time
• Dependence on third-party professionals
• Variability in service scope and expertise
• Administrative and operational complexity

No advisory structure eliminates financial, tax, or legal risks.

There is no single wealth management structure that applies universally to all individuals or families. Family offices and traditional wealth management firms are designed to address different levels of complexity, scale, and coordination needs.

Understanding the general characteristics of each model may help individuals engage in more informed discussions with qualified financial, tax, and legal professionals when evaluating how their affairs are organized.

Disclosures

• This material is for informational purposes only.
• This is not investment, tax, or legal advice.
• Individual circumstances vary, and professional guidance should be obtained before making financial decisions.