How to Start a Family Office in 2026 - Step by Step Guide
Starting a family office is a major undertaking. You're building an organization to manage your family's wealth for generations.
This guide walks you through the process step by step. From initial planning to day-one operations, here's everything you need to know.
Before You Start: Key Questions
Before launching a family office, answer these questions:
Do you have enough assets? Most single-family offices require $100 million+ to justify the cost. Below that, a multi-family office may make more sense.
What services do you need? List everything: investments, taxes, estates, philanthropy, concierge services. This defines your office's scope.
Who will be involved? Identify family members who will participate in governance and decision-making.
What's your timeline? Building a family office takes 6-18 months depending on complexity.
Step 1: Define Your Family's Goals
Start with clarity on what you want to achieve.
Gather key family members and discuss:
- Investment objectives and risk tolerance
- Tax planning priorities
- Estate and succession goals
- Philanthropic interests
- Privacy requirements
- Family governance needs
Document these goals formally. They become the foundation for everything else.
Step 2: Choose Your Structure
You have several structural options for your family office.
Single-Family Office (SFO)
A dedicated entity serving only your family. Maximum control and privacy, but highest cost.
Best for families with $100M+ in assets who want fully customized services.
Multi-Family Office (MFO)
Join an existing MFO that serves multiple families. Lower cost, shared resources, less customization.
Best for families with $10-100M who want professional management without full overhead.
Hybrid Model
Start with outsourced services and bring functions in-house over time. Good for families testing the waters.
Virtual Family Office
Use technology and specialist networks instead of full-time staff. Most cost-effective option.
Step 3: Establish Legal Structure
Work with attorneys to create the proper legal framework.
Common structures include:
- Limited Liability Company (LLC)
- Limited Partnership (LP)
- S-Corporation or C-Corporation
- Private Trust Company
Each has different tax implications, liability protection, and regulatory requirements. Your choice depends on your family's specific situation.
Consider where to domicile your family office. Some states and countries offer advantages for privacy, taxes, or trust law.
Step 4: Develop Governance Framework
Family governance prevents conflict and ensures smooth operations.
Key governance documents:
- Family constitution or charter
- Investment policy statement
- Decision-making protocols
- Conflict resolution procedures
- Family meeting schedules
- Succession plans
Establish a family council or board to oversee major decisions. Define voting rights, roles, and responsibilities clearly.
Good governance takes time to develop. Start simple and evolve as needed.
Step 5: Build Your Team
Staffing is crucial. You need the right people in the right roles.
Core Positions
Executive Director/CEO - Leads the office and coordinates all activities. The most critical hire.
Chief Investment Officer - Manages investment strategy and portfolio. Can be outsourced initially.
CFO/Controller - Handles accounting, reporting, and financial operations.
Executive Assistant - Supports leadership and manages office operations.
Hiring Considerations
- Look for candidates with family office experience
- Prioritize cultural fit and discretion
- Consider outsourcing specialized functions initially
- Plan for competitive compensation to attract talent
Salaries vary widely. Expect to pay $200K-500K+ for senior roles, depending on location and experience.
Step 6: Select Technology and Systems
Modern family offices run on technology. Choose systems for:
Investment management:
- Portfolio tracking and reporting
- Performance analytics
- Risk monitoring
Document management:
- Secure storage and sharing
- Version control
- Access permissions
Accounting and reporting:
- General ledger
- Bill pay and cash management
- Tax preparation support
Communication:
- Secure email
- Video conferencing
- Family portals
A secure data room is essential for storing and sharing sensitive family documents. Look for features like granular permissions, activity tracking, and audit trails.
Step 7: Establish Service Providers
No family office does everything alone. Build a network of trusted advisors.
Essential providers:
- Legal counsel (estate, tax, corporate)
- Tax accountants and CPAs
- Investment managers or consultants
- Insurance advisors
- Banking relationships
- IT and cybersecurity support
Vet providers carefully. Check references, review conflicts of interest, and negotiate fee arrangements.
Step 8: Create Policies and Procedures
Document how your family office operates.
Key policies:
- Investment policy statement
- Risk management guidelines
- Expense approval processes
- Information security protocols
- Vendor management procedures
- Business continuity plans
Written policies create consistency and reduce risk. They also help with staff transitions.
Step 9: Set Up Operations
With structure, team, and systems in place, launch operations.
First 90 days focus:
- Transfer assets and accounts
- Onboard staff and set up workspaces
- Implement technology systems
- Establish reporting schedules
- Begin regular family communication
Start with core functions and add complexity over time. Don't try to do everything at once.
Step 10: Plan for the Future
A family office should outlast any individual. Build for longevity.
Long-term planning includes:
- Leadership succession plans
- Next-generation education programs
- Regular governance reviews
- Strategic planning cycles
- Performance benchmarking
Review and update your family office strategy annually.
Common Mistakes to Avoid
Underestimating costs. Budget realistically. Hidden costs add up quickly.
Rushing the process. Take time to plan properly. Mistakes are expensive to fix.
Neglecting governance. Family dynamics cause most family office failures. Invest in governance early.
Over-hiring initially. Start lean. It's easier to add staff than to let people go.
Ignoring technology. Manual processes don't scale. Invest in proper systems from day one.
Skipping due diligence. Vet all service providers thoroughly. One bad actor can cause major damage.
Timeline: What to Expect
Months 1-2: Planning and goal-setting Months 3-4: Legal structure and governance framework Months 5-6: Hiring and technology selection Months 7-9: System implementation and provider setup Months 10-12: Soft launch and refinement Year 2+: Full operations and ongoing optimization
Most family offices take 12-18 months from concept to full operation.
Budget Planning
Here's a rough budget for launching a single-family office:
One-time setup costs:
- Legal and structural setup: $50K-200K
- Technology implementation: $50K-150K
- Recruiting and onboarding: $50K-100K
- Total setup: $150K-450K
Annual operating costs:
- Staff salaries and benefits: $500K-2M
- Technology and subscriptions: $50K-200K
- Office and operations: $50K-300K
- Professional services: $100K-500K
- Total annual: $700K-3M
Costs vary significantly based on scope, location, and complexity.
Conclusion
Starting a family office is a significant investment of time and money. Done well, it creates a powerful platform for managing wealth across generations.
Take the process step by step. Define your goals, build the right structure, hire carefully, and invest in proper systems. Most importantly, get governance right from the start.
The families that succeed treat their family office as a long-term institution—not just a service provider.