Build or buy: the single- versus multi-family-office decision

There are roughly 8,030 single-family offices in the world today, up from 6,130 in 2019, and Deloitte expects the count to reach 10,720 by 2030. Behind them sits an estimated US$3.1tn in investable assets, a figure projected to climb to US$5.4tn within the decade. The family office has quietly become one of the most significant pools of private capital on the planet, and yet for most families considering one, the founding question is not how to invest but whether to build the office at all.

The decision is usually framed as build or buy. Build a dedicated single-family office (SFO), a private company that exists to serve one family, or buy into a multi-family office (MFO) or an outsourced model that spreads professional infrastructure across several families. The vocabulary is tidy; the reality is not. A family office is at once an investment firm, a tax and legal function, an accounting department, a concierge, a governance forum and a school for the next generation, and each of those mandates pulls the structure in a different direction. What follows is not a pitch for either model, but an attempt to set out plainly what a family office actually does, what an SFO really costs, the asset levels at which practitioners say the economics begin to work, and the quieter problems of talent, governance and conflict that decide whether the thing survives a generation.

Strip away the mystique and a family office is a coordinating function. Its first job is investment: setting an allocation policy, selecting managers, accessing private markets and holding the whole portfolio to a coherent strategy rather than a scatter of bank relationships. Its second is the unglamorous machinery of administration, consolidated reporting, bill payment, cash management, entity bookkeeping and the production of a single, trustworthy view of a balance sheet that may span a dozen jurisdictions and several asset classes.

Around that core sit the functions families underestimate until they need them. Tax and legal structuring across borders. Estate and succession planning. Governance: the constitutions, councils and decision rights that keep a growing family from fracturing over money. Lifestyle and administrative support, from property and aircraft to philanthropy and security. And, increasingly, the education of the next generation, who will one day inherit not only the assets but the responsibility for stewarding them.

No two offices weight these tasks the same way. A first-generation entrepreneur who has just sold a company wants liquidity managed and tax sheltered. A fourth-generation family with operating businesses and forty members wants governance, reporting and the orderly transfer of control. The structure should follow the mandate, which is precisely why importing someone else's template tends to disappoint.

The headline number is sobering. Families report spending an average of US$3.2m a year to run their offices, according to J.P. Morgan, and those managing more than a billion dollars spend closer to US$6.6m. Even a deliberately lean SFO, three professionals covering investments, operations and tax, rarely runs below US$1m to US$2m once premises, technology, audit, legal and compensation are counted, and staff alone typically absorb between half and two-thirds of the budget.

Expressed as a fraction of assets, the picture sharpens. UBS puts the pure operating cost of a family office at around 0.4% of assets under management, but that average flatters the smaller office. Fixed costs do not shrink with the portfolio: a US$100m family and a US$1bn family need broadly the same audit, the same reporting platform and a comparable core team, and the smaller office simply pays a far higher percentage for it.

This is the heart of the build-or-buy calculus. The MFO does not abolish these costs; it shares them. By spreading a reporting system, a chief investment officer and a tax team across many families, it converts a heavy fixed cost into a lighter variable one, typically charged at 30 to 100 basis points of assets, sometimes with retainers layered on top. For a family below the threshold where an SFO's fixed costs can be diluted, that arithmetic is often decisive.

Ask where the line sits and you will get a range, because the honest answer depends on what the office is asked to do. A frequently cited floor is US$100m, the point at which a bare-bones SFO becomes conceivable. But many advisers argue the economics only truly work nearer US$250m, the level at which a credible operation can be run for under 1% of assets, and some place full institutional capability, in-house investment, tax and governance, closer to US$500m or even US$1bn.

The wealth backing these structures is real. UBS surveyed 317 of its family-office clients in 2025 and found an average net worth of US$2.7bn, with each office managing about US$1.1bn. That is the world in which a fully resourced SFO is uncontroversial. The harder cases sit beneath it: the US$150m family that wants control but cannot quite afford it, and for whom a hybrid is often the answer.

Cost is the visible constraint. Talent is the one that quietly decides outcomes. A single-family office is a tiny organisation competing with banks, hedge funds and private-equity firms for a narrow pool of senior people who must be at once technically excellent and personally trusted. The best of them are expensive, and the office that secures one then carries a concentrated dependency: the institutional memory, the relationships and the judgement often reside in a single head.

That is the key-person problem in its sharpest form. When a long-serving principal retires, falls ill or simply leaves, a small SFO can be hollowed out overnight, whereas an MFO mitigates this by construction: depth of bench, coverage and succession are part of what the family is buying. The trade is autonomy for resilience, and a family that has never had to replace its only investment professional tends to underweight how real that risk is.

Governance is where good intentions meet hard cases. A single-family office answers to the family, which sounds like an advantage until the family disagrees with itself. Without clear decision rights, an investment committee and a constitution, the office becomes a stage for old rivalries, and the professional staff are caught between branches of an owner who cannot speak with one voice. Deloitte found that only just over half of family offices have a documented succession plan, a striking gap given the stakes.

Conflicts of interest are the other quiet hazard, and here neither model is innocent. An SFO can drift into serving the loudest family member rather than the family as a whole. An MFO must manage the tension between many clients and its own commercial incentives, particularly where it earns from the products it recommends. The discipline that protects against both is the same: explicit governance, independent oversight and a clear, evidenced process for every material decision.

Which is why so many families never make the binary choice the framing implies. They keep the functions that demand control, privacy and proximity, capital allocation, governance, succession, family education, in-house, and they outsource the rest, from fund administration and consolidated reporting to specialist tax and legal counsel. The hybrid is not a compromise born of indecision. For most families it is the rational equilibrium: own the judgement, rent the machinery.

Build or buy is really a question about what a family is trying to protect. If the answer is control, privacy and a structure shaped entirely around one family's purpose, and the balance sheet can carry the fixed cost, the single-family office earns its keep. If the answer is access to depth, resilience and professional infrastructure without the overhead and key-person risk of building from scratch, the multi-family or outsourced model is not a lesser option; it is frequently the better one.

The families who get this wrong tend to build an SFO as a trophy and discover they have bought a payroll, or outsource everything and find no one is truly accountable for the whole picture. The families who get it right start from the mandate, stay candid about cost and talent, and treat governance as the foundation rather than an afterthought. Whatever the structure, the discipline is the same: every decision documented, defensible and made for the family as a whole, not the loudest voice in the room. That is what separates an institution that lasts a generation from an expensive habit that does not.

Sources: Deloitte, The Family Office Insights Series, Defining the Family Office Landscape (2024); UBS Global Family Office Report (2025); J.P. Morgan Global Family Office Report (2024). Figures are industry estimates and will be revised over time.