What is a multi-family office?

A multi-family office (MFO) is a firm that coordinates the advice and delivery of professional and business services to financially successful families. Those services involve many different disciplines including legal, tax, finance, management, risk management and administration.

A family office differs from financial planners, investment managers, stockbrokers, insurance agents and bankers in the services it provides and its role as a trusted family advisor. The family office sells no product to its clients except that of the service as a family office, and it collects no fee from any person or organization except the clients of the family office. The family office is not paid a broker’s fee for insurance placement, securities purchase, real estate purchase, custody, commissions or transactions fees, unlike the fees paid to brokerage houses, investment management firms, investment banking firms, private banks, and product-compensated financial planners.

The real difference between a family office and many of the organizations that provide product to the family office industry is that the family office has a “serve” culture and the others have a “sell” culture. In the “sell” culture, the client does not pay a fee for the service; the client pays a fee for the product. One of the most important values of a family office is the objective advice that it provides to its clients in all areas needed by the family. This is not to say that the “sell” companies are not important and very necessary to the family and the family office. It is just to point out that the family office cannot have a “sell” culture and be compensated by product sales if it is to provide the objective advice that the family is retaining it to supply. Excerpt taken from Patricia M. Soldano, When to Use – and How to Choose – a Family Office, Estate Planning December 2008.