What a family office is, and who it is for

Introduction

0:04HouseholdWhat does a family office actually do?

0:07To answer that, this film looks at where family offices began, the five jobs they do, and which of those jobs any household can run. It starts with one family, in 1882. In 1882, John D. Rockefeller, the founder of Standard Oil, set up an office to look after his family’s money and affairs.

0:29It kept the accounts, looked after the investments, and handled the family’s giving. It is often called the first full-service family office in America. Today, thousands of families have an office of their own. This film is about what those offices do, and what that means for everyone else. I’m Freya, Finna’s AI chief of staff.

An office for one family

0:55The Rockefeller office grew as the fortune grew. In 1891, Rockefeller took on a Baptist minister, Frederick Gates, to help with his giving. Within a year, Gates was also running a committee for the family’s investments. He turned the giving into a plan: foundations for medicine, science and education, among them the Rockefeller Foundation, in 1913.

1:23In 1907, Henry Phipps, Andrew Carnegie’s partner in Carnegie Steel, set up an office for his own family’s fortune. He named it Bessemer Trust, after the way of making steel that had made the family rich. In 1974, the Phipps family began to let other families use it. An office for one family had become an office for several.

1:49So, 1882, 1891 and 1907: offices for one family. In 1974, one of them opened to other families. In 1979, the Rockefellers set up an office for other families too. Deloitte, the accounting firm, counted about six thousand single-family offices around the world in 2019, and about eight thousand in 2024.

2:18Together, they look after about three trillion dollars. Running one is expensive. J.P. Morgan, the bank, puts the average cost at about three point two million dollars a year. So a single-family office usually makes sense only for a family with a hundred million dollars or more.

2:40A multi-family office shares those costs between several families, but it is still mostly for the very wealthy. Three words from this chapter. A family office: a private team that runs a wealthy family’s money and affairs. A single-family office: one that works for one family only.

3:03And a multi-family office: one office that works for several families, who share its cost.

The five jobs

3:11Take away the staff, the building and the fortune. What is left is the work. Most of a family office’s work comes down to five jobs. It keeps one record of everything the family owns and owes. It invests the money, across many kinds of assets. It writes the rules: what the money is for, and how decisions are made.

3:36It protects the family: insurance, cash for bad years, the right papers. And it plans the handover to the next generation. Deloitte also looked at where family offices spend their time. About half goes on investing. The rest goes on paperwork and rules, the family’s own business, the next generation, and giving.

4:02So the money is the biggest job, but far from the only one. Three words from this chapter. A household record: one list of everything a family owns and owes, with dates. An investment policy: a family’s written rules for its money. And succession: handing on wealth, and the decisions about it, to the next generation.

Who decides

4:30An office does a great deal. But in a well-run family, it does not decide. The office gathers the facts, and checks them. The family reads them. The office lays out the choices, and what each would mean. The family chooses, often together, in a family council. The family writes the rules, and changes them when it wants to. The office follows them.

4:57Then the office carries the decision out, and reports back. And the family reviews it. Larger families often split the deciding in three. The whole family meets, perhaps once a year, to agree what matters to it. A smaller family council makes the big decisions in between. And the office prepares those decisions, carries them out, and reports back.

5:25Two words from this chapter. A family council: the family members who meet to make the big decisions together. And governance: how a family makes its decisions, and who makes which.

A household’s office

5:41So what about families without a hundred million dollars? The five jobs do not need a building. Most of them need time and attention more than money. A family office has accountants for the record. A household’s record can be a single dated page, kept up to date. An office has an investment team.

6:02A household can follow a written mix, reviewed once a year. An office has a family council. A household’s rules can fit on one page, written in calm. An office has insurance staff. A household’s protection starts with checking the cover, and keeping cash for bad months. And an office has lawyers and trustees. A household’s handover starts with a will, the names on each account, and a letter saying where everything is.

6:34Some things a household cannot copy: a team of specialists, access to investments with very high minimums, and the cost of it all. But the habits of an office are open to anyone: one record, written rules, and decisions prepared before they are made. Two words from this chapter.

6:57A review: a date each year to check the record, the mix and the rules. And the if something happens letter: a letter that tells the family where everything is.

In short

7:11So, in short. A family office is a team that runs one family’s money and affairs. The idea is at least as old as 1882. Its work comes down to five jobs: the record, investing, the rules, protection and the handover.

7:30The office prepares, and the family decides. And most of the jobs are within reach of any household. You’ll find Finna at finnafamilyoffice.com. Ready when you are.