What is a Family Office and do you need one
By Steven Nathan*
As wealth grows, advisers tend to multiply. A lawyer sets up a trust, an accountant handles the tax, a broker manages some investments and a bank manages others. An offshore structure may no longer suit the family's circumstances. Every adviser may be doing a good job, but the family has changed shape since the individual pieces were put in place. A business founded by one generation is now run by the 2nd or 3rd generation, and a family of five has become a family of thirty. Who is responsible for making sure it all still works together? That is the function a family office fulfils.
Family offices are growing rapidly. Deloitte estimates that families with single-family offices held $5.5 trillion in wealth in 2024, rising to a projected $9.5 trillion by 2030. As families spread across geographies and generations, managing their affairs becomes a lot more complicated.
A fund manager runs an investment portfolio within a defined mandate. A wealth manager takes a wider view, building an investment and financial plan around what you want your money to achieve. A family office coordinates the family's entire financial world, including investments, businesses, property, debt, tax, trusts and succession. Its responsibilities often extend to things that appear on no balance sheet, such as facilitating family wealth and succession communication and preparing the next generation for stewardship. These functions and roles overlap. The key distinction is whether someone is accountable for the whole.
In my view, doing this properly requires three things:
The first is deep investment and finance expertise. Understanding how a business, an investment portfolio and a family's financial commitments fit together demands technical skill and experience.
The second is independence. Who pays the office, and does it benefit from recommending a particular product or transaction? Can it recommend simplifying arrangements, or doing nothing, even when that means earning less?
The third is judgment. Having a trusted and independent voice that can advise when something the family likes is counterproductive.
Some wealthy families build their own dedicated offices, employing people who work exclusively for them. Running a team can cost well over R10 million a year before underlying investment/execution costs. A multifamily office shares staff and infrastructure across several families, making broader expertise more accessible and more cost efficient, but its incentive structure deserves alignment scrutiny.
So, do you need a Family Office service? Scale matters, because the service must justify its cost, but complexity matters too. A South African family with a business, trusts, offshore investments and children living abroad faces different questions from someone with a stand-alone investment portfolio. If your affairs are simple and well-coordinated, a capable wealth adviser may be enough. The case for a family office grows when wealth decisions become interconnected and nobody has clear responsibility for the whole. The first step may simply be an independent review: do your financial arrangements still make sense; what are you paying for them; whose interests do they serve?
After leaving 10X Investments in 2021, I worked through these questions for my own family. Finding the combination of expertise, independence and judgment I wanted proved harder than expected. That experience, together with more than a decade at Deutsche Bank in South Africa and internationally, informed my Centric Family Office vision and philosophy.
In the weeks ahead I will explore what family offices do, how to assess them and whether their cost is justified. But you may already have a nagging sense that something needs attention. The will you never updated, the wealth manager you have been meaning to review or the structure you have never quite understood. Sometimes what is missing is an experienced, independent person, whose interests are aligned with yours to help you work through the questions you have been putting off. That is often where a family office conversation begins.
*Steven Nathan, Founder Centric Family Office