Should I Start a Family Office or Keep Using My Private Bank?
Short answer. You may be able to keep your private bank and add a family office function to coordinate the family's wider needs. Consider an office when assets, businesses, advisers, and family responsibilities call for more attention than a bank relationship can provide. Weigh dedicated coordination against the cost of added staff or outsourced support.
You can keep a private bank and add a family office function to coordinate the family's wider financial and operational needs. Consider whether the current arrangement gives the family enough time and oversight across its full balance sheet. Clear communication between providers also matters.
Identify Gaps in the Current Arrangement
A private bank may manage investments and provide services. A family with operating businesses, real estate, several advisers, and family responsibilities may need more coordination. When the CPA, insurance professional, lawyer, and wealth adviser speak only occasionally, the family may have to connect the information itself. That takes time and can mean details are missed.
In my experience, families often consider an office when their advisers do not work together around the family's interests. A dedicated office or a lean outsourced model can organize that work without replacing every provider. See what a single family office does and how a virtual family office can be structured.
Match the Structure to the Work
List what the family needs managed: investment oversight, business interests, real estate, reporting, administration, or communication among providers. Decide which tasks need a family employee and which outside specialists can handle. Some families keep a narrow investment area in-house and outsource other work. Others use their private bank for portfolio services, then add staff or providers to coordinate the wider picture.
The right structure depends on the family's needs and the cost. A single family office provides dedicated attention to one family. A multi-family office serves several families, while a virtual approach can keep the internal team small. Compare these options using the single versus multi-family office break-even calculator.
Set Out the Scope in Writing
Before adding a team, write down the responsibilities the office would take on, who would lead them, and how the family would assess whether the arrangement is useful. Include the time the family spends managing provider relationships and tracking decisions. An upcoming liquidity event, sale, inheritance, or business transition may add demands. Talk with your attorney or CPA when legal or tax specifics matter.
A measured approach can start with a small scope and expand as the family learns what it needs. The family office readiness score can help structure the initial review. The first steps for setup can help turn the decision into a plan. Keep the private bank relationship where it serves the family well, and add coordination where needed.
Creating a family office doesn't necessarily mean completely leaving your wealth management advisor or private bank, it simply means supplementing that relationship with more holistic staff that is dedicated to serving only you.
Sources: Centimillionaire Strategies, How to Start a Family Office, The Single Family Office. Informational only, not financial, legal or tax advice.