Starting or creating a family office
What Compliance Responsibilities Can Arise From Employing Family Office Staff?
Short answer. Employing staff creates responsibilities around role clarity, confidentiality, conflicts, financial controls, and any rules tied to the office's investment or business activities. Family employees need the same written expectations and oversight as outside staff. Assess whether the office's complexity calls for a compliance officer or outside firm, and have counsel address legal specifics.
Employing family office staff requires clear policies, supervision, and records, whether an employee is related to the family or not. The office also needs to assess whether its activities call for dedicated compliance support.
Set Expectations for Every Employee
Define each person's role, authority, reporting line, and access to sensitive records before work begins. A family member on payroll should follow the same procedures for confidentiality, use of office property, expense approvals, and reporting concerns as any other employee. Put expectations in written policies and explain who handles a question or suspected breach.
An ethics policy can address personal use of family assets, vendor relationships, conflicts of interest, insider trading concerns, privacy, gifts, employment, and reporting issues to a compliance officer or board member. Tailor the policy to the family office's actual work, then have counsel review it. The governance guide can help establish how authority and oversight are documented.
Match Compliance Support to the Work
Assess the complexity of the family's businesses and investments, including whether the office makes alternative investments, accepts outside capital, or enters arrangements that may fall under unfamiliar rules. In my book, I note that those activities can call for a chief compliance officer or an outsourced compliance firm. Ask counsel and a compliance specialist what applies to the specific office, and whether registration, licensing, or other requirements affect how staff perform their duties.
Make a responsibility map for recurring work. Identify who approves transactions, maintains records, monitors deadlines, reviews communications, and raises issues. Small teams may assign several tasks to one person, but they still need a second review for sensitive payments or investment decisions where practical. The operations guide can help turn those responsibilities into documented procedures.
Protect the Office and Family
Use access controls and financial procedures that reduce the chance of unauthorized investments, misuse of assets, or confusion between personal and office business. Keep appropriate records of approvals, employee access, vendor engagements, and exceptions. Give staff a clear path for disclosing conflicts before they influence a decision. Periodically review the procedures when the team, services, or investments change.
Family employment can blur personal and professional expectations, so define who supervises each relative and how performance concerns are handled. Avoid informal directions that bypass the office's approval process. The conflicts documentation guide offers a framework for disclosure and review, while the asset separation guide addresses controls between family and office property. Talk with your attorney or CPA when employment, securities, or tax specifics arise.
Depending on the complexities of your businesses and investments, you may require a chief compliance officer or outsourced compliance firm to make sure that your firm is adhering to the latest regulations and requirements.
Sources: How to Start a Family Office, The Single Family Office. Informational only, not financial, legal or tax advice.