Starting or creating a family office
What Decisions Need to Be Made Before the Office Begins Operating?
Short answer. Before opening, agree on the office's purpose and scope, who it serves, who has authority, what the budget covers, and which work stays internal or goes to outside providers. Assign an accountable leader, establish controls and reporting responsibilities, and document the recurring procedures staff will follow.
Before the office begins operating, the family needs to decide what the office is for, who it serves, how decisions are made, and how routine work will be handled. These choices give staff and providers a clear mandate and help the family oversee activity without relying on assumptions.
Define the Mandate and Service Boundaries
Write down the family's purpose for creating the office, the branches or generations it will serve, and the responsibilities it will take on. Clarify which requests fall within the approved scope and how new services are considered. This helps keep personal requests, family administration, and investment work from being blended without agreement.
Decide which capabilities must be close to the family and which can be provided by external specialists. The fundamentals guide and partners and service providers guide can help frame those choices. Estimate operating costs before approving the model, including staff, professional services, systems, and administration.
Assign Authority and Oversight
Name the executive who will lead daily operations and clarify whether that person also has investment authority. Decide who supervises the executive, what decisions require family or committee approval, and how disagreements will be resolved. Set spending and investment approval limits, rules for conflicts of interest, and expectations for use of family assets. Talk with the family's attorney or CPA about legal and tax specifics.
Establish who receives reports, what information they contain, and how often they are prepared. The frequency and participants should fit the family's holdings and work. A committee should focus on the decisions that need its attention, while staff handle appropriate routine matters within approved limits.
Document Controls and Recurring Work
Before opening, create an operating binder with the office's key procedures. It should explain how invoices are reviewed and paid, how records are maintained, who reconciles financial information, how reports are prepared, and how urgent matters are escalated. Document who can initiate, approve, and review transactions. Small offices can keep controls practical by separating duties where possible and adding a second review for sensitive actions.
Identify core staff and outside providers, assign an owner for each relationship, and make sure records and access are available to the people responsible. Prepare for absences by recording essential contacts, deadlines, and steps another person can follow. The governance guide can help frame oversight, while the operational processes guide can help organize day-to-day work.
Finally, review the decisions with the family before operations begin. Confirm that the mandate, authority, budget, reporting lines, and written procedures match one another. When a staff member can explain how to handle a routine task and when to seek approval, the office has a usable starting structure. Revisit these decisions as family needs or responsibilities change.
Create an operational binder for the single family office that answers this question.
Sources: How to Start a Family Office, The Single Family Office. Informational only, not financial, legal or tax advice.