Quick Answer

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The best way to start a family office is to begin with the family's needs, not an org chart.

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Define what the family office exists to accomplish, map the family's entities and financial complexity, establish governance and decision-making authority, determine what should remain in-house versus outsourced, hire only the team actually required, and establish a technology and data foundation before fragmented processes develop.

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MyFO can serve as that foundational operating layer by bringing the family's entities, assets, liabilities, documents, stakeholders, reporting, forecasting and workflows into one environment from the beginning.

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The goal should not be to build the largest family office.

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It should be to build the simplest organization capable of managing the family's complexity well.

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Key Takeaways

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• Start with the family's objectives.
• Map entities, assets, liabilities and stakeholders before selecting technology.
• Decide whether an SFO, MFO or hybrid model is appropriate.
• Establish decision rights and governance early.
• Do not automatically hire every function internally.
• Build the technology and data architecture before spreadsheets become permanent infrastructure.
• Document processes to reduce key-person risk.
• Review the family-office model regularly as the family evolves.

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Step 1: Define Why the Family Office Exists

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Before hiring anyone, answer:

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Why are we creating a family office?

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Common goals include:

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• Consolidating wealth
• Improving financial visibility
• Coordinating investments
• Managing private markets
• Overseeing operating businesses
• Managing real estate
• Coordinating tax and estate planning
• Preparing for generational transition
• Improving governance
• Managing philanthropy
• Reducing administrative burden
• Preserving institutional knowledge

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Write the mandate down.

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Without a clear purpose, a family office can quickly become an expensive collection of employees and vendors without a coherent operating model.

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Step 2: Map the Family's Financial World

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Before selecting technology or designing reports, understand what actually needs to be managed.

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Map the Entities

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Identify:

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• Trusts
• Corporations
• Partnerships
• LLCs
• Foundations
• Holding companies
• Personal ownership

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Then identify the relationships among them.

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Map the Assets

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Include:

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• Public investments
• Private equity
• Venture capital
• Private credit
• Direct investments
• Operating businesses
• Real estate
• Cash
• Collectibles
• Lifestyle assets

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Map the Liabilities

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Include:

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• Mortgages
• Credit facilities
• Private loans
• Intercompany debt
• Guarantees
• Other obligations

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Map the Stakeholders

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Identify:

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• Family members
• Beneficiaries
• Trustees
• Directors
• Advisors
• Accountants
• Attorneys
• Investment managers

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This becomes the blueprint for the family-office infrastructure.

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Step 3: Decide Which Family-Office Model You Need

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There are three primary approaches.

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Single-Family Office

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A dedicated organization serving one family.

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Multi-Family Office

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An external organization serving multiple families.

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Hybrid Family Office

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A lean internal organization supplemented by external specialists.

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Many families do not need to begin with a large SFO.

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A hybrid structure can provide strategic control while avoiding unnecessary fixed costs.

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For a deeper comparison, see Single Family Office vs. Multi-Family Office: Which Is Right for You?

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Step 4: Establish Decision-Making Authority

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Before the office begins moving money or making investments, establish:

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• Who can approve investments?
• Who can move cash?
• What requires dual approval?
• What requires family approval?
• What belongs to the investment committee?
• What authority belongs to executives?
• Which decisions belong to trustees?
• Who can access sensitive information?

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The objective is clarity.

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Ownership, oversight and execution are different responsibilities.

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Step 5: Decide What to Keep In-House

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Do not copy another family's org chart.

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Ask whether each function truly requires a full-time employee.

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Potential family-office functions include:

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• Investments
• Finance
• Accounting
• Tax
• Legal
• Estate planning
• Reporting
• Administration
• Governance
• Philanthropy
• Cybersecurity
• Insurance
• Lifestyle management

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Many specialist functions can be outsourced efficiently.

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Step 6: Hire the Core Team

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The right team depends on complexity.

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A lean family office might initially include:

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Managing Director / CEO

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Oversees the office and coordinates advisors.

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CFO / Controller

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Oversees financial information, accounting relationships, liquidity and reporting.

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CIO / Investment Lead

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Oversees investments where internal investment management is necessary.

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Chief of Staff / Operations Lead

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Coordinates the administrative and operational needs of the family.

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Family Office Associate

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Handles reporting, data, documents and daily operations.

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Not every office needs every role.

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A sophisticated external advisor can sometimes replace an expensive full-time specialist.

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Step 7: Determine Your Accounting Requirements

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Ask whether the family office needs to maintain formal books internally.

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Some offices require:

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• Multi-entity accounting
• Consolidated financial statements
• Fund accounting
• Intercompany accounting

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Others primarily require:

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• Consolidated wealth reporting
• Reliable transaction data
• Clean tax information
• Entity-level visibility

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Those are not the same problem.

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Do not buy an enterprise accounting environment if the office does not require one.

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Step 8: Establish the Technology Foundation

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This should happen early.

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Otherwise, each employee begins creating:

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• Spreadsheets
• Shared folders
• Email workflows
• Separate databases
• Individual point solutions

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Eventually, the office must unwind all of it.

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A modern family-office technology foundation should provide visibility into:

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• Entities
• Ownership
• Assets
• Liabilities
• Documents
• Stakeholders
• Private investments
• Reporting
• Forecasting
• Tasks
• Workflows

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MyFO is designed as this operating layer.

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Step 9: Create a Single Source of Truth

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Determine which system owns:

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• Entity structure
• Asset data
• Liability data
• Documents
• Stakeholder information
• Reporting
• Forecasts

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Without clarity, multiple versions of the same information emerge.

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For example:

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The accountant has one entity list.

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The lawyer has another.

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The investment team has another.

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The principal has a spreadsheet.

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No one knows which is authoritative.

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A family office should eliminate that ambiguity.

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Step 10: Decide How Data Enters the System

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Family-office information comes from many sources.

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These can include:

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• Custodians
• Banks
• Administrators
• Accounting systems
• Private fund statements
• Capital call notices
• Distribution notices
• Property records
• Direct investments

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Different data sources may require:

• Direct feeds
• Aggregators
• APIs
• Document ingestion
• Manual review

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The objective is not simply automation.

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It is reliable data.

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Step 11: Establish Cybersecurity

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Family offices hold unusually sensitive information.

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Security should include:

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• Multi-factor authentication
• Role-based permissions
• Device security
• Data encryption
• Vendor due diligence
• Approval controls
• Audit trails
• Employee training
• Incident response
• Backup and recovery

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Family-office cybersecurity should be treated as an ongoing operating function, not a one-time technology project.

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Step 12: Create Reporting Standards

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Determine what leadership actually needs to see.

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Examples include:

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• Consolidated net worth
• Asset allocation
• Performance
• Liquidity
• Capital commitments
• Debt
• Cash-flow forecast
• Entity-level reporting
• Private investment performance
• Risk exposure

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Do not produce reports simply because they have always existed.

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Every report should help someone make a decision.

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Step 13: Build a Cash-Flow Forecast

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A family office should understand not only what the family owns, but what cash will be required.

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Forecast:

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• Capital calls
• Distributions
• Taxes
• Debt payments
• Acquisitions
• Family spending
• Philanthropy
• Operating-company cash flows

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This can prevent a wealthy family from becoming unexpectedly illiquid.

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Step 14: Document Core Workflows

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Important processes should not exist only in one employee's head.

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Document workflows for:

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• Capital calls
• Distributions
• Cash transfers
• New investments
• New entities
• New accounts
• Valuation updates
• Document approvals
• Tax coordination
• Reporting
• Vendor onboarding

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This reduces key-person risk.

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Step 15: Establish Family Office KPIs

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The family office itself should be evaluated.

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Useful measures can include:

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• Reporting cycle time
• Data completeness
• Capital-call processing time
• Number of manual reconciliations
• Forecast accuracy
• Administrative hours
• Vendor cost
• Cybersecurity incidents
• Outstanding tasks
• Governance actions completed

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See Family Office KPIs: What Should You Measure?

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Step 16: Evaluate Technology Vendors Carefully

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Do not buy software based solely on a polished demo.

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Use your own family-office structure.

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Ask the vendor to show how the platform would handle:

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• Your entities
• Your ownership structure
• Your private investments
• Your liabilities
• Your documents
• Your workflows

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Also evaluate:

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• Data ownership
• Integrations
• Security
• Implementation
• Support
• Pricing
• Scalability

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See our Family Office Technology Due-Diligence Checklist.

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Step 17: Review the Operating Model Annually

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Family offices evolve.

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Each year ask:

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• What is still manual?
• Which vendors are redundant?
• Are reporting requirements changing?
• Has entity complexity increased?
• Is the family expanding?
• Are new generations becoming involved?
• Are permissions current?
• Are cybersecurity controls adequate?
• Does the office have unnecessary infrastructure?
• Is the technology stack still appropriate?

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Common Mistakes When Starting a Family Office

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Hiring Too Fast

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More employees do not automatically create a better family office.

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Buying Enterprise Software Too Early

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Complex software can create more operational burden than it removes.

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Letting Everyone Create Their Own System

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This creates data fragmentation from the beginning.

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Ignoring Governance

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Undefined decision rights eventually create conflict.

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Ignoring Data Ownership

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The family's financial information should not become trapped inside individual advisors or vendors.

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Overbuilding

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A family office should be designed around actual complexity, not prestige.

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The Bottom Line

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The best family offices are not necessarily the largest.

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They are the ones that create clarity, control and continuity around complex family wealth.

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Build in this order:

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Purpose → Structure → Governance → Operating Model → People → Technology → Data → Controls → Reporting

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MyFO can provide the technology and data layer connecting many of those functions without requiring the family to build an unnecessarily complicated technology stack.

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Start simple.

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Build deliberately.

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Add complexity only when the family's needs actually require it.

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Frequently Asked Questions

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How do you start a family office?

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Begin by defining the family's objectives, mapping its financial complexity, selecting an operating model, establishing decision-making authority, hiring the minimum necessary team and building a reliable technology and data foundation.

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How long does it take to start a family office?

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It depends heavily on complexity. A lean hybrid structure can be established much faster than a fully staffed SFO with internal accounting and investment infrastructure.

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Do you need a CIO?

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Not necessarily. Families that outsource investment management may not need a full-time internal CIO.

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Do you need an internal accountant?

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Not always. Accounting can be outsourced if the family office has reliable financial information and appropriate oversight.

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What software does a family office need?

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At minimum, the family should have a reliable way to organize entities, assets, liabilities, documents and reporting. More complex offices may also require accounting, investment analytics, CRM and specialized systems.

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Should family offices own their data?

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Yes. Families should understand where their information lives, whether it can be exported and what happens if they change vendors.

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