Family offices make money in two different ways. A single family office is a cost centre paid for by the family, so it earns money only through its investments. A multi family office is a business that charges its client families fees on assets and services.
Here is how each is funded, and why it changes how they behave as investors.
How single family offices are funded
A single family office is paid for by the family it serves. Its budget covers staff, systems, advisors, and office costs. It is typically funded from the family's investment returns or from the operating business.
Running costs vary widely with the size of the office and how many services it runs in-house. For what it takes to justify one, see our guide to family office minimum net worth. The office "makes money" only in the sense that its investments do.
What this means if you are pitching one: the office's staff do not earn a fee from your deal. The decision is about whether your opportunity fits the family's goals. The person deciding is often a family member or a long-tenured CIO with real discretion.
How multi family offices charge fees
A multi family office serves several families and charges them. Common models:
- An asset-based fee, often tiered and declining with size.
- Fixed retainers for family services such as accounting, bill pay, trust administration, and governance.
- Project or hourly fees for specific work.
- In some firms, performance fees on certain strategies, or revenue from in-house funds.
What this means if you are pitching one: the MFO is an advisor as well as an investor. It may allocate client capital to you, recommend you to its families, or decline because your deal does not fit its investment policy. Expect a more institutional process and a documented investment committee. Our guide to family office vs RIA explains how advisory firms and family offices compare.
How embedded family offices and family investment firms make money
Some offices sit inside the operating business or invest alongside outside capital. Their economics are mixed: the operating company may carry the costs, and the investment arm may earn management fees or carried interest on third-party money.
These offices often behave like small private equity or venture firms. Our real family office examples post names real offices of each type.
Why fees shape the pitch
- An SFO can move fast and take unusual structures because there is no fee to justify.
- An MFO needs the deal to fit a policy and to survive a committee.
- A family investment firm managing outside capital will judge you like a fund would.
Knowing which you are talking to is half the preparation. Our database tags office type for every entry. Our guides on family office structure, single family office vs multi family office, and how to pitch a family office go deeper.
FAQ
How do family offices get paid?
It depends on the type. A single family office is paid for by the family it serves, typically from investment returns or the operating business. A multi family office charges its client families, usually through asset-based fees, retainers for family services, project or hourly fees, and in some firms performance fees or revenue from in-house funds.
What fees do multi family offices charge?
Common models are an asset-based fee, often tiered and declining with size, and fixed retainers for family services such as accounting, bill pay, trust administration, and governance. Some charge project or hourly fees for specific work. A few earn performance fees on certain strategies or revenue from in-house funds.
Do single family offices charge fees?
A single family office serves one family, and that family pays its costs. The budget covers staff, systems, advisors, and office costs, funded from investment returns or the operating business. The office "makes money" only through its investments, so its staff earn no fee from a deal you bring.
Why does it matter for a pitch how a family office makes money?
It changes how the office decides: an SFO can move fast and take unusual structures because there is no fee to justify. An MFO needs your deal to fit a policy and pass a committee. A family investment firm managing outside capital will judge you the way a fund would.
The bottom line for a capital raiser
If you want family offices in your market, each verified as active (it runs a live website), with their type, investment domains, and decision-makers, the Full USA Database and Full Worldwide Database are built for that. The free sample shows the format.