To simplify, a multi office looks after the financial and personal affairs of multiple families just like a single family office (SFO) does. The only difference lies in the number of families being served by the office. quicken family office
There are some very wealthy families which do not seek the services of private banks or wealth managers. They prefer setting up their own investment firms or offices. In these offices, the employees could be from 3 to even 20, depending, for instance, on the number of family members or how extensive the family business is.
However, a private or single family office (SFO) is very expensive to run. Even though, there are around 1000 SFOs in Europe alone, they can cost a fortune to run. According to Greycourt, a US-based financial advisory firm to some of America’s most affluent families, you should have a fortune of at least $1 billion dollars to justify the expenses of private FO.
Even if a family is not playing in billions, the average amount that it will need to spend to run its FO will be 0.6 of assets under management, according to a survey of European offices conducted by Merrill Lynch and Campden Research.
For this reason, many families are now attracted toward the concept of multi-family offices.
This allows many families to share the cost as opposed to only one family bearing it. The services of qualified accounting and tax professionals are not sought by just one family. They can be provided for the benefit of multiple families.
If you were an SFO yesterday, you would have to compete with many firms to seek the services of good professionals. However, if today, you become part of a multi-family office, you can recruit top talent by offering them appropriate compensation.
There are other reasons too why they are opting for MFOs. If a they decides to go for an SFO, run by one of their family members, the family member will have to juggle a lot of duties. They will have to look after their personal life and also keep an eye on the financial and legal matters of the family business. The family member will also have to seek out experienced professionals to develop a good team. While the family members won’t have the expertise to do so, an MFO does. It provides families access to greater resources.