The family office: governance, the investment policy, next-generation programmes, and the office's own succession

• There are about 8,000 single-family offices worldwide, managing about US$3 trillion, and Deloitte expects more than 10,000 by 2030; a single-family office usually makes sense above about US$100 million of investable assets, and multi-family offices serve families from a tenth of that.

• Singapore had more than 2,000 single-family offices under its 13O and 13U incentive schemes by the end of 2024, up from about 400 in 2020.

• Campden Wealth's surveys find that fewer than half of family offices have a written succession plan for the office itself, and that most offices are restructured, merged or closed within a few years of the founding principal's death or retirement.

It runs the family's affairs as an institution: investments, tax, legal, reporting, philanthropy, property, staff, and increasingly the family's own governance. The office exists because above a certain size the family's advisers stop coordinating themselves and one person, usually the principal, becomes the coordinator. The office is that person's job, made into an organisation that can outlast them.

A single-family office serves one family and costs what a small firm costs: a chief executive, a chief investment officer, accountants, a family-services lead, and a running cost of US$1 million to US$3 million a year at the smaller end, roughly one percent of assets. A multi-family office shares the cost across families and starts far lower, at ten to twenty million of investable assets, at the price of less control and a fee of 0.5% to 1%. A virtual office is an outsourced version, a lead adviser coordinating specialists, and is where most families under US$100 million should start. The test is not the number; it is how many decisions a week land on the principal and how many of them are the same decision the office next door already made.

Three bodies, kept apart. The family council governs the family: membership, values, education, philanthropy, conflict. The board governs the business or the office. The office runs the money under an investment policy statement the council has approved. The family constitution is the document that says which body decides what, and how the constitution itself changes. Families without it run everything through the principal, which works exactly as long as the principal does. Writing a family constitution has the ten clauses.

Objectives, time horizon, risk, allocation, constraints, decision rights, and how performance is judged: the family's investment judgement written down so it survives a change of adviser or principal. The typical family office allocation in the UBS Global Family Office Report is roughly a quarter to a third in listed equities, a fifth in private equity and venture, a tenth to a fifth in real estate, the rest in fixed income, hedge funds and cash; the number that matters more is the liquidity rule, how much must be available within a year, because it is the rule the next principal will test first. The statement is the one document in most offices that is actually about judgement, and it is about the money's judgement only.

Staff, systems, custody, audit, and the advisers the office coordinates rather than replaces. A well-run office earns its cost three ways: tax and structure decisions made once rather than by each adviser separately; investment access and fee negotiation at scale; and the family's time, which is the resource the principal is actually short of. An office that only does the third is a concierge; an office that only does the first two is an asset manager; the ones that last do all three and add the fourth, which is governance.

Education programmes, apprenticeships in the office, the junior board, a foundation budget, and rotation through the family council. What works is real responsibility with real consequences, early: a portfolio sleeve with a budget and a report to the council, a property to manage, a grant committee to chair. What does not work is the annual retreat with a speaker and a slide about values.

Every office has a succession plan for the family's assets and almost none has one for itself. The chief executive was hired by the principal and reports to the principal; the chief investment officer runs the portfolio the principal set; the staff know the principal's preferences and nobody wrote them down. When the principal goes, the second generation inherits an institution built around a person who is no longer there, and the surveys show what happens next: the office is restructured, merged into a multi-family office, or closed, often within three years. The plans that survive name the next principal early, give them the office to run while the founder can still be asked, put the chief executive's reporting line to the board rather than the person, and separate the office's governance from the founder's presence.

An office is a memory: it knows every holding, every structure, every decision's paperwork. It does not know how the principal decided, what she would never do, or what she would say to the grandson who wants to sell the company. That judgement is what the family will ask the office for on the Monday after, and the office will have the files. It can be recorded, in the principal's own words, while she is here, and handed to the office intact under the Executor Lock™ when the time she chooses arrives.

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