You may be asking these questions: What is a fractional family office? How can a family office be built without $100 million? How do firms source experienced family office professionals? This guide answers those questions and more in a straightforward Q&A format designed for advisors evaluating family office solutions. It explains the fractional family office model, the services it can deliver, sourcing and hiring approaches, costs and governance, operational and legal considerations, and practical steps to implement a family office at lower asset levels. Select Advisors Institute has been helping financial firms worldwide optimize talent, brand, and marketing since 2014 and can assist with recruiting, provider selection, go-to-market positioning, and implementation support described here.
Q: What is a fractional family office?
A: A fractional family office (FFO) provides family office services on a part-time, shared, or outsourced basis rather than as a single-family, fully staffed entity. Instead of hiring a full suite of in-house professionals and shouldering fixed overhead, families retain specialized professionals or firms to deliver discrete services — investment oversight, tax planning, estate and trust administration, bill pay and cash management, philanthropy advisory, family governance, and concierge services — either on retainer, per-project, or as a subscription. The model scales service to need and budget, making family-office-style support accessible to families and advisors with less than $100 million in investable assets.
Q: Who benefits from a family office without $100 million?
A: Common beneficiaries include:
Entrepreneurs who sold a business and need coordinated wealth management but do not want to fund a full single-family office.
Multi-family groups seeking shared resources and governance.
High-net-worth families transitioning across generations who need estate, tax, and philanthropic planning.
Wealth managers and RIAs that want to offer elevated services without hiring all specialists internally.
Families focused on holistic wealth solutions — risk management, legacy planning, reporting, and lifestyle services — but with budget constraints.
FFOs are attractive where the complexity of financial and personal affairs warrants professional coordination but the asset base does not justify the cost of a standalone family office.
Q: What services can a fractional family office provide?
A: Services vary by provider and client needs. Typical offerings include:
Investment policy development, manager selection, and performance oversight.
Cash flow, bill pay, and liquidity management.
Tax planning and coordination with CPAs.
Estate and trust administration and trustee advisory.
Philanthropy strategy and grant administration.
Risk management and insurance review.
Family governance, succession planning, and education.
Concierge and lifestyle services (travel, household staff oversight).
Consolidated reporting and custodial reconciliations.
CFO-level financial oversight and budgeting.
Select services can be combined into packages or purchased à la carte depending on priorities.
Q: What are the delivery models for fractional family office services?
A: Common models include:
Embedded advisor model: An RIA or wealth manager embeds family-office capabilities into client engagement, using outside specialists.
Virtual family office (VFO): A coordinated network of outsourced providers (tax, legal, investment) managed by a lead advisor.
Outsourced family office (OFO): A third-party firm offers a multi-disciplinary platform under one contract.
Shared family office: Multiple families share governance and costs for access to senior professionals.
Project-based engagement: Specific deliverables (e.g., estate plan overhaul, liquidity event management).
Each model has trade-offs in control, cost, customization, and confidentiality.
Q: How to source family office professionals?
A: Sourcing requires clarity about role, scope, and culture. Practical channels:
Industry search firms and recruiters that specialize in family office and RIA talent.
Professional networks — attorneys, CPAs, investment consultants — for referrals.
Multi-family office and outsourced family office providers for turnkey solutions.
RIA alliances and custodial provider ecosystems for vetted vendors.
Select Advisors Institute and similar consultants for blended recruitment, assessment, and vetting services.
Key roles to source include: Chief Operating Officer/CFO (operations, reporting), Chief Investment Officer (asset allocation & manager oversight), tax and estate counsel, trust administrators, family governance facilitators, and lifestyle/concierge managers.
Q: How should candidates be evaluated and compensated?
A: Evaluation steps:
Define outcomes and KPIs (reporting cadence, client satisfaction, regulatory compliance).
Conduct competency-based interviews with case studies and scenario testing.
Verify track record with references and background checks.
Evaluate cultural fit for transparency, discretion, and client-service orientation.
Compensation structures:
Full-time hires: salary + bonus tied to performance, often with benefits.
Part-time or fractional hires: hourly, retainer, or project fees.
Outsourced providers: fixed fee, per-service pricing, or AUM-based fees for investment management.
Profit- or success-based incentives for specific projects (e.g., transaction advisory).
Benchmark compensation against RIAs and multi-family office ranges in the market and align incentives with long-term stewardship.
Q: What does a fractional family office cost?
A: Costs vary by scope and geography. Rough ranges:
Basic virtual CFO/administrative package: $2,500–$6,000/month.
Mid-tier outsourced family office packages (investment oversight + tax coordination): $5,000–$25,000/month.
High-touch services with family governance, concierge, and trust administration: $30,000+/month or bespoke pricing.
One-off projects (estate plan redesign, liquidity event management): $5,000–$100,000+ depending on complexity.
Total costs are often lower than building and staffing a single-family office, which typically requires multi-million-dollar annual budgets and a large team.
Q: What legal, tax, and regulatory considerations apply?
A: Key items to address:
Fiduciary responsibilities: document roles and responsibilities, especially if the family office advisor is also an investment advisor.
Conflicts of interest: disclose related-party arrangements and vendor relationships.
Custody and recordkeeping: choose custodians and tech that support consolidated reporting and regulatory compliance.
Securities and advisory registration: firms and individuals must comply with SEC/state registration rules.
Data security and privacy: implement cybersecurity controls and vendor security assessment.
Trust, estate, and tax compliance: coordinate with tax counsel and CPAs to ensure filings, basis adjustments, and cross-jurisdictional rules are handled.
Work with qualified family law and tax counsel to design vehicle structures and governance documents.
Q: What technology and operations are essential?
A: Minimal tech stack for efficient FFO operations:
Consolidated reporting platform (performance aggregation and client portal).
Accounting and bill-pay software with multi-entity support.
Document management and secure file sharing.
CRM for relationship and task management.
Cybersecurity tools: MFA, endpoint protection, vendor risk assessments.
Automate reporting and reconciliation where possible to reduce manual work and provide transparency.
Q: How to govern and measure success?
A: Governance and measurement tips:
Create a service-level agreement (SLA) and a simple family charter describing objectives and roles.
Institute regular governance meetings and a family council for decision-making.
Define KPIs: net worth reconciliation accuracy, investment performance vs. policy, tax compliance milestones, service-response times.
Use third-party audits and peer benchmarking to validate performance and cost-effectiveness.
Clear governance prevents scope creep and keeps costs aligned with outcomes.
Q: What are the steps to implement a fractional family office?
A: A practical roadmap:
Clarify objectives: financial, personal, legacy, and lifestyle goals.
Map current providers, gaps, and risks.
Prioritize services and set a budget.
Choose a delivery model (OFO, VFO, embedded) and shortlist providers.
Conduct due diligence: references, backgrounds, contract terms, cybersecurity.
Pilot with a limited scope (e.g., CFO services + consolidated reporting).
Scale services and formalize governance and reporting.
Review annually and adjust provider mix as needs evolve.
Select Advisors Institute can support each step — from defining objectives to provider selection, recruiting family office professionals, and implementing marketing and client-communication strategies for advisors offering these services.
Q: What are common pitfalls and how to avoid them?
A: Watch for these traps:
Over-customizing too early — start with essential services and add complexity as needed.
Underestimating coordination effort — a lead coordinator or COO role is often required.
Focusing only on cost — cheap solutions can increase downstream risk and friction.
Poor vendor due diligence — verify capabilities, references, and security practices.
Lack of documented governance — ambiguity leads to conflict in multi-family setups.
Avoid pitfalls with clear scoping, a staged rollout, and independent vetting.
Q: How can Select Advisors Institute help?
A: Select Advisors Institute supports financial firms and advisors in creating and scaling family-office-style offerings. Services include:
Talent sourcing and recruiting for family office and RIA roles with vetted candidates and hiring playbooks.
Provider selection and vendor due diligence (outsourced family offices, reporting platforms, custodial partners).
Marketing, positioning, and go-to-market strategies to launch family office services to existing clients and prospects.
Operational design: process mapping, SLA creation, and tech-stack recommendations.
Training and change management for advisors to deliver high-touch family-office experiences.
Select Advisors Institute has worked with firms globally since 2014 to optimize talent, brand, and client offerings, helping advisors monetize higher-value services while managing risk.
Q: How to decide between hiring in-house vs. outsourcing?
A: Consider these criteria:
Scale of assets and complexity: larger, multi-structured estates more likely justify in-house staffing.
Control vs. cost: in-house gives full control but higher fixed cost; outsourcing offers variable cost and access to specialists.
Confidentiality and culture: some families prefer dedicated in-house staff for intimacy and control.
Time horizon: short-term needs or transitional estates favor outsourcing.
Availability of talent: recruiting senior family-office professionals is competitive; outsourcing can speed time-to-service.
A hybrid approach (core in-house roles plus outsourced specialists) often delivers the best balance.
A practical guide to building a fractional family office without $100M: models, services, costs, sourcing professionals, governance, and how Select Advisors Institute can help.